Matsushita Electrical Industrial Co., Ltd. v. Zenith Radio Corp.

U.S. Supreme Court Matsushita v. Zenith Radio Corp., 475
U.S. 574 (1986) Matsushita Electric Industrial Co., Ltd. v. Zenith Radio
Corp. No. 83-2004 Argued November 12, 1985 Decided March 26, 1986 475
U.S. 574 CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT Syllabus Petitioners are 21 Japanese corporations or Japanese-controlled
American corporations that manufacture and/or sell "consumer
electronic products" (CEPs) (primarily television sets).
Respondents are American corporations that manufacture and sell
television sets. In 1974, respondents brought an action in Federal
District Court, alleging that petitioners, over a 20-year period,
had illegally conspired to drive American firms from the American
CEP market by engaging in a scheme to fix and maintain artificially
high prices for television sets sold by petitioners in Japan and,
at the same time, to fix and maintain low prices for the sets
exported to and sold in the United States. Respondents claim that
various portions of this scheme violated, inter alia, §§ 1
and 2 of the Sherman Act, § 2(a) of the Robinson-Patman Act, and §
73 of the Wilson Tariff Act. After several years of discovery,
petitioners moved for summary judgment on all claims. The District
Court then directed the parties to file statements listing all the
documentary evidence that would be offered if the case went to
trial. After the statements were filed, the court found the bulk of
the evidence on which respondents relied was inadmissible, that the
admissible evidence did not raise a genuine issue of material fact
as to the existence of the alleged conspiracy, and that any
inference of conspiracy was unreasonable. Summary judgment
therefore was granted in petitioners' favor. The Court of Appeals
reversed. After determining that much of the evidence excluded by
the District Court was admissible, the Court of Appeals held that
the District Court erred in granting a summary judgment, and that
there was both direct and circumstantial evidence of a conspiracy.
Based on inferences drawn from the evidence, the Court of Appeals
concluded that a reasonable factfinder could find a conspiracy to
depress prices in the American market in order to drive out
American competitors, which conspiracy was funded by excess profits
obtained in the Japanese market. Held. The Court of Appeals did not apply proper
standards in evaluating the District Court's decision to grant
petitioners' motion for summary judgment. Pp. 475 U. S.
582 -598.

															(a) The "direct evidence" on which the Court of Appeals relied
-- petitioners' alleged supracompetitive pricing in Japan, the
"five-company Page 475 U. S. 575 rule" by which each Japanese producer was permitted to sell only
to five American distributors, and the "check-prices" (minimum
prices fixed by agreement with the Japanese Government for CEPs
exported to the United States) insofar as they established minimum
prices in the United States -- cannot, by itself, give respondents
a cognizable claim against petitioners for antitrust damages. Pp. 475 U. S.
582 -583.

															(b) To survive petitioners' motion for a summary judgment,
respondents must establish that there is a genuine issue of
material fact as to whether petitioners entered into an illegal
conspiracy that caused respondents to suffer a cognizable injury.
If the factual context renders respondents' claims implausible, i.e., claims that make no economic sense, respondents must
offer more persuasive evidence to support their claims than would
otherwise be necessary. To survive a motion for a summary judgment,
a plaintiff seeking damages for a violation of § 1 of the Sherman
Act must present evidence "that tends to exclude the possibility"
that the alleged conspirators acted independently. Thus,
respondents here must show that the inference of a conspiracy is
reasonable in light of the competing inferences of independent
action or collusive action that could not have harmed respondents.
Pp. 475 U. S.
585 -588.

															(c) Predatory pricing conspiracies are, by nature, speculative.
They require the conspirators to sustain substantial losses in
order to recover uncertain gains. The alleged conspiracy is
therefore implausible. Moreover, the record discloses that the
alleged conspiracy has not succeeded in over two decades of
operation. This is strong evidence that the conspiracy does not in
fact exist. The possibility that petitioners have obtained
supracompetitive profits in the Japanese market does not alter this
assessment. Pp. 475 U.S.
588 -593.

															(d) Mistaken inferences in cases such as this one are especially
costly, because they chill the very conduct that the antitrust laws
are designed to protect. There is little reason to be concerned
that, by granting summary judgment in cases where the evidence of
conspiracy is speculative or ambiguous, courts will encourage
conspiracies. Pp. 475 U. S.
593 -595.

															(e) The Court of Appeals erred in two respects: the "direct
evidence" on which it relied had little, if any, relevance to the
alleged predatory pricing conspiracy, and the court failed to
consider the absence of a plausible motive to engage in predatory
pricing. In the absence of any rational motive to conspire, neither
petitioners' pricing practices, their conduct in the Japanese
market, nor their agreements respecting prices and distributions in
the American market sufficed to create a "genuine issue for trial"
under Federal Rule of Civil Procedure 56(e). On remand, the Court
of Appeals may consider whether there is other, unambiguous
evidence of the alleged conspiracy. Pp. 475 U. S.
595 -598.

															723 F.2d 238, reversed and remanded. Page 475 U. S. 576 POWELL, J., delivered the opinion of the Court, in which BURGER,
C.J., and MARSHALL, REHNQUIST, and O'CONNOR, JJ., joined. WHITE,
J., filed a dissenting opinion, in which BRENNAN, BLACKMUN, and
STEVENS, JJ., joined, post, p. 475 U. S.
598 .

															JUSTICE POWELL delivered the opinion of the Court.

															This case requires that we again consider the standard district
courts must apply when deciding whether to grant summary judgment
in an antitrust conspiracy case. I Stating the facts of this case is a daunting task. The opinion
of the Court of Appeals for the Third Circuit runs to 69 pages; the
primary opinion of the District Court is more than three times as
long. In re Japanese Electronic Products Page 475 U. S. 577 Antitrust Litigation, 723 F.2d 238 (CA3 1983); 513 F.
Supp. 1100 (ED Pa.1981). Two respected District Judges each
have authored a number of opinions in this case; the published ones
alone would fill an entire volume of the Federal Supplement. In
addition, the parties have filed a 40-volume appendix in this Court
that is said to contain the essence of the evidence on which the
District Court and the Court of Appeals based their respective
decisions.

															We will not repeat what these many opinions have stated and
restated, or summarize the mass of documents that constitute the
record on appeal. Since we review only the standard applied by the
Court of Appeals in deciding this case, and not the weight assigned
to particular pieces of evidence, we find it unnecessary to state
the facts in great detail. What follows is a summary of this case's
long history. A Petitioners, defendants below, are 21 corporations that
manufacture or sell "consumer electronic products" (CEPs) -- for
the most part, television sets. Petitioners include both Japanese
manufacturers of CEPs and American firms, controlled by Japanese
parents, that sell the Japanese-manufactured products. Respondents,
plaintiffs below, are Zenith Radio Corporation (Zenith) and
National Union Electric Corporation (NUE). Zenith is an American
firm that manufactures and sells television sets. NUE is the
corporate successor to Emerson Radio Company, an American firm that
manufactured and sold television sets until 1970, when it withdrew
from the market after sustaining substantial losses. Zenith and NUE
began this lawsuit in 1974, [ Footnote 1 ] claiming
that petitioners had illegally conspired to drive Page 475 U. S. 578 American firms from the American CEP market. According to
respondents, the gist of this conspiracy was a

															"'scheme to raise, fix and maintain artificially high prices for television receivers sold by [petitioners] in Japan and,
at the same time, to fix and maintain low prices for
television receivers exported to and sold in the United
States.'"

															723 F.2d at 251 (quoting respondents' preliminary pretrial
memorandum). These "low prices" were allegedly at levels that
produced substantial losses for petitioners. 513 F. Supp. at 1125.
The conspiracy allegedly began as early as 1953, and, according to
respondents, was in full operation by sometime in the late 1960's.
Respondents claimed that various portions of this scheme violated
§§ 1 and 2 of the Sherman Act, § 2(a) of the Robinson-Patman Act, §
73 of the Wilson Tariff Act, and the Antidumping Act of 1916.

