Matsushita at Thirty: Has the Pendulum Swung Too Far in Favor of Summary Judgment?

• Author: Edward D. Cavanagh
• Position: Professor of Law, St. John's University School of Law
• Pages: 81-122

MATSUSHITA AT THIRTY: HAS THE PENDULUM

SWUNG TOO FAR IN FAVOR OF

SUMMARY JUDGMENT?

E

DWARD

D. C

AVANAGH

*

The Supreme Court’s ruling in Matsushita Electric Industrial Co. v. Zenith

Radio Corp.

1

marked the end of judicial hostility to Rule 56 motions and

effectively legitimized the use of summary judgment in antitrust cases.

2

The

5-4 decision dramatically altered the antitrust litigation landscape both proce-

durally and substantively. Procedurally, the decision underscored the trans-

substantive nature of summary judgment, making clear that summary judg-

ment is as appropriate in complex antitrust cases as in any other area of the

law.

3

Matsushita also made clear that the legal standards for summary judg-

ment mirror the legal standards for directed verdict at trial.

4

In addition, the

decision instructs that, to create a “genuine issue for trial” under Rule 56, the

non-moving party must do more than create “metaphysical doubt.”

5

That is,

the non-movant must adduce sufficient evidence about which reasonable peo-

* Professor of Law, St. John’s University School of Law. I am grateful for the research

assistance of Ashlee Aguiar, St. John’s University School of Law, Class of 2016, and the very

helpful comments on earlier drafts by Professor Andy Gavil, Lee Greenfield, and the participants

in the Competition Law and Policy Seminar Series at the U.S. Department of Justice Antitrust

Division.

1

475 U.S. 574 (1986).

2

Stephen J. Calkins, Summary Judgment, Motions to Dismiss and Other Examples of Equili-

brating Tendencies in the Antitrust System, 74 G

EO

. L.J. 1065, 1119 (1986); William Kolasky,

Antitrust Litigation: What’s Changed in Twenty-Five Years, A

NTITRUST

, Fall 2012, at 9, 11

(Matsushita “marked a watershed in the history of antitrust litigation.”).

3

Calkins, supra note 2, at 1122–23; see Edward J. Brunet, Antitrust Summary Judgment and

the Quick Look Approach, 62 SMU L. R

EV

. 493, 509 (2009) (Matsushita “completely ignored its

earlier Poller decision” and thereby “exorcized the homily that antitrust conspiracy claims were

questionable candidates from summary judgment.”); see also F

ED

. J

UDICIAL

C

ENTER

, M

ANUAL

FOR

C

OMPLEX

L

ITIGATION

§ 11.34, at 47 (4th ed. 2004) (Summary judgment is “as appropriate in

complex litigation as in routine litigation.”).

4

Matsushita, 475 U.S. at 588.

5

Id. at 586.

81

82 Antitrust Law Journal No. 1 (2018). Copyright 2018 American Bar Association. Reproduced

by permission. All rights reserved. This information or any por tion thereof may not be copied

or disseminated in any form or by any means or downloaded or stored in an electronic

database or retrieval system without the express written consent of the American Bar

Association.

82

A

NTITRUST

L

AW

J

OURNAL

[Vol. 82

ple could disagree; absent such a showing, “there is no ‘genuine issue for

trial.’”

6

Perhaps even more important were the Court’s rulings on substantive anti-

trust issues. Matsushita limits the range of permissible inferences that can be

drawn from ambiguous evidence of an antitrust conspiracy.

7

Evidence that is

as consistent with independent activity as with antitrust conspiracy fails as a

matter of law to create a genuine issue for trial.

8

If the factual context makes

the claim implausible, the non-movant must come forward with especially

persuasive evidence to avoid summary dismissal.

9

The Court concluded that

defendants had no rational motive to agree to sustain sales losses for over 20

years with no end in sight in order to drive Zenith from the field.

10

The en-

hanced factual showing necessary to defeat summary judgment where the

claim is implausible suggests that the Court has strong reservations about the

viability of predatory pricing claims under the antitrust laws.

11

Not surprisingly, Matsushita rekindled interest in summary judgment

among lower courts and emboldened courts to grant summary judgment in

antitrust cases where they had once hesitated to do so, thereby advancing dis-

positive rulings to a point earlier in the litigation time line.

