Thursday, February 25, 2021
In cases that allege price fixing or other per se violations of Section 1 of the Sherman Act, courts usually begin their opinions by saying there is no direct evidence of agreement—evidence like a “recorded phone call” that is “explicit and requires no inferences to establish” that the necessary direct communications occurred. Only at that point do the courts turn to the sufficiency of the inferences of agreement from circumstantial evidence. Courts highlight the absence of direct evidence of agreement in this way because of its special role on motions to dismiss or for summary judgment, when courts do not consider weight or credibility. Direct evidence is rare in per se cases because conspirators will try hard not to create any. Plaintiffs usually need discovery from the defendants to have a chance of finding any direct evidence, and they usually don’t despite their best efforts. When plaintiffs argue they have found direct evidence, the courts usually disagree because the evidence is too ambiguous and requires multiple inferences to prove anything.
But courts sometimes do find plaintiffs produced or pleaded direct evidence of agreement. A close look at this diverse set of cases, I argue, helps explain what courts mean by a Section 1 agreement and how they expect plaintiffs to prove that one exists. I begin by considering the relationships among the concepts of direct evidence, agreement, and sufficiency. I then show that courts place evidence on the spectrum of direct and circumstantial based on how completely and clearly it represents the alleged agreement. That choice affects the analysis of sufficiency of the evidence on motions for summary judgment and motions to dismiss. I then examine decisions in each of the categories of evidence that courts have characterized as direct—documents, recordings, testimony, and admissions. Finally, I argue that, even when direct evidence is not present, the courts’ applications of the concept of direct evidence can provide a measure of the sufficiency of circumstantial evidence of communications as a decisive plus factor in the proof of agreement. Circumstantial evidence becomes, as some courts have said, a proxy for direct evidence.