															After several years of detailed discovery, petitioners filed
motions for summary judgment on all claims against them. The
District Court directed the parties to file, with preclusive
effect, "Final Pretrial Statements" listing all the documentary
evidence that would be offered if the case proceeded to trial.
Respondents filed such a statement, and petitioners responded with
a series of motions challenging the admissibility of respondents'
evidence. In three detailed opinions, the District Court found the
bulk of the evidence on which Zenith and NUE relied inadmissible.
[ Footnote 2 ]

															The District Court then turned to petitioners' motions for
summary judgment. In an opinion spanning 217 pages, the court found
that the admissible evidence did not raise a genuine issue of
material fact as to the existence of the alleged Page 475 U. S. 579 conspiracy. At bottom, the court found, respondents' claims
rested on the inferences that could be drawn from petitioners'
parallel conduct in the Japanese and American markets, and from the
effects of that conduct on petitioners' American competitors. 513
F. Supp. at 1125-1127. After reviewing the evidence both by
category and in toto, the court found that any inference
of conspiracy was unreasonable, because (i) some portions of the
evidence suggested that petitioners conspired in ways that did not
injure respondents, and (ii) the evidence that bore directly on the
alleged price-cutting conspiracy did not rebut the more plausible
inference that petitioners were cutting prices to compete in the
American market, and not to monopolize it. Summary judgment
therefore was granted on respondents' claims under § 1 of the
Sherman Act and the Wilson Tariff Act. Because the Sherman Act § 2
claims, which alleged that petitioners had combined to monopolize
the American CEP market, were functionally indistinguishable from
the § 1 claims, the court dismissed them also. Finally, the court
found that the Robinson-Patman Act claims depended on the same
supposed conspiracy as the Sherman Act claims. Since the court had
found no genuine issue of fact as to the conspiracy, it entered
judgment in petitioners' favor on those claims as well. [ Footnote 3 ] Page 475 U. S. 580 B The Court of Appeals for the Third Circuit reversed. [ Footnote 4 ] The court began by examining the District
Court's evidentiary rulings, and determined that much of the
evidence excluded by the District Court was, in fact, admissible.
723 F.2d at 260-303. These evidentiary rulings are not before us. See 471 U.S. 1002 (1985) (limiting grant of
certiorari).

															On the merits, and based on the newly enlarged record, the court
found that the District Court's summary judgment decision was
improper. The court acknowledged that "there are legal limitations
upon the inferences which may be drawn from circumstantial
evidence," 723 F.2d at 304, but it found that "the legal problem .
. . is different" when "there is direct evidence of concert of
action." Ibid. Here, the court concluded,

															"there is both direct evidence of certain kinds of concert of
action and circumstantial evidence having some tendency to suggest
that other kinds of concert of action may have occurred." Id. at 304-305. Thus, the court reasoned, cases
concerning the limitations on inferring conspiracy from ambiguous
evidence were not dispositive. Id. at 305. Turning to the
evidence, the court determined that a factfinder reasonably could
draw the following conclusions:

															"1. The Japanese market for CEPs was characterized by
oligopolistic behavior, with a small number of producers meeting
regularly and exchanging information on price and other matters. Id. at 307. This created the opportunity for a stable
combination to raise both prices and profits in Japan. American
firms could not attack such a combination, because the Japanese
Government imposed significant barriers to entry. Ibid. "

															"2. Petitioners had relatively higher fixed costs than their
American counterparts, and therefore needed to Page 475 U. S. 581 operate at something approaching full capacity in order to make
a profit. Ibid. "

															"3. Petitioners' plant capacity exceeded the needs of the
Japanese market. Ibid. "

															"4. By formal agreements arranged in cooperation with Japan's
Ministry of International Trade and Industry (MITI), petitioners
fixed minimum prices for CEPs exported to the American market. Id. at 310. The parties refer to these prices as the
'check-prices,' and to the agreements that require them as the
'check-price agreements.'"

															"5. Petitioners agreed to distribute their products in the
United States according to a 'five-company rule': each Japanese
producer was permitted to sell only to five American distributors. Ibid. "

															"6. Petitioners undercut their own check-prices by a variety of
rebate schemes. Id. at 311. Petitioners sought to conceal
these rebate schemes both from the United States Customs Service
and from MITI, the former to avoid various customs regulations as
well as action under the antidumping laws, and the latter to cover
up petitioners' violations of the check-price agreements."

															Based on inferences from the foregoing conclusions, [ Footnote 5 ] the Court of Appeals concluded that a
reasonable factfinder could find a conspiracy to depress prices in
the American market in order to drive out American competitors,
which conspiracy was funded by excess profits obtained in the
Japanese market. The court apparently did not consider whether it
was as plausible to conclude that petitioners' price-cutting
behavior was independent, and not conspiratorial. Page 475 U. S. 582 The court found it unnecessary to address petitioners' claim
that they could not be held liable under the antitrust laws for
conduct that was compelled by a foreign sovereign. The claim, in
essence, was that, because MITI required petitioners to enter into
the check-price agreements, liability could not be premised on
those agreements. The court concluded that this case did not
present any issue of sovereign compulsion, because the check-price
agreements were being used as "evidence of a low export price
conspiracy," and not as an independent basis for finding antitrust
liability. The court also believed it was unclear that the
check-prices, in fact, were mandated by the Japanese Government,
notwithstanding a statement to that effect by MITI itself. Id. at 315.

															We granted certiorari to determine (i) whether the Court of
Appeals applied the proper standards in evaluating the District
Court's decision to grant petitioners' motion for summary judgment,
and (ii) whether petitioners could be held liable under the
antitrust laws for a conspiracy in part compelled by a foreign
sovereign. 471 U.S. 1002 (1985). We reverse on the first issue, but
do not reach the second. II We begin by emphasizing what respondents' claim is not.
Respondents cannot recover antitrust damages based solely on an
alleged cartelization of the Japanese market, because American
antitrust laws do not regulate the competitive conditions of other
nations' economies. United States v. Aluminum Co. of
America, 148 F.2d 416, 443 (CA2 1945) (L. Hand, J.); 1 P.
Areeda & D. Turner, Antitrust Law � 236d (1978). [ Footnote 6 ] Nor can respondents recover damages for Page 475 U. S. 583 any conspiracy by petitioners to charge higher than competitive
prices in the American market. Such conduct would indeed violate
the Sherman Act, United States v. Trenton Potteries Co., 273 U. S. 392 (1927); United States v. Socony-Vacuum Oil Co., 310 U. S. 150 , 310 U. S. 223 (1940), but it could not injure respondents: as petitioners'
competitors, respondents stand to gain from any conspiracy to raise
the market price in CEPs. Cf. Brunswick Corp. v. Pueblo
Bowl-O-Mat, Inc., 429 U. S. 477 , 429 U. S.
488 -489 (1977). Finally, for the same reason,
respondents cannot recover for a conspiracy to impose nonprice
restraints that have the effect of either raising market price or
limiting output. Such restrictions, though harmful to competition,
actually benefit competitors by making supracompetitive
pricing more attractive. Thus, neither petitioners' alleged
supracompetitive pricing in Japan, nor the five-company rule that
limited distribution in this country, nor the check-prices, insofar
as they established minimum prices in this country, can, by
themselves, give respondents a cognizable claim against petitioners
for antitrust damages. The Court of Appeals therefore erred to the
extent that it found evidence of these alleged conspiracies to be
"direct evidence" of a conspiracy that injured respondents. See 723 F.2d at 304-305. Page 475 U. S. 584 Respondents nevertheless argue that these supposed conspiracies,
if not themselves grounds for recovery of antitrust damages, are
circumstantial evidence of another conspiracy that is cognizable: a
conspiracy to monopolize the American market by means of pricing
below the market level. [ Footnote 7 ] The thrust
of respondents' argument is that petitioners used their monopoly
profits from the Japanese market to fund a concerted campaign to
price predatorily, and thereby drive respondents and other American
manufacturers of CEPs out of business. Once successful, according
to respondents, petitioners would cartelize the American CEP
market, restricting output and raising prices above the level that
fair competition would produce. The resulting monopoly profits,
respondents contend, would more than compensate petitioners for the
losses they incurred through years of pricing below market
level.