12

Matsushita was

also transformative in another significant respect: it encouraged courts to find

mechanisms to advance antitrust dispositions to points even earlier in the lives

of cases through pretrial evidentiary rulings, determinations on class certifica-

tion, and decisions on motions to dismiss.

13

As a result, fewer and fewer antitrust cases ever come to trial. These devel-

opments have given rise to criticism among judges, scholars, and lawyers,

who question both the (largely assumed) efficiencies of summary disposition

as well as the fairness of the process in antitrust cases and whether that pro-

6

Id. at 586–87.

7

Id. at 588.

8

Id.

9

Id. at 592–93.

10

Id.

11

See E

DWARD

J. B

RUNET

, J

OHN

T. P

ARRY

& M

ARTIN

H. R

EDISH

, S

UMMARY

J

UDGMENT

:

F

EDERAL

L

AW AND

P

RACTICE

§ 9.6 (2016).

12

See Stephen J. Calkins, Supreme Court Antitrust 1991–92: The Revenge of the Amici, 61

A

NTITRUST

L.J. 269, 298 (1993) (“Matsushita emboldened courts to address the merits at early

stages.”).

13

See infra notes 192–195 and accompanying text.

2018]

M

ATSUSHITA

AT

T

HIRTY AND

S

UMMARY

J

UDGMENT

83

cess comports with an overall goal of the Federal Rules of Civil Procedure

14

that meritorious litigants have their day in court.

15

This article will analyze the benefits and burdens of summary judgment in

the post-Matsushita era and discuss how Rule 56 can be implemented consis-

tent with the policies underlying the Federal Rules to ensure litigants receive

both the perception of fairness and fairness in fact. Matsushita was clearly a

step forward to the extent that it held that Rule 56 applies across the board to

all substantive claims. But the case for especially aggressive use of summary

disposition in antitrust cases is flawed. The argument for such an approach is

that it (1) reduces costs; (2) eliminates coerced settlements; and (3) minimizes

the problem of false positives. The reality is much different. First, summary

judgment, where granted, may indeed reduce costs by eliminating the trial.

However, the cost of the motion itself plus the cost of discovery in support of

the motion adds significantly to litigation expenses. Moreover, the cost of

litigation alone tells us little; all litigation entails some cost. The appropriate

metric is cost of litigation relative to the stakes involved. Therefore, cost re-

duction itself is not necessarily a virtue if it comes at too high a price to the

truth seeking process.

Second, summary disposition may eliminate coerced settlements. However,

defendants’ ability to avoid all liability through a motion to dismiss or a mo-

tion for summary judgment drastically alters the dynamics of settlement and

provides strong disincentives for defendants to conduct any settlement talks

until those motions have played out. Of course, defendants are aware that

summary judgment motions are not risk-free. Settlement values increase

where their dispositive pretrial motions are unsuccessful, but the chance to

escape from a case unscathed may make them reluctant to broach settlement

prior to seeking summary adjudication. Third, summary dispositions may

minimize false positives, but they may also give rise to false negatives. Elimi-

nating one problem by creating another is hardly sound policy. In short, the

skeptics have a point: the pendulum may well have swung too far in favor of

summary disposition in antitrust cases.

14

See John Bronsteen, Against Summary Judgment, 75 G

EO

. W

ASH

. L. R

EV

. 522 (2007);

Morton Denlow, Summary Judgment: Boon or Burden?, T

HE

J

UDGES

’ J

OURNAL

, Summer 1998,

at 26; Samuel Isaacharoff & George Lowenstein, Second Thoughts About Summary Judgment,

100 Y

ALE

L.J. 73 (1990); Arthur R. Miller, The Pretrial Rush to Judgment: Are the “Litigation

Explosion,” “Liability Crisis,” and Efficiency Clich´es Eroding Our Day in Court and Jury Trial

Commitments?, 78 N.Y.U. L. R

EV

. 982 (2003); Paul W. Mollica, Federal Summary Judgment at

High Tide, 84 M

ARQ

. L. R

EV

. 141 (2001); Patricia M. Wald, Summary Judgment at Sixty, 76

T

EX

. L. R

EV

. 1897 (1998); Diane P. Wood, Summary Judgment and the Law of Unintended

Consequences, 36 O

KLA

. C

ITY

U. L. R

EV

. 231 (2011);

15

F

ED

. R. C

IV

. P. 1.