iPic-Gold Class Entertainment, LLC and iPic Texas, LLC v. Regal Entertainment Group, AMC Entertainment Holdings, Inc., AMC Entertainment, Inc., and American Multi-Cinema, Inc.
Opinion issued December 5, 2019
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-17-00805-CV
———————————
IPIC-GOLD CLASS ENTERTAINMENT, LLC AND IPIC TEXAS, LLC,
Appellants
V.
AMC ENTERTAINMENT HOLDINGS, INC., AMC ENTERTAINMENT,
INC., AND AMERICAN MULTI-CINEMA, INC., Appellees
On Appeal from the 234th District Court
Harris County, Texas
Trial Court Case No. 2015-68745
OPINION
This is an appeal from a summary judgment in an antitrust case. See TEX.
BUS. & COM. CODE § 15.05. In the underlying suit, iPic alleged that AMC and
Regal1 conspired with each other and with third parties to exclude them from
exhibiting popular films at two locations in Texas—Houston and Frisco. The trial
court granted a temporary restraining order in iPic’s favor, which this court
affirmed. See Regal Entm’t Grp. v. iPic-Gold Class Entm’t, LLC, 507 S.W.3d 337,
356 (Tex. App.—Houston [1st Dist.] 2016, no pet.) (iPic I). Regal settled with
iPic, leaving only AMC as a defendant.
AMC moved for summary judgment on no-evidence and traditional grounds.
AMC argued that its evidence conclusively disproved both the existence of a
conspiracy and damages caused by AMC’s actions. Without specifying the
grounds, the trial court granted final summary judgment in favor of AMC, and iPic
appealed.
On appeal, iPic asserts that: (1) the trial court erred by granting summary
judgment for AMC on iPic’s restraint of trade claim; (2) as a coconspirator, AMC
is jointly and severally liable for damages sustained by iPic Houston; (3) it
presented more than a scintilla of evidence that AMC and Regal engaged in an
illegal horizontal conspiracy; and (4) AMC did not conclusively prove the absence
1
We refer to appellants iPic-Gold Class Entertainment, LLC and iPic Texas, LLC
collectively as “iPic,” and we refer to appellees AMC Entertainment Holdings,
Inc., AMC Entertainment, Inc., and American Multi-Cinema, Inc. collectively as
“AMC.” “Regal” refers to Regal Entertainment Group, which was a defendant in
the underlying suit.
2
of conspiracy, and, alternatively, its responsive summary-judgment evidence raised
a genuine issue of material fact as to the existence of a conspiracy.
We reverse the trial court’s judgment, and we remand the case to the trial
court for further proceedings.
INTRODUCTION: THE FILM INDUSTRY AND ANTITRUST LAW
The film industry is comprised of three segments: producers, who make the
movies; distributors, who license them to movie theaters; and exhibitors, who play
the movies at theaters for movie-going audiences. AMC, Regal, and iPic are movie
exhibitors. AMC and Regal largely provide a traditional theater experience, and
iPic provides a premium experience that includes larger seating, as well as
enhanced food and beverage service.
Exhibitors do not purchase the films they show; rather, they license the right
to show them by competitive bidding or negotiation. See generally U.S. v.
Paramount Pictures, 334 U.S. 131, 154–55 (1948) (discussing bidding and
licensing); Note, Blind Bidding and the Motion Picture Industry, 92 Harv. L. Rev.
1128 (1979) (explaining business practices in the film industry). Exhibitors have
obtained exclusive or semi-exclusive licenses called “clearances.” See Paramount
Pictures, 334 U.S. at 145 & n.5. These exclusive licenses prevented other theaters
from playing the same movies at the same time, a practice called “day-and-date”
3
exhibition.2 See Theatre Enters., Inc. v. Paramount Film Distrib. Corp., 346 U.S.
537, 539 n.7 (1954).