															The Court of Appeals found that respondents' allegation of a
horizontal conspiracy to engage in predatory pricing, [ Footnote 8 ] Page 475 U. S. 585 if proved, [ Footnote 9 ] would be a per
se violation of § 1 of the Sherman Act. 723 F.2d at 306.
Petitioners did not appeal from that conclusion. The issue in this
case thus becomes whether respondents adduced sufficient evidence
in support of their theory to survive summary judgment. We
therefore examine the principles that govern the summary judgment
determination. III To survive petitioners' motion for summary judgment, [ Footnote 10 ] respondents must establish that there is a
genuine issue of material Page 475 U. S. 586 fact as to whether petitioners entered into an illegal
conspiracy that caused respondents to suffer a cognizable injury.
Fed.Rule Civ.Proc. 56(e); [ Footnote 11 ] First National Bank of Arizona v. Cities Service Co., 391 U. S. 253 , 391 U. S.
288 -289 (1968). This showing has two components. First,
respondents must show more than a conspiracy in violation of the
antitrust laws; they must show an injury to them resulting from the
illegal conduct. Respondents charge petitioners with a whole host
of conspiracies in restraint of trade. Supra at 475 U. S.
582 -583. Except for the alleged conspiracy to monopolize
the American market through predatory pricing, these alleged
conspiracies could not have caused respondents to suffer an
"antitrust injury," Brunswick Corp. v. Pueblo Bowl-O-Mat,
Inc., 429 U.S. at 492 U. S. 489 ,
because they actually tended to benefit respondents. Supra at 475 U. S.
582 -583. Therefore, unless, in context, evidence of
these "other" conspiracies raises a genuine issue concerning the
existence of a predatory pricing conspiracy, that evidence cannot
defeat petitioners' summary judgment motion.

															Second, the issue of fact must be "genuine." Fed.Rules Civ.Proc.
56(c), (e). When the moving party has carried its burden under Rule
56(c), [ Footnote 12 ] its opponent must do more
than simply show that there is some metaphysical doubt as to the
material facts. See DeLuca v. Atlantic Refining Co., 176
F.2d 421, 423 (CA2 1949) (L. Hand, J.), cert. denied, 338
U.S. 943 (1950); 10A C. Wright, A. Miller, & M. Kane, Federal
Practice and Procedure § 2727 (1983); Clark, Special Problems Page 475 U. S. 587 in Drafting and Interpreting Procedural Codes and Rules, 3
Vand.L.Rev. 493, 504-505 (1950). Cf. Sartor v. Arkansas Natural
Gas Corp., 321 U. S. 620 , 321 U. S. 627 (1944). In the language of the Rule, the nonmoving party must come
forward with "specific facts showing that there is a genuine
issue for trial. " Fed.Rule Civ.Proc. 56(e) (emphasis added). See also Advisory Committee Note to 1963 Amendment of
Fed.Rule Civ.Proc. 56(e), 28 U.S.C.App. p. 626 (purpose of summary
judgment is to "pierce the pleadings and to assess the proof in
order to see whether there is a genuine need for trial"). Where the
record, taken as a whole, could not lead a rational trier of fact
to find for the nonmoving party, there is no "genuine issue for
trial." Cities Service, supra, at 391 U. S.
289 .

															It follows from these settled principles that, if the factual
context renders respondents' claim implausible -- if the claim is
one that simply makes no economic sense -- respondents must come
forward with more persuasive evidence to support their claim than
would otherwise be necessary. Cities Service is
instructive. The issue in that case was whether proof of the
defendant's refusal to deal with the plaintiff supported an
inference that the defendant willingly had joined an illegal
boycott. Economic factors strongly suggested that the defendant had
no motive to join the alleged conspiracy. 391 U.S. at 391 U. S.
278 -279. The Court acknowledged that, in isolation, the
defendant's refusal to deal might well have sufficed to create a
triable issue. Id. at 391 U. S. 277 .
But the refusal to deal had to be evaluated in its factual context.
Since the defendant lacked any rational motive to join the alleged
boycott, and since its refusal to deal was consistent with the
defendant's independent interest, the refusal to deal could not, by
itself, support a finding of antitrust liability. Id. at 391 U. S.
280 .

															Respondents correctly note that,

															"[o]n summary judgment, the inferences to be drawn from the
underlying facts . . . must be viewed in the light most favorable
to the party opposing the motion." United States v. Diebold,
Inc. , 369 Page 475 U. S. 588 U.S. 654, 369 U. S. 655 (1962). But antitrust law limits the range of permissible
inferences from ambiguous evidence in a § 1 case. Thus, in Monsanto Co. v. Spray-Rite Service Corp., 465 U.
S. 752 (1984), we held that conduct as consistent with
permissible competition as with illegal conspiracy does not,
standing alone, support an inference of antitrust conspiracy. Id. at 465 U. S. 764 . See also Cities Service, supra, at 391 U. S. 280 .
To survive a motion for summary judgment or for a directed verdict,
a plaintiff seeking damages for a violation of § 1 must present
evidence "that tends to exclude the possibility" that the alleged
conspirators acted independently. 465 U.S. at 465 U. S. 764 .
Respondents in this case, in other words, must show that the
inference of conspiracy is reasonable in light of the competing
inferences of independent action or collusive action that could not
have harmed respondents. See Cities Service, supra, at 391 U. S.
280 .

															Petitioners argue that these principles apply fully to this
case. According to petitioners, the alleged conspiracy is one that
is economically irrational, and practically infeasible.
Consequently, petitioners contend, they had no motive to engage in
the alleged predatory pricing conspiracy; indeed, they had a strong
motive not to conspire in the manner respondents allege.
Petitioners argue that, in light of the absence of any apparent
motive and the ambiguous nature of the evidence of conspiracy, no
trier of fact reasonably could find that the conspiracy with which
petitioners are charged actually existed. This argument requires us
to consider the nature of the alleged conspiracy and the practical
obstacles to its implementation. IV A A predatory pricing conspiracy is, by nature, speculative. Any
agreement to price below the competitive level requires the
conspirators to forgo profits that free competition would offer
them. The forgone profits may be considered an investment in the
future. For the investment to be rational, Page 475 U. S. 589 the conspirators must have a reasonable expectation of
recovering, in the form of later monopoly profits, more than the
losses suffered. As then-Professor Bork, discussing predatory
pricing by a single firm, explained:

															"Any realistic theory of predation recognizes that the predator
as well as his victims will incur losses during the fighting, but
such a theory supposes it may be a rational calculation for the
predator to view the losses as an investment in future monopoly
profits (where rivals are to be killed) or in future undisturbed
profits (where rivals are to be disciplined). The future flow of
profits, appropriately discounted, must then exceed the present
size of the losses."

															R. Bork, The Antitrust Paradox 145 (1978). See also McGee, Predatory Pricing Revisited, 23 J.Law & Econ. 289,
295-297 (1980). As this explanation shows, the success of such
schemes is inherently uncertain: the short-run loss is definite,
but the long-run gain depends on successfully neutralizing the
competition. Moreover, it is not enough simply to achieve monopoly
power, as monopoly pricing may breed quick entry by new competitors
eager to share in the excess profits. The success of any predatory
scheme depends on maintaining monopoly power for long
enough both to recoup the predator's losses and to harvest some
additional gain. Absent some assurance that the hoped-for monopoly
will materialize, and that it can be sustained for a
significant period of time, "[t]he predator must make a substantial
investment with no assurance that it will pay off." Easterbrook,
Predatory Strategies and Counterstrategies, 48 U.Chi.L.Rev. 263,
268 (1981). For this reason, there is a consensus among
commentators that predatory pricing schemes are rarely tried, and
even more rarely successful. See, e.g., Bork, supra, at 149-155; Areeda & Turner, Predatory Pricing
and Related Practices Under Section 2 of the Sherman Act, 88
Harv.L.Rev. 697, 699 (1975); Easterbrook, supra; Koller,
The Myth of Predatory Pricing -- An Empirical Study, Page 475 U. S. 590 4 Antitrust Law & Econ.Rev. 105 (1971); McGee, Predatory
Price Cutting: The Standard Oil (N.J.) Case, 1 J.Law &
Econ. 137 (1958); McGee, Predatory Pricing Revisited, 23 J.Law
& Econ., at 292-294. See also Northeastern Telephone Co. v.
American Telephone & Telegraph Co., 651 F.2d 76, 88 (CA2
1981) ("[N]owhere in the recent outpouring of literature on the
subject do commentators suggest that [predatory] pricing is either
common or likely to increase"), cert. denied, 455 U.S. 943
(1982).

