those increases to anyone, nor was he aware that any other sales representative had.
John Farrell testified that he was employed by Agfa from March 15, 1989, until he was fired in July 1992, as a territory manager for the western half of Missouri, Kansas, Nebraska, and a portion of Iowa. He was responsible for promoting sales of Agfa products, including medical x-ray film, through a dealer network as well as through direct sales to hospitals. Farrell identified Kodak, DuPont, and Fuji as Agfa's major competitors in the sale of medical x-ray film at that time.
Farrell testified that there was a general industry-wide price increase in medical x-ray film in January and February of 1990, 1991, and 1992 in which DuPont, Kodak, Fuji, and Agfa participated. According to Farrell, the price increases between the companies were very close in time and amount. He stated that he obtained advance notice in late October or early November prior to the increase of each of the three years that there would be general price increases in medical x-ray film by Kodak, DuPont, Fuji, and Agfa. He received the information through either telephone calls or by letter from Bob Eisen, his regional manager, who instructed Farrell to find out from his dealers or hospital contacts the details of the industry-wide price increase. Farrell then spoke with several dealers and hospitals who told him they had not been notified by any of the other companies concerning any type of price increase.
Farrell also testified that Mr. Eisen mailed to him written competitor information, including internal memoranda authored by Agfa's competitors and information on terms and conditions of sale offered by Agfa's competitors, such as DuPont, Fuji, and 3M, on more than one occasion during his employment with Agfa. Farrell was unaware of how Elsen obtained these documents. Farrell testified further that Eisen mentioned to him on several different occasions that he had contact with Agfa's competitors, such as Kodak, but Farrell could provide no details concerning these contacts or the specific subjects discussed.
Farrell testified that he had no knowledge of any meetings among competitors regarding prices, that he had never attended any such meetings with competitors nor did he have any knowledge of others having done so, and that he was not aware of any exchanges of future price information.
Gregory Gessert testified that he was employed by Fuji from July 1990 until he was discharged in June 1992, as a sales representative in Montana for Fuji's x-ray film division. He identified Fuji's competitors in the medical x-ray film industry as Kodak, DuPont, 3M, Konica, and Agfa. Gessert recalled that Fuji increased its list prices for medical x-ray film in January 1991 and January 1992. He was instructed generally to collect competitive information, including pricing, and to report what he obtained on a competitive information form.
Gessert testified further that he met with Ronald Bloomquist, a sales representative for Agfa, in December
at a Christmas party held by the Wisconsin Society of Radiological Technicians (WSRT), a district of the American Association of Radiological Technicians, and they exchanged pricing information. Specifically, Gessert provided a copy of a draft of the proposed Fuji price increases for 1992, and Bloomquist provided a memo Gessert believes notified distributors and dealers of an approximate percentage increase in Agfa film prices. Gessert faxed the draft he received to Tim Smalley, his supervisor, in Michigan.
Ronald Bloomquist testified that he was employed by Agfa from June 1989 until he was involuntarily terminated in November 1992, as a territory sales manager responsible for selling film and equipment to clinics in Wisconsin and parts of Northern Illinois. His supervisors were Robert Eisen and James Prelaske. He identified Kodak, DuPont, Fuji, and Konica as Agfa's competitors in the sale of x-ray film in the United States. He stated that in October 1989, 1990, and 1991, he was told by Eisen and Prelaske of a forthcoming price increase of five or six percent by either Kodak or DuPont, before it was formally announced, to be effective in January and February of each following year and that he should find out what he could about the competition.
Bloomquist testified that he attended Christmas parties in December 1989 and on December 13, 1990, held by WSRT, during which time he met with Gessert. On both occasions, the two discussed the industry price increase in medical x-ray film and the fact that each of their employers was announcing a price increase. Bloomquist specifically remembered that Gessert told him at the December 1990 meeting of Fuji's future price increase. In addition, during the 1990 meeting, Gessert provided Bloomquist with a Fuji internal memorandum addressed to Fuji's sales representatives preannouncing a future price percentage increase by Fuji.
Bloomquist was reluctant to provide Gessert with any documentation, but verbally relayed that Agfa was following the same direction as Fuji and contemplated a six-percent price increase. Bloomquist then telephoned Eisen with the information he had received from Gessert.
Defendants argue that the complaint should be dismissed pursuant to Rules 8, 9 and 12 of the Federal Rules of Civil Procedure. As an initial matter, the Court must determine whether to treat the instant motion as one to dismiss the complaint or as a motion for summary judgment in light of the discovery that has been had thus far in the case and the information outside of the pleadings that informs the motion at hand. Rule 12(c), provides that
if, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
This language, identical to that contained in Rule 12(b),
has been deemed mandatory, requiring a district court to convert a motion for dismissal into a motion for summary judgment the instant materials external to the pleadings are considered. See Carter v. Stanton, 405 U.S. 669, 671, 31 L. Ed. 2d 569, 92 S. Ct. 1232 (1972); see also American Fed'n of State, County & Mun. Employees, AFL-CIO v. Nassau County, 609 F. Supp. 695, 700 (E.D.N.Y. 1985).