Film industry licensing practices have given rise to numerous antitrust
lawsuits. E.g., Theatre Enters., 346 U.S. at 539; Paramount Pictures, 334 U.S. at
131; Regal Entm’t Grp. v. iPic-Gold Class Entm’t, LLC, 507 S.W.3d 337, 342
(Tex. App.—Houston [1st Dist.] 2016, no pet.); Cobb Theatres III, LLC v. AMC
Entm’t Holdings, Inc., 101 F. Supp. 3d 1319, 1330 (N.D. Ga. 2015); Theee Movies
of Tarzana v. Pac. Theatres, Inc., 828 F.2d 1395, 1398 (9th Cir. 1987); Paramount
Film Distrib. Corp. v. Applebaum, 217 F.2d 101, 124 (5th Cir. 1954).
Some cases challenge vertical restraints of trade like clearances, as when an
exhibitor plaintiff sues one or more distributors and one or more exhibitors.3 E.g.,
2
Movie exhibitors submit bids to movie distributors for the right, or
license, to exhibit particular movies. These bids usually include
certain proposed terms: the guaranteed minimum the theater will pay
the distributor regardless of the movie’s success, division of profits
between the exhibitor and distributor, the time period the movie will
show, and any clearances. Clearances preclude distributors from
licensing other theaters, either specifically named or encompassed in
a named geographic area, from showing a movie while it is being
exhibited by the theater whose bid is accepted. Distributors evaluate
these terms, and other factors, in determining which theaters they
will license to show particular movies.
Theee Movies of Tarzana v. Pac. Theatres, Inc., 828 F.2d 1395, 1397 (9th Cir.
1987).
3
“Agreements between entities at different market levels are termed ‘vertical
restraints.’” Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1368 (3d Cir.
1996) (citing U.S. v. Topco Assocs., Inc., 405 U.S. 596, 608 (1972)).
4
Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1366–68 (3d Cir. 1996); Theee
Movies, 828 F.2d at 1397. Like other vertical restraints of trade, clearances are
evaluated under the rule of reason, which requires the court to determine the
reasonableness of the restraint by balancing the restraint’s positive and negative
effects on competition. See Paramount Pictures, 334 U.S. at 145–46 (listing
competitive factors that could justify clearances as reasonable, and therefore legal,
restraints of trade); Theee Movies, 828 F.2d at 1397. “Clearances that are ‘unduly
extended as to area or duration,’ or granted over theatres ‘not in substantial
competition,’ may be unreasonable under section 1” of the Sherman Act. Harkins
Amusement Enters., Inc. v. Gen. Cinema Corp., 850 F.2d 477, 486 (9th Cir. 1988)
(quoting Paramount Pictures, 334 U.S. at 145–46).
Another type of antitrust claim involving the film industry alleges a group
boycott. E.g., Southway Theatres, Inc. v. Georgia Theatre Co., 672 F.2d 485, 487
(5th Cir. 1982) (“Southway alleged that the appellees—competing Atlanta theatre
chains and national film distributors—conspired to deprive Southway of the
opportunity to license first run films and sought to eliminate it from competition in
the licensing and exhibition of those films.”). A group boycott involves “concerted
action among other firms aimed at keeping the victim firms from competing.” Id.
at 492 n.6 (quoting L. SULLIVAN, HANDBOOK OF THE LAW OF ANTITRUST 231
(1977)). “‘Group boycotts’ are often listed among the classes of economic activity
5
that merit per se invalidation under § 1” of the Sherman Act. Nw. Wholesale
Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284, 293 (1985).
Although “not all group boycotts are predominantly anticompetitive,” when “firms
with market power boycott suppliers or customers for the purpose of discouraging
them from doing business with a competitor,” courts apply a rule of per se
illegality under antitrust laws. Marlin v. Robertson, 307 S.W.3d 418, 428 (Tex.
App.—San Antonio 2009, no pet.) (citing Nw. Wholesale Stationers, 472 U.S. at
293, then F.T.C. v. Ind. Fed’n of Dentists, 476 U.S. 447, 458 (1986)).