															These observations apply even to predatory pricing by a single firm seeking monopoly power. In this case,
respondents allege that a large number of firms have conspired over
a period of many years to charge below-market prices in order to
stifle competition. Such a conspiracy is incalculably more
difficult to execute than an analogous plan undertaken by a single
predator. The conspirators must allocate the losses to be sustained
during the conspiracy's operation, and must also allocate any gains
to be realized from its success. Precisely because success is
speculative and depends on a willingness to endure losses for an
indefinite period, each conspirator has a strong incentive to
cheat, letting its partners suffer the losses necessary to destroy
the competition while sharing in any gains if the conspiracy
succeeds. The necessary allocation is therefore difficult to
accomplish. Yet if conspirators cheat to any substantial extent,
the conspiracy must fail, because its success depends on depressing
the market price for all buyers of CEPs. If there are too
few goods at the artificially low price to satisfy demand, the
would-be victims of the conspiracy can continue to sell at the
"real" market price, and the conspirators suffer losses to little
purpose.

															Finally, if predatory pricing conspiracies are generally
unlikely to occur, they are especially so where, as here, the
prospects of attaining monopoly power seem slight. In order to
recoup their losses, petitioners must obtain enough market power to
set higher than competitive prices, and then must sustain those
prices long enough to earn in excess profits Page 475 U. S. 591 what they earlier gave up in below-cost prices. See
Northeastern Telephone Co. v. American Telephone & Telegraph
Co., supra, at 89; Areeda & Turner, 88 Harv.L.Rev. at 698.
Two decades after their conspiracy is alleged to have commenced,
[ Footnote 13 ] petitioners appear to be far from
achieving this goal: the two largest shares of the retail market in
television sets are held by RCA and respondent Zenith, not by any
of petitioners. 6 App. to Brief for Appellant in No. 81-2331 (CA3),
pp. 2575a-2576a. Moreover, those shares, which together approximate
40% of sales, did not decline appreciably during the 1970's. Ibid. Petitioners' collective share rose rapidly during
this period, from one-fifth or less of the relevant markets to
close to 50%. 723 F.2d at 316. [ Footnote 14 ]
Neither the District Court nor the Court of Appeals found, however,
that petitioners' share presently allows them to charge monopoly
prices; to the contrary, respondents contend that the conspiracy is
ongoing -- that petitioners are still artificially depressing the market price in order to drive Zenith out
of the market. The data in the record strongly suggest that that
goal is yet far distant. [ Footnote 15 ] Page 475 U. S. 592 The alleged conspiracy's failure to achieve its ends in the two
decades of its asserted operation is strong evidence that the
conspiracy does not, in fact, exist. Since the losses in such a
conspiracy accrue before the gains, they must be "repaid" with
interest. And because the alleged losses have accrued over the
course of two decades, the conspirators could well require a
correspondingly long time to recoup. Maintaining supracompetitive
prices, in turn, depends on the continued cooperation of the
conspirators, on the inability of other would-be competitors to
enter the market, and (not incidentally) on the conspirators'
ability to escape antitrust liability for their minimum price-fixing cartel. [ Footnote 16 ] Each of these
factors weighs more heavily as the time needed to recoup losses
grows. If the losses have been substantial -- as would likely be
necessary Page 475 U. S. 593 in order to drive out the competition [ Footnote
17 ] -- petitioners would most likely have to sustain their
cartel for years simply to break even.

															Nor does the possibility that petitioners have obtained
supracompetitive profits in the Japanese market change this
calculation. Whether or not petitioners have the means to
sustain substantial losses in this country over a long period of
time, they have no motive to sustain such losses, absent
some strong likelihood that the alleged conspiracy in this country
will eventually pay off. The courts below found no evidence of any
such success, and -- as indicated above -- the facts actually are
to the contrary: RCA and Zenith, not any of the petitioners,
continue to hold the largest share of the American retail market in
color television sets. More important, there is nothing to suggest
any relationship between petitioners' profits in Japan and the
amount petitioners could expect to gain from a conspiracy to
monopolize the American market. In the absence of any such
evidence, the possible existence of supracompetitive profits in
Japan simply cannot overcome the economic obstacles to the ultimate
success of this alleged predatory conspiracy. [ Footnote 18 ] B In Monsanto, we emphasized that courts should not
permit factfinders to infer conspiracies when such inferences are
implausible, because the effect of such practices is often to deter
procompetitive conduct. Monsanto, 465 U.S. at 465 U. S.
762 -764. Page 475 U. S. 594 Respondents, petitioners' competitors, seek to hold petitioners
liable for damages caused by the alleged conspiracy to cut prices.
Moreover, they seek to establish this conspiracy indirectly,
through evidence of other combinations (such as the check-price
agreements and the five-company rule) whose natural tendency is to
raise prices, and through evidence of rebates and other
price-cutting activities that respondents argue tend to prove a
combination to suppress prices. [ Footnote 19 ]
But cutting prices in order to increase business often is the very
essence of competition. Thus, mistaken inferences in cases such as
this one are especially costly, because they chill the very conduct
the antitrust laws are designed to protect. See Monsanto,
supra, at 465 U. S.
763 -764.

															"[W]e must be concerned lest a rule or precedent that authorizes
a search for a particular type of undesirable pricing behavior end
up by discouraging legitimate price competition." Barry Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227,
234 (CA1 1983).

															In most cases, this concern must be balanced against the desire
that illegal conspiracies be identified and punished. That balance
is, however, unusually one-sided in cases such as this one. As we
earlier explained, supra at 475 U.S. 588 -593, predatory pricing
schemes require conspirators to suffer losses in order eventually
to realize their illegal gains; moreover, the Page 475 U. S. 595 likely to fail than to succeed. These economic realities tend to
make predatory pricing conspiracies self-deterring: unlike most
other conduct that violates the antitrust laws, failed predatory
pricing schemes are costly to the conspirators. See Easterbrook, The Limits of Antitrust, 63 Texas L.Rev. 1, 26 (1984).
Finally, unlike predatory pricing by a single firm, successful predatory pricing conspiracies involving a
large number of firms can be identified and punished once they
succeed, since some form of minimum price-fixing agreement would be
necessary in order to reap the benefits of predation. Thus, there
is little reason to be concerned that, by granting summary judgment
in cases where the evidence of conspiracy is speculative or
ambiguous, courts will encourage such conspiracies. V As our discussion in 475 U. S. petitioners had no motive to enter into the alleged conspiracy. To
the contrary, as presumably rational businesses, petitioners had
every incentive not to engage in the conduct with which
they are charged, for its likely effect would be to generate losses
for petitioners with no corresponding gains. Cf. Cities
Service, 391 U.S. at 391 U. S. 279 .
The Court of Appeals did not take account of the absence of a
plausible motive to enter into the alleged predatory pricing
conspiracy. It focused instead on whether there was "direct
evidence of concert of action." 723 F.2d at 304. The Court of
Appeals erred in two respects: (i) the "direct evidence" on which
the court relied had little, if any, relevance to the alleged
predatory pricing conspiracy; and (ii) the court failed to consider
the absence of a plausible motive to engage in predatory
pricing.

															The "direct evidence" on which the court relied was evidence of other combinations, not of a predatory pricing conspiracy.
Evidence that petitioners conspired to raise prices in Japan
provides little, if any, support for respondents' Page 475 U. S. 596 claims: a conspiracy to increase profits in one market does not
tend to show a conspiracy to sustain losses in another. Evidence
that petitioners agreed to fix minimum prices (through the
check-price agreements) for the American market actually works in
petitioners' favor, because it suggests that petitioners were
seeking to place a floor under prices, rather than to lower them.
The same is true of evidence that petitioners agreed to limit the
number of distributors of their products in the American market --
the so-called five-company rule. That practice may have facilitated
a horizontal territorial allocation, see United States v. Topco
Associates, Inc., 405 U. S. 596 (1972), but its natural effect would be to raise market prices,
rather than reduce them. [ Footnote 20 ] Evidence
that tends to support any of these collateral conspiracies thus
says little, if anything, about the existence of a conspiracy to
charge below-market prices in the American market over a period of
two decades.