As defendants point out, the Second Circuit has recognized that when a plaintiff "has actual notice of all the information in the movant's papers and has relied upon these documents in framing the complaint the necessity of translating a Rule 12 ... motion into one under Rule 56 is largely dissipated." Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991), cert. denied, 503 U.S. 960, 112 S. Ct. 1561, 118 L. Ed. 2d 208 (1992). While the Court considered treating the initial four depositions as integral to the complaint for the purposes of the renewed motion to dismiss, the Court, heeding defense counsel's suggestion, made clear on July 27, 1994, when it granted additional discovery, albeit circumscribed, that the continued motion would be converted to one for summary judgment. Cf. Capital Imaging Assoc., P.C. v. Mohawk Valley Medical Assoc., Inc., 996 F.2d 537, 539 (2d Cir.) (summary judgment motion considered after limited discovery permitted), cert. denied, 510 U.S. 947, 114 S. Ct. 388, 126 L. Ed. 2d 337 (1993). Moreover, even if evidence from the original four employee depositions was considered part of the pleadings, the additional discovery the Court permitted cannot be said to form the basis for the complaint since plaintiffs did not have access to the additionally discovered documents or witnesses before the complaint was filed.
Federal Rule of Civil Procedure 56(c) provides that summary judgment must be granted if there is no genuine issue as to any material fact and if the moving party is entitled to judgment as a matter of law. The moving party has the burden of demonstrating the absence of any disputed material facts, and the court must resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought. See Thompson v. Gjivoje, 896 F.2d 716, 720 (2d Cir. 1990).
The showing needed on summary judgment reflects the burden of proof in the underlying action. The court must consider "the actual quantum and quality of proof" demanded by the underlying cause of action and which party must present such proof. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Therefore, when the ultimate burden of proof is on the nonmoving party, the moving party meets his initial burden for summary judgment by "'showing' -- that is, pointing out to the district court -- that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). To survive the motion, the nonmoving party must then "make a showing sufficient to establish the existence of [the challenged] element essential to [that party's] case." Id. at 322. "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson, 477 U.S. at 247-48. Thus, summary judgment is appropriate "when the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986).
Defendants argue that plaintiffs have failed to state a legally cognizable claim for violation of the antitrust laws, thereby entitling defendants to judgment as a matter of law. Section 1 of the Sherman Act makes "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, . . . illegal." 15 U.S.C. § 1. In order to establish a claim under Section 1, a plaintiff must be able to show: (1) concerted action, (2) by two or more persons, (3) which unreasonably restrains interstate or foreign trade or commerce. See Oreck Corp. v. Whirlpool Corp., 639 F.2d 75, 78 (2d Cir. 1980), cert. denied, 454 U.S. 1083, 70 L. Ed. 2d 618, 102 S. Ct. 639 (1981); In re Nasdaq Market-Makers Antitrust Litig., 894 F. Supp. 703, 710 (S.D.N.Y. 1995); Telectronics Proprietary, Ltd. v. Medtronic, Inc., 687 F. Supp. 832, 837 (S.D.N.Y. 1988). Such concerted action or agreement unreasonably restrains trade if (1) a specific intent to create an unreasonable restraint of trade is found or (2) the restraint constitutes a per se violation of the statute. See Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 614, 97 L. Ed. 1277, 73 S. Ct. 872 (1953) (quoting United States v. Columbia Steel Co., 334 U.S. 495, 522, 92 L. Ed. 1533, 68 S. Ct. 1107 (1948)). Horizontal price fixing,
as alleged in the complaint, has been considered a per se violation of the statute. See Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 647, 64 L. Ed. 2d 580, 100 S. Ct. 1925 (1980); United States v. Container Corp. of Am., 393 U.S. 333, 337, 21 L. Ed. 2d 526, 89 S. Ct. 510 (1969) ("interference with the setting of price by free market forces is unlawful per se") (citing United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 224 n.59, 84 L. Ed. 1129, 60 S. Ct. 811 (1940)).
The specific elements necessary to prove a claim of horizontal price fixing, as set forth by the Supreme Court, are: (1) the existence of an agreement, combination or conspiracy, (2) among actual competitors, (3) with the purpose or effect of "raising, depressing, fixing, pegging, or stabilizing the price of a commodity," (4) in interstate or foreign commerce. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223-24, 84 L. Ed. 1129, 60 S. Ct. 811 (1940).
Defendants argue that plaintiffs have not presented a legally sufficient basis upon which to find the first element of a price fixing scheme, namely, a conspiracy or agreement. To establish this element, the evidence must show "a conscious commitment to a common scheme designed to achieve an unlawful objective." Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764, 79 L. Ed. 2d 775, 104 S. Ct. 1464 (1984); see also Minpeco, S.A. v. Conticommodity Serv., Inc., 673 F. Supp. 684, 688 (S.D.N.Y. 1987). In order to survive a motion for summary judgment, a plaintiff must produce direct or circumstantial evidence "that tends to exclude the possibility" that defendants acted independently of each other. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 597-98, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986) (citing Monsanto Co., 465 U.S. at 764); see also Capital Imaging, 996 F.2d at 545 ("to withstand defendants' summary judgment motion, plaintiffs must present evidence that casts doubt on inferences of independent (not combined) action or proper conduct by defendants.") (citing Matsushita, 475 U.S. at 588). The Supreme Court has further elaborated on this statement by noting that "conduct that is as consistent with permissible competition as with illegal conspiracy does not, without more, support even an inference of conspiracy." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. at 597 n.21 (1986).
The Supreme Court has, of course, recognized that a conspiracy or agreement to restrain trade in violation of the Sherman Act need not be express but can be inferred from the circumstances:
It is elementary that an unlawful conspiracy may be and often is formed without simultaneous action or agreement on the part of the conspirators. Acceptance by competitors, without previous agreement, of an invitation to participate in a plan, the necessary consequence of which, if carried out, is restraint on interstate commerce, is sufficient to establish an unlawful conspiracy under the Sherman Act.