Still other antitrust claims arising from the film industry involve allegations
of “a practice known as ‘circuit dealing,’” which “occurs when a defendant pools
the purchasing power of an entire circuit” to prevent small exhibitors from bidding
for film licenses on a theater-by-theater basis. Cobb Theatres, 101 F. Supp. 3d at
1342; see also Cinetopia, LLC v. AMC Entm’t Holdings, Inc., 18-2222-CM-KGG,
2018 WL 6804776, at *1 (D. Kan. Dec. 27, 2018) (denying motion to dismiss
movie theater’s case that alleged AMC used dominant market position to obtain
exclusive licenses in violation of federal antitrust law). This practice has been
found unlawful as a misuse of monopoly power. Cobb Theatres, 101 F. Supp. 3d at
1342.
iPic’s case involves elements of each of the aforementioned types of
antitrust cases. iPic’s allegations submit that two major exhibitors, Regal and
6
AMC, used their combined dominant market positions—along with their
simultaneous communication of refusals to deal—to influence distributors to grant
clearances in their favor, thus restricting the licensing of movies to two startup iPic
locations in Texas. This case comes to us as an appeal from a final take-nothing
summary judgment. Because of this procedural posture, we express no opinion on
the merits of using this type of theory to allege antitrust violations in the film
industry. Our task here is limited by the motions filed in the trial court and limited
to determining whether the summary-judgment evidence raised a triable issue of
fact on the challenged elements of iPic’s claims.
FACTUAL BACKGROUND
Regal operated a theater in Houston (Regal Greenway), and AMC operated a
theater in Frisco (AMC Stonebriar). Regal and AMC learned that iPic planned to
build theaters in Houston and Frisco within about three miles of each exhibitor’s
existing theater. In July 2014, before either iPic Houston or iPic Frisco opened,
both Regal and AMC requested clearances of the proposed nearby iPic theaters.
Both Regal and AMC informed the major distributors that they would not license
first-run movies that were also licensed to the nearby iPic theaters.
7
In November 2015, iPic opened a theater in Houston within three miles of
Regal Greenway theater.4 Several distributors declined Regal’s request for
clearances, but they allocated movies between Regal Greenway and iPic Houston.
From November 2015 through January 2016, iPic Houston was limited in its
ability to license films to show at its theater. iPic contends that it lost money due to
this lost opportunity during the first few months of its operation in Houston.
In January 2016, iPic brought the underlying antitrust suit against Regal and
AMC. iPic alleged that Regal and AMC had worked together to exclude it from the
market in Houston and Frisco. iPic relied on the nearly simultaneous timing of the
statements from representatives of both Regal and AMC informing distributors that
they would not show movies that were also licensed to the nearby iPic theaters.
Notably, these communications occurred long before either iPic theater had
opened.
After Regal settled with iPic, AMC sought summary judgment on iPic’s
claims on no-evidence and traditional grounds. AMC challenged the evidence to
support the existence of a conspiracy and its causation of damages alleged by iPic.
AMC contended that it acted independently of Regal, and it could not be held
liable for monetary damages sought by iPic Houston because it only sought
clearances in Frisco. AMC’s summary-judgment evidence included deposition
4
The Frisco iPic had not yet opened when the trial court granted summary
judgment for AMC in this case.
8
transcripts from employees and officers of both AMC and Regal, all of whom
denied having conspired with or coordinated efforts regarding clearances of iPic
theaters. AMC also provided deposition transcripts from several distributors
denying that either request influenced any clearance decision as to the other city.
In response, iPic presented circumstantial evidence that AMC and Regal
engaged in parallel behavior and had the motive and opportunity to conspire,
including their involvement in “Open Road,” a joint-venture film distribution
company. iPic’s evidence included business documents, emails, and transcripts of
testimony from depositions and hearings. The trial court granted final take-nothing
summary judgment in favor of AMC.
ANALYSIS
On appeal, iPic challenges the trial court’s judgment on its restraint-of-trade
claim. iPic argues that it provided more than a scintilla of evidence of conspiracy
in response to the no-evidence motion for summary judgment. It also argues that
AMC did not conclusively negate the element of conspiracy, or alternatively, its
summary-judgment evidence created a genuine question of material fact raising a
triable issue on the existence of a conspiracy. Finally, responding to an argument
made in the trial court, iPic argues that, as a coconspirator, AMC was jointly and
severally liable for damages sustained by iPic Houston.
9
I. Summary judgment standards of review
A no-evidence motion for summary judgment is essentially a motion for a
pretrial directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex.
2006). A party may move for no-evidence summary judgment if, after adequate
time for discovery, there is no evidence of one or more essential elements of a
claim or defense on which the nonmovant would have the burden of proof at trial.