															That being the case, the absence of any plausible motive to
engage in the conduct charged is highly relevant to whether a
"genuine issue for trial" exists within the meaning of Rule 56(e).
Lack of motive bears on the range of permissible conclusions that
might be drawn from ambiguous evidence: if petitioners had no
rational economic motive to conspire, and if their conduct is
consistent with other, equally plausible explanations, Page 475 U. S. 597 the conduct does not give rise to an inference of conspiracy. See Cities Service, supra, at 391 U. S.
278 -280. Here, the conduct in question consists largely
of (i) pricing at levels that succeeded in taking business away
from respondents, and (ii) arrangements that may have limited
petitioners' ability to compete with each other (and thus kept
prices from going even lower). This conduct suggests either that
petitioners behaved competitively, or that petitioners conspired to raise prices. Neither possibility is consistent with an
agreement among 21 companies to price below market levels.
Moreover, the predatory pricing scheme that this conduct is said to
prove is one that makes no practical sense: it calls for
petitioners to destroy companies larger and better established than
themselves, a goal that remains far distant more than two decades
after the conspiracy's birth. Even had they succeeded in obtaining
their monopoly, there is nothing in the record to suggest that they
could recover the losses they would need to sustain along the way.
In sum, in light of the absence of any rational motive to conspire,
neither petitioners' pricing practices, nor their conduct in the
Japanese market, nor their agreements respecting prices and
distribution in the American market, suffice to create a "genuine
issue for trial." Fed.Rule Civ.Proc. 56(e). [ Footnote 21 ]

															On remand, the Court of Appeals is free to consider whether
there is other evidence that is sufficiently unambiguous to permit
a trier of fact to find that petitioners conspired to price
predatorily for two decades despite the absence of any apparent
motive to do so. The evidence must "ten[d] to exclude the
possibility" that petitioners underpriced respondents to compete
for business, rather than to implement an economically Page 475 U. S. 598 senseless conspiracy. Monsanto, 465 U.S. at 465 U. S. 764 .
In the absence of such evidence, there is no "genuine issue for
trial" under Rule 56(e), and petitioners are entitled to have
summary judgment reinstated. VI Our decision makes it unnecessary to reach the sovereign
compulsion issue. The heart of petitioners' argument on that issue
is that MITI, an agency of the Government of Japan, required
petitioners to fix minimum prices for export to the United States,
and that petitioners are therefore immune from antitrust liability
for any scheme of which those minimum prices were an integral part.
As we discussed in 475 U. S. supra, respondents could not have suffered a cognizable
injury from any action that raised prices in the American
CEP market. If liable at all, petitioners are liable for conduct
that is distinct from the check-price agreements. The sovereign
compulsion question that both petitioners and the Solicitor General
urge us to decide thus is not presented here.

															The decision of the Court of Appeals is reversed, and the case
is remanded for further proceedings consistent with this
opinion. It is so ordered. [ Footnote 1 ]

															NUE had filed its complaint four years earlier, in the District
Court for the District of New Jersey. Zenith's complaint was filed
separately in 1974, in the Eastern District of Pennsylvania. The
two cases were consolidated in the Eastern District of Pennsylvania
in 1974.

															[ Footnote 2 ]

															The inadmissible evidence included various government records
and reports, Zenith Radio Corp. v. Matsushita Electric
Industrial Co., 505 F.
Supp. 1125 (ED Pa.1980), business documents offered pursuant to
various hearsay exceptions, Zenith Radio Corp. v. Matsushita
Electric Industrial Co., 505 F.
Supp. 1190 (ED Pa.1980), and a large portion of the expert
testimony that respondents proposed to introduce. Zenith Radio
Corp. v. Matsushita Electric Industrial Co., 505 F.
Supp. 1313 (ED Pa.1981).

															[ Footnote 3 ]

															The District Court ruled separately that petitioners were
entitled to summary judgment on respondents' claims under the
Antidumping Act of 1916. Zenith Radio Corp. v. Matsushita
Electric Industrial Co., 494 F.
Supp. 1190 (ED Pa.1980). Respondents appealed this ruling, and
the Court of Appeals reversed in a separate opinion issued the same
day as the opinion concerning respondents' other claims. In re
Japanese Electronic Products Antitrust Litigation, 723 F.2d
319 (CA3 1983).

															Petitioners ask us to review the Court of Appeals' Antidumping
Act decision along with its decision on the rest of this mammoth
case. The Antidumping Act claims were not, however, mentioned in
the questions presented in the petition for certiorari, and they
have not been independently argued by the parties. See this Court's Rule 21.1(a). We therefore decline the invitation to
review the Court of Appeals' decision on those claims.

															[ Footnote 4 ]

															As to 3 of the 24 defendants, the Court of Appeals affirmed the
entry of summary judgment. Petitioners are the 21 defendants who
remain in the case.

															[ Footnote 5 ]

															In addition to these inferences, the court noted that there was
expert opinion evidence that petitioners' export sales "generally
were at prices which produced losses, often as high as twenty-five
percent on sales." 723 F.2d at 311. The court did not identify any
direct evidence of below-cost pricing; nor did it place
particularly heavy reliance on this aspect of the expert evidence. See n 19, infra. [ Footnote 6 ]

															The Sherman Act does reach conduct outside our borders, but only
when the conduct has an effect on American commerce. Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U. S. 690 , 370 U. S. 704 (1962) ("A conspiracy to monopolize or restrain the domestic or
foreign commerce of the United States is not outside the reach of
the Sherman Act just because part of the conduct complained of
occurs in foreign countries"). The effect on which respondents rely
is the artificially depressed level of prices for CEPs in the
United States.

															Petitioners' alleged cartelization of the Japanese market could
not have caused that effect over a period of some two decades. Once
petitioners decided, as respondents allege, to reduce output and
raise prices in the Japanese market, they had the option of either
producing fewer goods or selling more goods in other markets. The
most plausible conclusion is that petitioners chose the latter
option because it would be more profitable than the former. That
choice does not flow from the cartelization of the Japanese market.
On the contrary, were the Japanese market perfectly competitive,
petitioners would still have to choose whether to sell goods
overseas, and would still presumably make that choice based on
their profit expectations. For this reason, respondents' theory of
recovery depends on proof of the asserted price-cutting conspiracy
in this country.

															[ Footnote 7 ]

															Respondents also argue that the check-prices, the five-company
rule, and the price-fixing in Japan are all part of one large
conspiracy that includes monopolization of the American market
through predatory pricing. The argument is mistaken. However one
decides to describe the contours of the asserted conspiracy --
whether there is one conspiracy or several -- respondents must show
that the conspiracy caused them an injury for which the antitrust
laws provide relief. Associated General Contractors of
California, Inc. v. Carpenters, 459 U.
S. 519 , 538-540 (1983); Brunswick Corp. v. Pueblo
Bowl-O-Mat, Inc., 429 U. S. 477 , 429 U. S.
488 -489 (1977); see also Note, Antitrust
Standing, Antitrust Injury, and the Per Se Standard, 93 Yale L.J.
1309 (1984). That showing depends in turn on proof that petitioners
conspired to price predatorily in the American market, since the
other conduct involved in the alleged conspiracy cannot have caused
such an injury.

															[ Footnote 8 ]

															Throughout this opinion, we refer to the asserted conspiracy as
one to price "predatorily." This term has been used chiefly in
cases in which a single firm, having a dominant share of the
relevant market, cuts its prices in order to force competitors out
of the market, or perhaps to deter potential entrants from coming
in. E.g., Southern Pacific Communications Co. v. American
Telephone & Telegraph Co., 238 U.S.App.D.C. 309, 331-336,
740 F.2d 980, 1002-1007 (1984), cert. denied, 470 U.S.
1005 (1985). In such cases, "predatory pricing" means pricing below
some appropriate measure of cost. E.g., Barry Wright Corp. v.
ITT Grinnell Corp., 724 F.2d 227, 232-235 (CA1 1983); see
Utah Pie Co. v. Continental Baking Co., 386 U.
S. 685 , 386 U. S. 698 , 386 U. S. 701 , 386 U. S. 702 ,
n. 14 (1967).

