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March 23, 2004.

CAROLYN FEARS, et al., Plaintiffs

The opinion of the court was delivered by: HAROLD BAER, JR., District Judge


Defendants, Ford Models, Inc. ("Ford"), Mr. Gerald W. Ford ("G. Ford"), Que Management, Inc. ("Que"), Wilhelmina Models, Inc. ("Wilhelmina"),*fn1 Elite Model Management Corp. ("Elite"), Next Management Co. ("Next"), IMG Models, Inc. ("IMG"), Click Model Management, Inc. ("Click"), Images Management ("Images"), and Model Management Corp. ("MMC") f/k/a International Model Managers Association, Inc. ("IMMA"), (collectively "moving defendants"),*fn2 all of whom are New York model management companies (and one modeling association), move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Fed.R. Civ. P."), dismissing the lawsuit brought by plaintiffs, a class of models who now work or have worked at some point over the past three decades for one or more of the defendant modeling management companies. Plaintiffs oppose defendants' motions for summary judgment. For the foregoing reasons, defendants' motions are granted-in-part and denied-in-part.


 A. Procedural History

  Plaintiffs filed their first complaint in their action on June 25, 2002, an amended complaint on August 12, 2002, and a first consolidated complaint on September 24, 2002. Defendants moved to dismiss the first consolidated complaint and fully-briefed motions were submitted in November 2002. In an Opinion and Order dated January 17, 2003, this Court dismissed plaintiffs' Article 11 cause of action and the antitrust claims beyond the statute of limitations, i.e., prior to June 25, 1998. Page 2 Plaintiffs filed a second amended complaint on February 5, 2003 and a third amended complaint on April 30, 2003. The moving defendants submitted their fully-briefed summary judgment motions on January 15, 2004. Oral argument on the summary judgment motions was held on March 9, 2004.

 B. Factual Background

  Plaintiffs allege that defendants, through their membership in or association with others who were or had been members of the modeling industry's trade association, IMMA (now called MMC), had the opportunity to — and indeed did — fix prices (of both models' commissions and clients' service fees), terms and conditions of models' employment, and the manner in which to structure their businesses (as management companies rather than employment agencies).

  Plaintiffs assert that defendants' price-fixing conspiracy originated with "an intention and plan collectively to evade the licensing requirements and fee restrictions imposed by New York state law [General Business Law ("GBL") §§ 170-90 (1998) ("Article 11")]." Plaintiffs' Opposition ("Pl. Opp.") at 8. Plaintiffs argue that by claiming "that they were each entitled to the `incidental booking' exception (licensure required if more than incidentally involved in procuring work for clients), defendants gained exemption from the licensure and 10% fee restriction under GBL Article 11." Pl. Opp. at 8. By way of background, "Article 11 requires employment agencies to be licensed and places restrictions [caps of ten percent] on the amount of commissions they may charge." Masters, et al. v. Wilhelmina Model Agency, Inc., et al., 02 Civ. 4911, 2003 U.S. Dist. LEXIS 698, at *8 (S.D.N.Y. Jan. 16, 2003) (emphasis added). Under plaintiffs' theory, collusion provided support and credibility for defendants' transformation — i.e., it was more believable that Ford — the first agency to undergo the change — was now legitimately a management company if Elite and Wilhelmina were simultaneously undergoing the same transformation. And, plaintiffs would not bolt against a particular agency that raised its commission, became a management agency, or adopted unfavorable terms and conditions if all of the major New York agencies acted together.

  Plaintiffs' theory is that defendants agreed upon uniform practices on several fronts — all with the motive to quash competition and preclude objection or dissent. Page 3


 A. Summary Judgment Standard

  Pursuant to Fed.R.Civ.P. 56(c), a district court must grant summary judgment if the evidence demonstrates that "there is no genuine issue as to any material fact and [that] the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby Inc., 477 U.S. 242, 250 (1986). "Summary judgment is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to `secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986), quoting Fed.R.Civ.P. 1. The Court's role at the summary judgment stage is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249. Rule 56(c) requires a Court to enter summary judgment when, "after adequate time for discovery . . . a party [ ] fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322.