TEX. R. CIV. P. 166a(i). “The motion must state the elements as to which there is
no evidence.” Id. The trial court must grant the motion unless the non-movant
produces summary judgment evidence that raises a genuine issue of material fact.
Hahn v. Love, 321 S.W.3d 517, 524 (Tex. App.—Houston [1st Dist.] 2009, pet.
denied) (citing Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002)).
A movant for traditional summary judgment must establish that there is no
genuine issue of material fact and that the movant is entitled to judgment as a
matter of law. See TEX. R. CIV. P. 166a(c); Provident Life & Accident Ins. Co. v.
Knott, 128 S.W.3d 211, 215–16 (Tex. 2003). A defendant moving for traditional
summary judgment must conclusively negate at least one essential element of each
of the plaintiff’s causes of action or establish conclusively each element of an
affirmative defense. Henkel v. Norman, 441 S.W.3d 249, 251 (Tex. 2014) (per
curiam); Wendt v. Sheth, 556 S.W.3d 444, 448 (Tex. App.—Houston [1st Dist.]
2018, no pet.).
10
We review a trial court’s summary judgment de novo. Travelers Ins. Co. v.
Joachim, 315 S.W.3d 860, 862 (Tex. 2010); Mann Frankfort Stein & Lipp
Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). “We review the
evidence presented by the motion and response in the light most favorable to the
party against whom the summary judgment was rendered, crediting evidence
favorable to that party if reasonable jurors could and disregarding contrary
evidence unless reasonable jurors could not.” Mack Trucks, 206 S.W.3d at 582.
“Summary judgments are generally disfavored in antitrust cases, especially when
motive or intent is at issue.” Seven Gables Corp. v. Sterling Recreation Org. Co.,
C84-1057R, 1987 WL 56622, at *2 (W.D. Wash. June 25, 1987).
II. Texas Free Enterprise and Antitrust Act
The Texas Free Enterprise and Antitrust Act of 1983 (TFEAA) was enacted
to “maintain and promote economic competition in trade and commerce occurring
wholly or partly within the State of Texas and to provide the benefits of that
competition to consumers in the state.” TEX. BUS. & COM. CODE §§ 15.01, 15.04.
The TFEAA is construed to accomplish the expressly stated purpose “in harmony
with federal judicial interpretations of comparable federal antitrust statutes to the
extent consistent” with the statutory purpose. Id. § 15.04.
A plaintiff alleging a private cause of action for an antitrust violation must
have standing, which requires an allegation that the plaintiff’s injury was
11
proximately caused by the alleged antitrust violation. See In re Chocolate
Confectionary Antitrust Litig., 801 F.3d 383, 396 (3d Cir. 2015); see also TEX.
BUS. & COM. CODE § 15.21 (establishing private antitrust cause of action). The
substantive elements of an antitrust restraint-of-trade claim are: (1) the existence of
a contract, combination, or conspiracy and (2) a restraint that is (i) unreasonable
per se or (ii) unreasonable under the rule of reason, adversely affecting competition
in a particular market. See Nw. Power Prods., Inc. v. Omark Indus., Inc., 576 F.2d
83, 90 (5th Cir. 1978); see In re Mercedes-Benz Anti-Trust Litig., 157 F. Supp. 2d
355, 359 (D.N.J. 2001) (though “harm to competition in a particular market is the
gravamen of a Sherman Act violation,” per se violations are presumed to have a
“pernicious effect on competition” and no inquiry into the harm caused in the
relevant market is required).
Because Texas caselaw is limited, “we rely heavily on the jurisprudence of
the federal courts.” In re Mem’l Hermann Hosp. Sys., 464 S.W.3d 686, 708 (Tex.