															There is a good deal of debate, both in the cases and in the law
reviews, about what "cost" is relevant in such cases. We need not
resolve this debate here, because, unlike the cases cited above,
this is a Sherman Act §1 case. For purposes of this case, it is
enough to note that respondents have not suffered an antitrust
injury unless petitioners conspired to drive respondents out of the
relevant markets by (i) pricing below the level necessary to sell
their products, or (ii) pricing below some appropriate measure of
cost. An agreement without these features would either leave
respondents in the same position as would market forces or would
actually benefit respondents by raising market prices. Respondents
therefore may not complain of conspiracies that, for example, set
maximum prices above market levels, or that set minimum prices at any level.

															[ Footnote 9 ]

															We do not consider whether recovery should ever be
available on a theory such as respondents' when the pricing in
question is above some measure of incremental cost. See
generally Areeda § Turner, Predatory Pricing and Related
Practices Under Section 2 of the Sherman Act, 88 Harv.L.Rev. 697,
709-718 (1975) (discussing cost-based test for use in § 2 cases).
As a practical matter, it may be that only direct evidence of
below-cost pricing is sufficient to overcome the strong inference
that rational businesses would not enter into conspiracies such as
this one. See 475 U. S. infra. [ Footnote 10 ]

															Respondents argued before the District Court that petitioners
had failed to carry their initial burden under Federal Rule of
Civil Procedure 56(c) of demonstrating the absence of a genuine
issue of material fact. See Adickes v. S. H. Kress &
Co., 398 U. S. 144 , 398 U. S. 157 (1970). Cf. Catrett v. Johns-Manville Sales Corp., 244
U.S.App.D.C. 160, 756 F.2d 181, cert. granted, 474 U.S.
944 (1985). That issue was resolved in petitioners' favor, and is
not before us.

															[ Footnote 11 ]

															Rule 56(e) provides, in relevant part:

															"When a motion for summary judgment is made and supported as
provided in this rule, an adverse party may not rest upon the mere
allegations or denials of his pleading, but his response, by
affidavits or as otherwise provided in this rule, must set forth
specific facts showing that there is a genuine issue for trial. If
he does not so respond, summary judgment, if appropriate, shall be
entered against him."

															[ Footnote 12 ] See n 10, supra. [ Footnote 13 ]

															NUE's complaint alleges that petitioners' conspiracy began as
early as 1960; the starting date used in Zenith's complaint is
1953. NUE Complaint � 52; Zenith Complaint � 39.

															[ Footnote 14 ]

															During the same period, the number of American firms
manufacturing television sets declined from 19 to 13. 6 App. to
Brief for Appellant in No. 81-2331 (CA3), p.1961a. This decline
continued a trend that began at least by 1960, when petitioners'
sales in the United States market were negligible. Ibid. See Zenith Complaint �� 35, 37.

															[ Footnote 15 ]

															Respondents offer no reason to suppose that entry into the
relevant market is especially difficult, yet, without barriers to
entry, it would presumably be impossible to maintain
supracompetitive prices for an extended time. Judge Easterbrook,
commenting on this case in a law review article, offers the
following sensible assessment:

															"The plaintiffs [in this case] maintain that, for the last
fifteen years or more, at least ten Japanese manufacturers have
sold TV sets at less than cost in order to drive United States
firms out of business. Such conduct cannot possibly produce profits
by harming competition, however. If the Japanese firms drive some
United States firms out of business, they could not recoup. Fifteen
years of losses could be made up only by very high prices for the
indefinite future. (The losses are like investments, which must be
recovered with compound interest.) If the defendants should try to
raise prices to such a level, they would attract new competition.
There are no barriers to entry into electronics, as the
proliferation of computer and audio firms shows. The competition
would come from resurgent United States firms, from other foreign
firms (Korea and many other nations make TV sets), and from
defendants themselves. In order to recoup, the Japanese firms would
need to suppress competition among themselves. On plaintiffs'
theory, the cartel would need to last at least thirty years, far
longer than any in history, even when cartels were not illegal.
None should be sanguine about the prospects of such a cartel, given
each firm's incentive to shave price and expand its share of sales.
The predation recoupment story therefore does not make sense, and
we are left with the more plausible inference that the Japanese
firms did not sell below cost in the first place. They were just
engaged in hard competition."

															Easterbrook, The Limits of Antitrust, 63 Texas L.Rev. 1, 26-27
(1984) (footnotes omitted).

															[ Footnote 16 ]

															The alleged predatory scheme makes sense only if petitioners can
recoup their losses. In light of the large number of firms involved
here, petitioners can achieve this only by engaging in some form of
price-fixing after they have succeeded in driving competitors from
the market. Such price-fixing would, of course, be an independent
violation of § 1 of the Sherman Act. United States v.
Socony-Vacuum Oil Co., 310 U. S. 150 (1940).

															[ Footnote 17 ]

															The predators' losses must actually increase as the
conspiracy nears its objective: the greater the predators' market
share, the more products the predators sell; but since every sale
brings with it a loss, an increase in market share also means an
increase in predatory losses.

															[ Footnote 18 ]

															The same is true of any supposed excess production capacity that
petitioners may have possessed. The existence of plant capacity
that exceeds domestic demand does tend to establish the ability to
sell products abroad. It does not, however, provide a motive for
selling at prices lower than necessary to obtain sales; nor does it
explain why petitioners would be willing to lose money in
the United States market without some reasonable prospect of
recouping their investment.

															[ Footnote 19 ]

															Respondents also rely on an expert study suggesting that
petitioners have sold their products in the American market at
substantial losses. The relevant study is not based on actual cost
data; rather, it consists of expert opinion based on a mathematical
construction that, in turn, rests on assumptions about petitioners'
costs. The District Court analyzed those assumptions in some detail
and found them both implausible and inconsistent with record
evidence. Zenith Radio Corp. v. Matsushita Electric Industrial
Co., 505 F. Supp. at 1356-1363. Although the Court of Appeals
reversed the District Court's finding that the expert report was
inadmissible, the court did not disturb the District Court's
analysis of the factors that substantially undermine the probative
value of that evidence. See 723 F.2d at 277-282. We find
the District Court's analysis persuasive. Accordingly, in our view,
the expert opinion evidence of below-cost pricing has little
probative value in comparison with the economic factors, discussed
in 475 U. S. supra, that
suggest that such conduct is irrational.

															[ Footnote 20 ]

															The Court of Appeals correctly reasoned that the five-company
rule might tend to insulate petitioners from competition with each
other. 723 F.2d at 306. But this effect is irrelevant to a
conspiracy to price predatorily. Petitioners have no incentive to
underprice each other if they already are pricing below the level at which they could sell their goods. The far more
plausible inference from a customer allocation agreement such as
the five-company rule is that petitioners were conspiring to raise prices, by limiting their ability to take sales away
from each other. Respondents -- petitioners' competitors -- suffer
no harm from a conspiracy to raise prices. Supra at 475 U. S.
582 -583. Moreover, it seems very unlikely that the
five-company rule had any significant effect of any kind, since the
"rule" permitted petitioners to sell to their American
subsidiaries, and did not limit the number of distributors to which
the subsidiaries could resell. 513 F. Supp. at 1190.

															[ Footnote 21 ]

															We do not imply that, if petitioners had had a plausible reason
to conspire, ambiguous conduct could suffice to create a triable
issue of conspiracy. Our decision in Monsanto Co. v. Spray-Rite
Service Corp., 465 U. S. 752 (1984), establishes that conduct that is as consistent with
permissible competition as with illegal conspiracy does not,
without more, support even an inference of conspiracy. Id. at 465 U. S.
763 -764. See supra at 475 U.S. 588 .

															JUSTICE WHITE, with whom JUSTICE BRENNAN, JUSTICE BLACKMUN, and
JUSTICE STEVENS join, dissenting.

