The Second Circuit has affirmed a grant of summary judgment in favor of Dechert client Curtis Circulation Company, the nation’s largest national distributor of single-copy magazines, and several other media-related defendants in a nearly decade-old case alleging an unlawful conspiracy in the magazine industry.
Plaintiff Anderson News was one of the nation’s largest magazine wholesalers. In January 2009, it announced it would charge publishers a surcharge for each magazine delivered to retailers, and that it would it would refuse to ship magazines after February 1, 2009, for any publishers that did not agree to this demand. Ultimately, almost all publishers refused to pay the surcharge, and many stopped shipping magazines to Anderson. Shortly thereafter, Anderson ceased operations.
In March 2009, Anderson filed a complaint in U.S. District Court for the Southern District of New York against a number of publishers, distributors, and other wholesalers, including Curtis. The core allegation was that the defendants had engaged in an unlawful group boycott under Section 1 of the Sherman Act. Initially, the district judge granted defendants’ motion to dismiss Anderson’s claims. The Second Circuit reversed, holding that Anderson’s allegations were “sufficient to suggest that the cessation of shipments to Anderson resulted not from isolated parent-subsidiary agreements but rather from a lattice-work of horizontal and vertical agreements to boycott Anderson.”
After two years of discovery, the district court granted summary judgment in favor of the defendants, again concluding that the alleged conspiracy was implausible. The district judge explained that it had been Anderson’s “own ill-conceived and badly executed plan [that] led to its downfall.”
In a 3-0 decision, the Second Circuit affirmed, holding that Anderson had failed to offer sufficient evidence of its alleged conspiracy to survive summary judgment. The court observed that Anderson offered evidence that was consistent with the alleged conspiracy, but emphasized that, under the Supreme Court’s decision in Matsushita, such evidence was not enough to survive summary judgment because the defendants’ conduct was just as consistent with unilateral action.
The Dechert team was led by partner George Gordon (Picture).
Involved fees earner: George Gordon – Dechert;
Law Firms: Dechert;
Clients: Curtis Circulation Company;