2015) (orig. proceeding) (quoting Coca–Cola Co. v. Harmar Bottling Co., 218
S.W.3d 671, 688–89 (Tex. 2006)). Accord DeSantis v. Wackenhut Corp., 793
S.W.2d 670, 687 (Tex. 1990) (“Section 15.05 is comparable to, and indeed taken
from, section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 (1988). Accordingly,
12
we look to federal judicial interpretations of section 1 of the Sherman Act in
applying section 15.05(a) of our state antitrust law.”).5
III. Conspiracy
A. The law
Under the TFEAA “[e]very contract, combination, or conspiracy in restraint
of trade or commerce is unlawful.” TEX. BUS. & COM. CODE § 15.05(a). Section
15.05, like the Sherman Act, “does not prohibit [all] unreasonable restraints of
trade . . . only restraints effected by a contract, combination, or conspiracy.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 552 (2007) (quoting Copperweld Corp.
v. Indep. Tube Corp., 467 U.S. 752, 775 (1984)). “Independent action is not
proscribed.” Monsanto v. Spray-Rite Serv. Corp., 465 U.S. 752, 760 (1984) (“A
manufacturer of course generally has a right to deal, or refuse to deal, with
whomever it likes, as long as it does so independently.”); Valspar Corp. v. E.I. Du
Pont de Nemours & Co., 873 F.3d 185, 190–91 (3d Cir. 2017) (Sherman Act
prohibition on restraint of trade does not implicate “a single firm’s independent
action, no matter how anticompetitive its aim”).
Antitrust claims are resolved “on a case-by-case basis, focusing on the
‘particular facts disclosed by the record.’” Eastman Kodak Co. v. Image Tech.
5
The Sherman Act provides: “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, is declared to be illegal.” 15
U.S.C. § 1.
13
Servs., Inc., 504 U.S. 451, 467 (1992) (quoting Maple Flooring Mfrs. Ass’n v. U.S.,
268 U.S. 563, 579 (1925)). Since direct evidence is rarely available in antitrust
cases, see In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust
Litig., 906 F.2d 432, 439 (9th Cir. 1990), plaintiffs may rely on both direct and
circumstantial evidence. Monsanto, 465 U.S. at 764.
Parallel “business behavior is admissible circumstantial evidence from
which the fact finder may infer agreement.” Theatre Enters., 346 U.S. at 540.
Parallel behavior of defendants alone, however, is not conclusive evidence of the
existence of an anticompetitive horizontal combination. See Twombly, 550 U.S. at
553. Businesses in a concentrated market depend on one another regarding price
and output, and such interdependence or “conscious parallelism” is also not, by
itself, illegal. See id.; Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209, 227 (1993) (“Tacit collusion, sometimes called oligopolistic price
coordination or conscious parallelism, describes the process, not in itself unlawful,
by which firms in a concentrated market might in effect share monopoly power,
setting their prices at a profit-maximizing, supracompetitive level by recognizing
their shared economic interests and their interdependence with respect to price and
output decisions.”). “[C]onduct as consistent with permissible competition as with
illegal conspiracy does not, standing alone, support an inference of antitrust
conspiracy.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
14
574, 588 (1986). Although such parallel behavior is some circumstantial evidence
of conspiracy, it is not enough to survive a motion for summary judgment. See id.
“[A]t the summary judgment stage . . . a plaintiff’s offer of conspiracy
evidence must tend to rule out the possibility that the defendants were acting
independently.” Twombly, 550 U.S. at 553. “To survive a motion for summary
judgment or for a directed verdict, a plaintiff seeking damages for a violation of
§ 1 must present evidence ‘that tends to exclude the possibility’ that the alleged
conspirators acted independently.” Matsushita, 475 U.S. at 588 (quoting
Monsanto, 465 U.S. at 764). Courts refer to such evidence as “plus factors.” E.g.,
Chocolate Confectionary, 801 F.3d at 398 (3d Cir. 2015); Southway Theatres, 672
F.2d at 501. Plus factors “serve as proxies for direct evidence of an agreement,”
and they “ensure that courts punish ‘concerted action’—an actual agreement—
instead of the ‘unilateral, independent conduct of competitors.’” In re Flat Glass
Antitrust Litig., 385 F.3d 350, 360 (3d Cir. 2004) (quoting In re Baby Food
Antitrust Litig., 166 F.3d 112, 122 (3d Cir. 1999). No specific set of plus factors
must be considered in every case; rather they can include any factual circumstance
that unambiguously supports a conclusion of concerted action. In re Pool Prods.