															It is indeed remarkable that the Court, in the face of the long
and careful opinion of the Court of Appeals, reaches the result it
does. The Court of Appeals faithfully followed the relevant
precedents, including First National Bank of Arizona v. Cities
Service Co., 391 U. S. 253 (1968), and Monsanto Co. v. Spray-Rite Service Corp., 465 U. S. 752 (1984), and it kept firmly in mind the principle that proof of a
conspiracy should not be fragmented, see Continental Ore Co. v.
Union Carbide & Carbon Corp., 370 U.
S. 690 , 370 U. S. 699 (1962). After surveying the massive record, including very Page 475 U. S. 599 significant evidence that the District Court erroneously had
excluded, the Court of Appeals concluded that the evidence, taken
as a whole, creates a genuine issue of fact whether petitioners
engaged in a conspiracy in violation of §§ 1 and 2 of the Sherman
Act and § 2(a) of the Robinson-Patman Act. In my view, the Court of
Appeals' opinion more than adequately supports this judgment.

															The Court's opinion today, far from identifying reversible
error, only muddies the waters. In the first place, the Court makes
confusing and inconsistent statements about the appropriate
standard for granting summary judgment. Second, the Court makes a
number of assumptions that invade the factfinder's province. Third,
the Court faults the Third Circuit for nonexistent errors, and
remands the case although it is plain that respondents' evidence
raises genuine issues of material fact. I The Court's initial discussion of summary judgment standards
appears consistent with settled doctrine. I agree that,

															"[w]here the record, taken as a whole, could not lead a rational
trier of fact to find for the nonmoving party, there is no 'genuine
issue for trial.'" Ante at 475 U. S. 587 (quoting Cities Service, supra, at 391 U. S.
289 ). I also agree that,

															"[o]n summary judgment, the inferences to be drawn from the
underlying facts . . . must be viewed in the light most favorable
to the party opposing the motion." Ante at 475 U. S. 587 (quoting United States v. Diebold, Inc., 369 U.
S. 654 , 369 U. S. 655 (1962)). But other language in the Court's opinion suggests a
departure from traditional summary judgment doctrine. Thus, the
Court gives the following critique of the Third Circuit's
opinion:

															"[T]he Court of Appeals concluded that a reasonable factfinder
could find a conspiracy to depress prices in the American market in
order to drive out American competitors, which conspiracy was
funded by excess profits obtained in the Japanese market. The court
apparently did not consider whether it was as plausible to
conclude Page 475 U. S. 600 that petitioners' price-cutting behavior was independent, and
not conspiratorial." Ante at 475 U. S.
581 .

															In a similar vein, the Court summarizes Monsanto Co. v.
Spray-Rite Service Corp., supra, as holding that "courts
should not permit factfinders to infer conspiracies when such
inferences are implausible. . . ." Ante at 475 U. S. 593 .
Such language suggests that a judge hearing a defendant's motion
for summary judgment in an antitrust case should go beyond the
traditional summary judgment inquiry and decide for himself whether
the weight of the evidence favors the plaintiff. Cities
Service and Monsanto do not stand for any such
proposition. Each of those cases simply held that a particular
piece of evidence, standing alone, was insufficiently
probative to justify sending a case to the jury. [ Footnote 2/1 ] These holdings in no way undermine Page 475 U. S. 601 the doctrine that all evidence must be construed in the light
most favorable to the party opposing summary judgment.

															If the Court intends to give every judge hearing a motion for
summary judgment in an antitrust case the job of determining if the
evidence makes the inference of conspiracy more probable than not,
it is overturning settled law. If the Court does not intend such a
pronouncement, it should refrain from using unnecessarily broad and
confusing language. II In defining what respondents must show in order to recover, the
Court makes assumptions that invade the factfinder's province. The
Court states with very little discussion that respondents can
recover under § 1 of the Sherman Act only if they prove that

															"petitioners conspired to drive respondents out of the relevant
markets by (i) pricing below the level necessary to sell their
products, or (ii) pricing below some appropriate measure of
cost." Ante at 475 U. S. 585 ,
n. 8. This statement is premised on the assumption that

															"[a]n agreement without these features would either leave
respondents in the same position as would market forces or would
actually benefit respondents by raising market prices." Ibid. In making this assumption, the Court ignores the
contrary conclusions of respondents' expert DePodwin, whose report
in very relevant part was erroneously excluded by the District
Court.

															The DePodwin Report, on which the Court of Appeals relied along
with other material, indicates that respondents were harmed in two
ways that are independent of whether petitioners priced their
products below "the level necessary to sell their products or . . .
some appropriate measure of cost." Ibid. First, the Report
explains that the price-raising scheme in Japan resulted in lower
consumption of petitioners' goods in that country, and the
exporting of more of petitioners' goods to this country, than would
have occurred had prices in Japan been at the competitive level.
Increasing Page 475 U. S. 602 exports to this country resulted in depressed prices here, which
harmed respondents. [ Footnote 2/2 ] Second, the
DePodwin Report indicates that petitioners exchanged confidential
proprietary information and entered into agreements such as the
five-company rule with the goal of avoiding intragroup competition
in the United States market. The Report explains that petitioners'
restrictions on intragroup competition caused respondents to lose
business that they would not have lost had petitioners competed
with one another. [ Footnote 2/3 ] Page 475 U. S. 603 The DePodwin Report alone creates a genuine factual issue
regarding the harm to respondents caused by Japanese cartelization
and by agreements restricting competition among petitioners in this
country. No doubt the Court prefers its own economic theorizing to
Dr. DePodwin's, but that is not a reason to deny the factfinder an
opportunity to consider Dr. DePodwin's views on how petitioners'
alleged collusion harmed respondents. [ Footnote
2/4 ] Page 475 U. S. 604 The Court, in discussing the unlikelihood of a predatory
conspiracy, also consistently assumes that petitioners valued
profit-maximization over growth. See, e.g., ante at 475 U. S. 595 .
In light of the evidence that petitioners sold their goods in this
country at substantial losses over a long period of time, see Part III-B , infra, I believe that this is an assumption that should be argued
to the factfinder, not decided by the Court. III In reversing the Third Circuit's judgment, the Court identifies
two alleged errors:

															"(i) [T]he 'direct evidence' on which the [Court of Appeals]
relied had little, if any, relevance to the alleged predatory
pricing conspiracy; and (ii) the court failed to consider the
absence of a plausible motive to engage in predatory pricing." Ante at 475 U. S. 595 .
The Court's position is without substance. A The first claim of error is that the Third Circuit treated
evidence regarding price-fixing in Japan and the so-called
five-company rule and check-prices as " direct evidence' of a
conspiracy that injured respondents." Ante at 475 U. S. 583 (citing In re Japanese Electronics Products Antitrust
Litigation, 723 F.2d 238, 304-305 (1983)). The passage from
the Third Page 475 U. S. 605 Circuit's opinion in which the Court locates this alleged error
makes what I consider to be a quite simple and correct observation,
namely, that this case is distinguishable from traditional
"conscious parallelism" cases in that there is direct evidence of
concert of action among petitioners. Ibid. The Third
Circuit did not, as the Court implies, jump unthinkingly from this
observation to the conclusion that evidence regarding the
five-company rule could support a finding of antitrust injury to
respondents. [ Footnote 2/5 ] The Third Circuit
twice specifically noted that horizontal agreements allocating
customers, though illegal, do not ordinarily injure competitors of
the agreeing parties. Id. at 306, 310-311. However, after
reviewing evidence of cartel activity in Japan, collusive
establishment of dumping prices in this country, and long-term,
below-cost sales, the Third Circuit held that a factfinder could
reasonably conclude that the five-company rule was not a simple
price-raising device:

															"[A] factfinder might reasonably infer that the allocation of
customers in the United States, combined with price-fixing in
Japan, was intended to permit concentration of the effects of
dumping upon American competitors while eliminating competition
among the Japanese manufacturers in either market." Id. at 311. I see nothing erroneous in this
reasoning. B The Court's second charge of error is that the Third Circuit was
not sufficiently skeptical of respondents' allegation that
petitioners engaged in predatory pricing conspiracy. But Page 475 U. S. 606 the Third Circuit is not required to engage in academic
discussions about predation; it is required to decide whether
respondents' evidence creates a genuine issue of material fact. The
Third Circuit did its job, and remanding the case so that it can do
the same job again is simply pointless.