  In antitrust cases, the non-moving party must set forth "evidence that tends to exclude the possibility that the [movants] were acting independently." Apex Oil Co. v. Dimauro, et al., 822 F.2d 246, 253 (2d Cir. 1987) (reversing district court's grant of summary judgment as to certain defendants), citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986). To prevail, plaintiffs "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 [plaintiffs]." Matsushita, 475 U.S. at 588, ching First Nat'l Bank of Arizona v. Cities Service Co., 391 U.S. 253, 280 (1968). "[W]hile some assessing of evidence is necessary in order to determine rationally what inferences are reasonable and therefore permissible, it is evident that the question of what weight should be assigned to competing permissible inferences remains within the province of the fact-finder at a trial." Apex Oil Co., 822 F.2d at 253 (citations omitted).

  The Court's requirement in Matsushita that the plaintiffs' claims make economic sense did not introduce a special burden on plaintiffs facing summary judgment in antitrust cases. The Court did not hold that if the moving party enunciates any economic theory supporting its behavior, regardless of its accuracy in reflecting the actual market, it is entitled to summary judgment. Matsushita demands only that the nonmoving party's inferences be reasonable in order to reach the jury, a requirement Page 4 that was not invented, but merely articulated, in that decision.

 Eastman Kodak Co. v. Image Technical Servs., 504 U.S. 451, 468 (1992). Therefore, while the inferences that may be drawn from ambiguous evidence in antitrust cases may be limited, "[n]o special burden is imposed on a plaintiff opposing summary judgment in an antitrust case." Virgin Atlantic Airways Ltd. v. British Airways PLC, 257 F.3d 256, 262 (2d Cir. 2001) (citations omitted). "[A]t a minimum, . .' the circumstances [must be] such as to warrant a jury in finding that the conspirators had a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement.'" Int'l Distribution Cntrs., Inc. v. Walsh Trucking Co., 812 F.2d 786, 793 (2d Cir. 1987), quoting Michelman v. Clark-Schwebel Fiber Glass Corp., 534 F.2d 1036, 1043 (2d Cir. 1976).

 B. Section One Violations

  Section One of the Sherman Act ("Section One"), 15 U.S.C. § 1, prohibits "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States . . ." In order to establish a Section One violation, a plaintiff must sufficiently demonstrate "(1) a combination or some form of concerted action between at least two legally distinct economic entities; and [that] (2) such combination or conduct constituted an unreasonable restraint of trade either per se or under the rule of reason." Dresses For Less, Inc., et al. v. CIT Group/Commercial Servs., Inc., et al, 01 Civ. 2669, 2002 U.S. Dist. LEXIS 18338, at *17 (S.D.N.Y. Sept. 30, 2002), quoting Virgin Atlantic Airways Ltd., 257 F.3d at 273.

  In analyzing claims under Section One, the Court may entertain both direct and circumstantial evidence. Direct evidence is "evidence that is explicit and requires no inferences to establish the proposition or conclusion being asserted." In re Baby Food Litig., 166 F.3d 112, 118 (3d Cir. 1999). "Illegal conspiracies, of course, can rarely be proved through evidence of explicit agreement, but must generally be proved through inferences from the conduct of the alleged conspirators." Venture Tech., Inc. v. Nat'l Fuel Gas Co., et al., 685 F.2d 41, 45 (2d Cir. 1982) (citations omitted). Circumstantial evidence provides the material for such inferences and encompasses "everything else including ambiguous statements." In re High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651, 662 (7th Cir. 2002).

  When the alleged scheme is implausible, such as a price cutting agreement, "a conspiracy must be proved by strong direct or strong circumstantial evidence, and the implausibility of a Page 5 scheme will reduce the range of inferences that may permissibly be drawn from ambiguous evidence." Apex Oil Co., 822 F.2d at 253, citing Matsushita, 475 U.S. at 594-598. Further, while schemes that involve long-term complex relationships among competitors are more susceptible to direct proof, short-term simple schemes are less apt to involve express agreements. See Apex Oil Co., 822 F.2d at 253 (citation omitted).

  While parallel conduct*fn3 may be probative of an antitrust conspiracy, it does not alone establish a conspiracy, even if the alleged conspirators "knew the other defendant companies were doing likewise." Modern Home Institute, Inc. v. Hartford Accident & Indemnity Co., 513 F.2d 102, 102(2d Cir. 1975).

To be sure, business behavior is admissible circumstantial evidence from which the fact finder may infer agreement. But this Court has never held that proof of parallel business behavior conclusively establishes agreement or, phrased differently, that such behavior itself constitutes a Sherman Act offense. Circumstantial evidence of consciously parallel behavior may have made heavy inroads into the traditional judicial attitude toward conspiracy; but `conscious parallelism' has not yet read conspiracy out of the ...

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