Distrib. Mkt. Antitrust Litig., 988 F. Supp. 2d 696, 711–12 (E.D. La. 2013). See
15
Nickolai G. Levin, The Nomos and Narrative of Matsushita, 73 Fordham L. Rev.
1627, 1710 (2005).6
Courts and commentators have identified the following as plus factors that
may be relevant in an antitrust case: (1) evidence that the defendants had a motive
to enter into a horizontal conspiracy; (2) evidence that the defendant acted contrary
6
“Plus factor” is nothing more than an “inelegant” label for “the
additional facts or factors required to be proved as a prerequisite to
finding that parallel action amounts to a conspiracy.” VI Phillip E.
Areeda & Herbert Hovenkamp, ANTITRUST LAW: AN ANALYSIS OF
ANTITRUST PRINCIPLES AND THEIR APPLICATION P 1433(e) (2000).
Sometimes courts use the term “plus factor” explicitly to describe
this inquiry for the additional facts; other times, they merely look for
the additional facts. Recent lower court examples are: In re Flat
Glass Antitrust Litig., 385 F.3d 350 (3d Cir. 2004); Williamson Oil
Co. v. Philip Morris USA, 346 F.3d 1287 (11th Cir. 2003); Blomkest
Fertilizer, Inc. v. Potash Corp., 203 F.3d 1028, 1033 (8th Cir. 2000)
(en banc); Merck-Medco Managed Care, LLC v. Rite Aid Corp., No.
98-2847, 1999 WL 691840, at *9 (4th Cir. Sept. 7, 1999)
(unpublished); In re Baby Food Antitrust Litig., 166 F.3d 112, 122,
124 (3d Cir. 1999); and Todorov v. DCH Healthcare Auth., 921 F.2d
1438, 1456 n.30 (11th Cir. 1991). Pre-Matsushita examples include:
In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d 238, 304 (3d
Cir. 1983); Admiral Theatre Corp. v. Douglas Theatre Co., 585 F.2d
877, 884 (8th Cir. 1978); Nat’l Auto Brokers Corp. v. Gen. Motors
Corp., 572 F.2d 953, 1042–43 (2d Cir. 1978); Bogosian v. Gulf Oil
Corp., 561 F.2d 434, 446 (3d Cir. 1977); Venzie Corp. v. U.S.
Mineral Prods. Co., 521 F.2d 1309, 1314 (3d Cir. 1975); Del. Valley
Marine Supply Co. v. Am. Tobacco Co., 297 F.2d 199, 202–07 (3d
Cir. 1961); and C-O-Two Fire Equip. Co. v. U.S., 197 F.2d 489, 493
(9th Cir. 1952).
Nickolai G. Levin, The Nomos and Narrative of Matsushita, 73 Fordham L. Rev.
1627, 1633 n.32 (2005).
16
to its economic self-interest;7 (3) evidence implying a traditional conspiracy;8
(4) opportunity for the defendant to conspire or feasibility of carrying out a
conspiracy; (5) pretextual explanations for anticompetitive conduct; (6) sharing of
information such as pricing information; (7) signaling; and (8) involvement in
other controversies. Pool Prods., 988 F. Supp. 2d at 711–12; Flat Glass, 385 F.3d
at 360.
We consider a plaintiff’s evidence of contract, combination, or conspiracy as
a whole. See Cont’l Ore Co. v. Union Carbide, 370 U.S. 690, 699 (1962).
“[P]laintiffs should be given the full benefit of their proof without tightly
compartmentalizing the various factual components and wiping the slate clean
after scrutiny of each.” Id.; see U.S. v. Patten, 226 U.S. 525, 544 (1913) (“It hardly
needs statement that the character and effect of a conspiracy are not to be judged
by dismembering it and viewing its separate parts, but only by looking at it as a
whole.”).
7
One federal appellate court has held that an action contrary to a defendant’s
economic self-interest is one that it would not take absent “assurances from other
defendants that they would take the same action.” See City of Tuscaloosa v.
Harcros Chems., Inc., 158 F.3d 548, 571 & n.33 (11th Cir. 1998).