															The Third Circuit indicated that it considers respondents'
evidence sufficient to create a genuine factual issue regarding
long-term, below-cost sales by petitioners. Ibid. The
Court tries to whittle away at this conclusion by suggesting that
the

															"expert opinion evidence of below-cost pricing has little
probative value in comparison with the economic factors . . . that
suggest that such conduct is irrational." Ante at 475 U. S. 594 ,
n.19. But the question is not whether the Court finds respondents'
experts persuasive, or prefers the District Court's analysis; it is
whether, viewing the evidence in the light most favorable to
respondents, a jury or other factfinder could reasonably conclude
that petitioners engaged in long-term, below-cost sales. I agree
with the Third Circuit that the answer to this question is
"yes."

															It is misleading for the Court to state that the Court of
Appeals

															"did not disturb the District Court's analysis of the factors
that substantially undermine the probative value of [evidence in
the DePodwin Report respecting below-cost sales]." Ibid. The Third Circuit held that the exclusion of the
portion of the DePodwin Report regarding below-cost pricing was
erroneous because

															"the trial court ignored DePodwin's uncontradicted affidavit
that all data relied on in his report were of the type on which
experts in his field would reasonably rely."

															723 F.2d at 282. In short, the Third Circuit found DePodwin's
affidavit sufficient to create a genuine factual issue regarding
the correctness of his conclusion that petitioners sold below cost
over a long period of time. Having made this determination, the
court saw no need -- nor do I -- to address the District Court's
analysis point by point. The District Court's criticisms of
DePodwin's Page 475 U. S. 607 methods are arguments that a factfinder should consider. IV Because I believe that the Third Circuit was correct in holding
that respondents have demonstrated the existence of genuine issues
of material fact, I would affirm the judgment below and remand this
case for trial.

															[ Footnote 2/1 ]

															The Court adequately summarizes the quite fact-specific holding
in Cities Service. Ante at 475 U. S.
587 .

															In Monsanto, the Court held that a manufacturer's
termination of a price-cutting distributor after receiving a
complaint from another distributor is not, standing alone, sufficient to create a jury question. 465 U.S. at 465 U. S.
763 -764. To understand this holding, it is important to
realize that, under United States v. Colgate & Co., 250 U. S. 300 (1919), it is permissible for a manufacturer to announce retail
prices in advance and terminate those who fail to comply, but that
under Dr. Miles Medical Co. v. John D. Park & Sons
Co., 220 U. S. 373 (1911), it is impermissible for the manufacturer and its
distributors to agree on the price at which the distributors will
sell the goods. Thus, a manufacturer's termination of a
price-cutting distributor after receiving a complaint from another
distributor is lawful under Colgate, unless the
termination is pursuant to a shared understanding between the
manufacturer and its distributors respecting enforcement of a
resale price maintenance scheme. Monsanto holds that, to
establish liability under Dr. Miles, more is needed than
evidence of behavior that is consistent with a distributor's
exercise of its prerogatives under Colgate. Thus,

															"[t]here must be evidence that tends to exclude the possibility
that the manufacturer and nonterminated distributors were acting
independently."

															465 U.S. at 465 U. S. 764 . Monsanto does not hold that, if a terminated
dealer produces some further evidence of conspiracy beyond the bare
fact of postcomplaint termination, the judge hearing a motion for
summary judgment should balance all the evidence pointing toward
conspiracy against all the evidence pointing toward independent
action.

															[ Footnote 2/2 ]

															Dr. DePodwin summarizes his view of the harm caused by Japanese
cartelization as follows:

															"When we consider the injuries inflicted on United States
producers, we must again look at the Japanese television
manufacturers' export agreement as part of a generally collusive
scheme embracing the Japanese domestic market as well. This scheme
increased the supply of television receivers to the United States
market while restricting supply in the Japanese market. If Japanese
manufacturers had competed in both domestic and export markets,
they would have sold more in the domestic market and less in the
United States. A greater proportion of Japanese production capacity
would have been devoted to domestic sales. Domestic prices would
have been lower, and export prices would have been higher. The size
of the price differential between domestic and export markets would
have diminished practically to the vanishing point. Consequently,
competition among Japanese producers in both markets would have
resulted in reducing exports to the United States, and United
States prices would have risen. In addition, investment by the
United States industry would have increased. As it was, however,
the influx of sets at depressed prices cut the rates of return on
television receiver production facilities in the United States to
so low a level as to make such investment uneconomic."

															"We can therefore conclude that the American manufacturers of
television receivers would have made larger sales at higher prices
in the absence of the Japanese cartel agreements. Thus, the
collusive behavior of Japanese television manufacturers resulted in
a very severe injury to those American television manufacturers,
particularly to National Union Electric Corporation, which produced
a preponderance of television sets with screen sizes of nineteen
inches and lower, especially those in the lower range of
prices."

															5 App. to Brief for Appellants in No. 81-2331 (CA3), pp.
1629a-1630a.

															[ Footnote 2/3 ]

															The DePodwin Report has this, among other things, to say in
summarizing the harm to respondents caused by the five-company
rule, exchange of production data, price coordination, and other
allegedly anticompetitive practices of petitioners:

															"The impact of Japanese anticompetitive practices on United
States manufacturers is evident when one considers the nature of
competition. When a market is fully competitive, firms pit their
resources against one another in an attempt to secure the business
of individual customers. However, when firms collude, they violate
a basic tenet of competitive behavior, i.e., that they act
independently. United States firms were confronted with Japanese
competitors who collusively were seeking to destroy their
established customer relationships. Each Japanese company had
targeted customers which it could service with reasonable assurance
that its fellow Japanese cartel members would not become involved.
But, just as importantly, each Japanese firm would be assured that
what was already a low price level for Japanese television
receivers in the United States market would not be further
depressed by the actions of its Japanese associates."

															"The result was a phenomenal growth in exports, particularly to
the United States. Concurrently, Japanese manufacturers, and the
defendants in particular, made large investments in new plant and
equipment and expanded production capacity. It is obvious,
therefore, that the effect of the Japanese cartel's concerted
actions was to generate a larger volume of investment in the
Japanese television industry than would otherwise have been the
case. This added capacity both enabled and encouraged the Japanese
to penetrate the United States market more deeply than they would
have had they competed lawfully." Id. at 1628a-1629a.

															For a more complete statement of DePodwin's explanation of how
the alleged cartel operated and the harms it caused respondents, see id. at 1609a-1642a. This material is summarized in a
chart found id. at 1633a.

															[ Footnote 2/4 ]

															In holding that Parts IV and V of the Report had been improperly
excluded, the Court of Appeals said:

															"The trial court found that DePodwin did not use economic
expertise in reaching the opinion that the defendants participated
in a Japanese television cartel. 505 F. Supp. at 1342-46. We have
examined the excluded portions of Parts IV and V in light of the
admitted portions, and we conclude that this finding is clearly
erroneous. As a result, the court also held the opinions to be
unhelpful to the factfinder. What the court in effect did was to
eliminate all parts of the report in which the expert economist,
after describing the conditions in the respective markets, the
opportunities for collusion, the evidence pointing to collusion,
the terms of certain undisputed agreements, and the market
behavior, expressed the opinion that there was concert of action
consistent with plaintiffs' conspiracy theory. Considering the
complexity of the economic issues involved, it simply cannot be
said that such an opinion would not help the trier of fact to
understand the evidence or determine that fact in issue." In re Japanese Electronics Products Antitrust
Litigation, 723 F.2d 238, 280 (1983).

															The Court of Appeals had similar views about Parts VI and
VII.

															[ Footnote 2/5 ]

															I use the Third Circuit's analysis of the five-company rule by
way of example; the court did an equally careful analysis of the
parts the cartel activity in Japan and the check-prices could have
played in an actionable conspiracy. See generally id. at
303-311.

															In discussing the five-company rule, I do not mean to imply any
conclusion on the validity of petitioners' sovereign compulsion
defense. Since the Court does not reach this issue, I see no need
of my addressing it.

Summary: The U.S. Supreme Court case Matsushita v. Zenith Radio Corp. (1986) involved allegations of Japanese companies conspiring to drive American firms out of the consumer electronics market through price-fixing. The Court of Appeals found evidence of a conspiracy, but the Supreme Court disagreed, stating that proper standards for evaluating summary judgment were not applied. The case was decided based on the interpretation of evidence and economic analysis, with the Court of Appeals believing there was an actionable conspiracy and the Supreme Court disagreeing.