The Supreme Court’s ruling in Matsushita Electric Industrial Co. v. Zenith Radio Corp. marked the end of judicial hostility to Rule 56 motions and effectively legitimized the use of summary judgment in antitrust cases. The 5-4 decision dramatically altered the antitrust litigation landscape both procedurally and substantively. Procedurally, the decision underscored the transsubstantive nature of summary judgment, making clear that summary judgment is as appropriate in complex antitrust cases as in any other area of the law. Matsushita also made clear that the legal standards for summary judgment mirror the legal standards for directed verdict at trial. 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.” That is, the non-movant must adduce sufficient evidence about which reasonable peo ple could disagree; absent such a showing, “there is no ‘genuine issue for trial.’”
Perhaps even more important were the Court’s rulings on substantive antitrust issues. Matsushita limits the range of permissible inferences that can be drawn from ambiguous evidence of an antitrust conspiracy. 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. If the factual context makes the claim implausible, the non-movant must come forward with especially persuasive evidence to avoid summary dismissal. 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. The enhanced 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.
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 dispositive rulings to a point earlier in the litigation time line. 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 certification, and decisions on motions to dismiss.
As a result, fewer and fewer antitrust cases ever come to trial. These developments 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 process comports with an overall goal of the Federal Rules of Civil Procedure that meritorious litigants have their day in court.
This article will analyze the benefits and burdens of summary judgment in the post-Matsushita era and discuss how Rule 56 can be implemented consistent 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 reduction 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 motion 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. Eliminating 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.
The summary judgment procedure embodied in Rule 56 of the Federal Rules is a tool for the courts to filter out those cases where trial is unnecessary, i.e., to identify cases where there is no genuine issue of material fact so that one party is entitled to judgment as a matter of law without a trial. Summary judgment pierces the pleadings to ascertain whether there is evidentiary support for the parties’ allegations sufficient to justify a trial. Unlike a motion to dismiss where only the complaint is properly before the court, the judge in ruling on a summary judgment motion may consider all the pleadings plus materials developed in the course of discovery, including depositions, interrogatory answers, admissions, physical and documentary evidence, and affidavits. Whereas the motion to dismiss focuses on the burden of pleading, the summary judgment motion turns on the burden of production.
Summary judgment is thus “put up or shut up” time for the parties. They must come forward with evidence supporting their claims and defenses or face adverse judgment. Rule 56 is party-neutral—either plaintiff or defendant may seek summary judgment. Nevertheless, summary judgment is quintessentially a defendant’s weapon. Plaintiffs generally do not seek summary judgment, especially in antitrust cases where summary adjudication in the plaintiff’s favor rarely occurs. As a rule, plaintiffs simply want the opportunity to present their case to a jury and are not looking for summary adjudication. Defendants, on the other hand, use summary judgment to avoid trial altogether. Both plaintiffs and defendants also use summary judgment motions to posture for settlement.
The summary judgment procedure has been part of the Federal Rules from day one of their adoption in 1938. Nevertheless, courts in the early days of the Federal Rules were hesitant to grant summary judgment. This reluctance may have been due in part to concern among some judges that summary disposition under Rule 56 would thwart the fundamental goal of the Federal Rules that litigants with meritorious claims should have their day in court. Additionally, some courts were concerned that summary judgment was not an appropriate tool for disposing of complex cases, including antitrust cases.
The root of this concern can be traced to the Supreme Court’s ruling in Poller v. Columbia Broadcasting System, Inc. There, the Court stated that “[s]ummary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot.” Precisely what the Court meant to convey by this language is unclear. Did the Court mean that antitrust cases are inherently complex, inevitably involve issues of motive and intent, and proof is ordinarily in the hands of the wrongdoers? Or, did the Court say something much narrower, i.e., that in those antitrust cases that are in fact complex and involve issues of motive and intent with proof in the hands of the conspirators, the courts must be cautious in granting summary judgment? The former construction would strongly discourage summary disposition in all antitrust cases. The latter, while suggesting caution, would give antitrust courts much more leeway to grant summary judgment.
Many trial courts adopted the former construction and routinely denied summary judgment in antitrust cases. That approach was consistent with rulings outside the antitrust sphere that denied summary judgment where there was the “slightest doubt” as to whether a jury question existed. This narrow view of summary judgment persisted in the lower courts, even though the Supreme Court unequivocally rejected it six years after the Poller ruling in Cities Service, where the Court upheld summary judgment dismissing plaintiff’s group boycott claim. Apart from the ambiguities in Poller, Rule 56 itself is not a model of clarity. Nowhere does the rule define “genuine issue” or “material fact”; nor does the rule itself assign the respective burdens on the parties in the summary judgment context.
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The author is 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.