8
“Traditional evidence of conspiracy can include ‘overt acts more consistent with
some pre-arrangement for common action than with independently arrived-at
decisions.’” Deborah Heart & Lung Ctr. v. Penn Presbyterian Med. Ctr., CIV. 11-
1290 RMB KMW, 2012 WL 1390249, at *3 (D.N.J. Apr. 19, 2012).
17
B. iPic’s evidence
AMC’s summary-judgment evidence included deposition excerpts from
officers and employees of AMC and officers and employees of Regal. Each
testified that he or she had not communicated with individuals from the other
company about iPic or clearances.
In its motion for summary judgment, AMC argued that iPic could not
establish that AMC caused or influenced Regal’s decisions in Houston because
“uncontested evidence” established that Regal decided to seek clearance of iPic
Houston in April 2013, long before AMC learned anything about iPic Frisco. AMC
asserted that “undisputed evidence prove[d] that the distributors who chose to
license the films exclusively to Regal in Houston did so without regard to AMC.”
“A summary judgment may be based on uncontroverted testimonial
evidence of an interested witness, if the evidence is clear, positive and direct,
otherwise credible and free from contradictions and inconsistencies, and could
have been readily controverted.” TEX. R. CIV. P. 166a(c). The Supreme Court of
Texas has held that “could have been readily controverted” means that “testimony
at issue is of a nature which can be effectively countered by opposing evidence.”
Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989). “If the credibility of the
deponent is likely to be a dispositive factor in the resolution of the case, then
summary judgment is inappropriate.” Id.
18
AMC’s evidence that more than a dozen individuals who worked for AMC
and Regal during the relevant time period denied talking to anyone from the other
company about iPic or clearances is not capable of being effectively countered by
opposing evidence because the testimony did not refer to independently
ascertainable facts. And, even if the testimony was capable of being effectively
countered by opposing evidence, the credibility of these interested witnesses would
be a dispositive factor. Therefore, AMC did not meet its burden to conclusively
prove that there was no contract, combination, or conspiracy. Henkel, 441 S.W.3d
at 251; Wendt, 556 S.W.3d at 448.
Even if AMC had met its initial summary-judgment burden, iPic responded
with summary-judgment evidence in support of its allegation that AMC and Regal
conspired against iPic. As the plaintiff, iPic has the burden of proof at trial, at
which time it must prove that Regal and AMC combined or conspired together; it
is “not enough that a jury might disbelieve” AMC’s evidence. See Soodeen v.
Rychel, 802 S.W.2d 361, 365 (Tex. App.—Houston [1st Dist.] 1990, writ denied)
(citing Casso, 776 S.W.2d at 558).
Though iPic must prove more than just parallel behavior by AMC and
Regal, iPic’s summary-judgment evidence is relevant to several plus factors.
Summary-judgment evidence showed that clearances were not necessarily
profitable in the short run but could help the exhibitors avoid overall losses in the
19
long run. Thus, AMC was acting against its short-term economic interest by
seeking a clearance of the proposed iPic Frisco, and it was jointly motivated with
Regal to attempt to prevent iPic’s entry into the market.
Regal and AMC had the opportunity to conspire through the conduit of their
film distribution joint venture, Open Road. The summary-judgment evidence
demonstrated that there were direct communications between Open Road officers,
including individuals who also were the CEOs of Regal and AMC. Though AMC
asserted that the communications concerned other matters, it is evidence of the
existence of a communication channel that could enable the conspiracy.
In late 2012, AMC created a new corporate policy regarding when it would
seek clearances. A month later, AMC made a presentation to Open Road detailing
the clearance strategy.9 Two months later, prior to April 2013, Regal adopted the
same policy regarding when and where to seek clearances. An executive from
Regal informed an iPic executive that it planned to request clearances of iPic
Houston. The Regal executive later said he was simply communicating Regal’s
clearance strategy and notifying iPic that it would no longer consider whether a
nearby theater offered a dining format when making clearance decisions. This may
be considered a pretextual explanation for anticompetitive behavior. AMC
monitored Regal’s use of its clearance strategy by consultation with Open Road.
9
AMC made the same presentation to other distributors as well.
