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. Plaintiff 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, 2004.
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,
citing 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.
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, 110 (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 Sherman Act
Theatre Enters., Inc. v. Paramount Film Distrib. Corp.,
346 U.S. 537
, 540-541 (1954) (internal citations omitted).
Because parallel activity may be equally suggestive of independent
conduct, plaintiffs offering parallel conduct as evidence of an antitrust
conspiracy must demonstrate additional circumstances, often referred to
as "plus factors," which provide a supplemental basis to infer a
conspiracy. See Apex Oil Co., 822 F.2d at 253. "Plus factors"
have been recognized to include (1) a common rational motive to conspire
(see Ambook Enters, v. Time Inc., 612 F.2d 604, 616 (2d Cir.
1979)); (2) a concentrated degree of inter-firm communications (see
Apex Oil Co., 822 F.2d at 254); (3) the performance of actions that
are against a defendant's own business interest without collective
involvement (see id.); (4) evidence of coercion (see Ambook
Enters., 612 F.2d at 616); and (5) market phenomena that may only be
attributed to concerted action (see Stephens, et al. v. CMC Health,
et al., 96 Civ. 7798, 1997 U.S. Dist. LEXIS 23797, at *19 n.13
(S.D.N.Y. July 22, 1997)