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.
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.
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,
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.
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
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
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 ...