20
By June 2014, AMC was ready to request clearances of iPic’s proposed
Frisco theater. An email from one AMC employee to upper executives indicated
that he planned to make the clearance requests on July 1, 2014, unless a recipient
of the email directed him to wait. The next day, the recipient of the email met with
a top executive from Regal.10 AMC did not request clearances of the proposed iPic
Frisco theater on July 1, 2014. Instead, on July 8, 2014, AMC requested clearances
of the proposed iPic Frisco, and that same day, Regal requested clearances of the
proposed iPic Houston.
Examining iPic’s summary-judgment evidence as a whole,11 we conclude
that the circumstantial evidence supports plus factors of motive, opportunity,
actions against self-interest, a pretextual explanation for anticompetitive conduct,
the sharing of information through Open Road, and other facts consistent with the
existence of a traditional conspiracy. In this context, we conclude that, under both
10
The substance of the meeting is not disclosed in the summary-judgment evidence.
11
AMC asserted in its motion:
iPic cannot offer a single piece of evidence to connect Regal’s film
licensing decision in Houston—made in 2013—to AMC in any way.
iPic certainly cannot offer any evidence that some later purported
collusion with AMC regarding Frisco caused Regal to request the
clearances it had already decided to seek in Houston per Regal’s
standing policy.
To the extent that the reference to “no single piece of evidence” suggests
the need for smoking-gun evidence, AMC is mistaken. iPic is entitled to
rely on circumstantial evidence and to have all its circumstantial evidence
considered as a whole. See Cont’l Ore, 370 U.S. at 699.
21
the no-evidence and traditional summary-judgment standards, iPic’s evidence
raised a triable question of fact as to the existence of a conspiracy.
IV. Liability for damages caused by the conspiracy
In the trial court, AMC asserted that summary judgment was warranted
because there was no evidence that AMC caused iPic’s damages. AMC argued that
it could not have caused iPic’s damages because it sought clearance only of iPic
Frisco, and iPic’s damages were limited to those alleged by iPic Houston.
Under the TFEAA, a plaintiff must prove an “antitrust injury”—“injury of
the type the antitrust laws were intended to prevent.” Mem’l Hermann Hosp. Sys.,
464 S.W.3d at 705 & n.81 (quoting Brunswick Corp. v. Pueblo Bowl–O–Mat, Inc.,
429 U.S. 477, 489 (1977)); see Austin v. Blue Cross & Blue Shield of Ala., 903
F.2d 1385, 1389–90 (11th Cir. 1990) (“The antitrust injury concept . . . requires the
private antitrust plaintiff to show that his own injury coincides with the public
detriment tending to result from the alleged violation. This requirement increases
the likelihood that public and private enforcement of the antitrust laws will further
the same goal of increased competition.”) (quoting P. Areeda and H. Hovenkamp,
Antitrust Law, 335.1, at 261 (Supp. 1987)); A private antitrust plaintiff must also
prove an injury to its business or property; that is, the antitrust plaintiff must prove
that the antitrust violation caused its damages. See Mem’l Hermann Hosp. Sys.,
464 S.W.3d at 705; see also Ala. v. Blue Bird Body Co., Inc., 573 F.2d 309, 317
22
(5th Cir. 1978) (antitrust violation must cause injury to antitrust plaintiff). The
antitrust violation need not be “the sole cause of any alleged injury,” but it must be
“a material cause.” Blue Bird Body Co., 573 F.2d at 317.
“Antitrust coconspirators are jointly and severally liable for all damages
caused by the conspiracy to which they were a party.” Wilson P. Abraham Constr.
Corp. v. Tex. Indus., Inc., 604 F.2d 897, 904 n.15 (5th Cir. 1979), aff’d sub nom.
Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981); see also Akin v.
Dahl, 661 S.W.2d 917, 921 (Tex. 1983) (“However, once a civil conspiracy is
found, each co-conspirator is responsible for the action of any of the co-
conspirators which is in furtherance of the unlawful combination.”). “It is well-
settled law that upon joining a conspiracy, a defendant becomes a party to every
act previously or subsequently committed by any of the other conspirators in
pursuit of the conspiracy.” Greenberg Traurig of N.Y., P.C. v. Moody, 161 S.W.3d
56, 101 (Tex. App.—Houston [14th Dist.] 2004, no pet.).
iPic argues on appeal that, as a coconspirator, AMC was liable for Regal’s
actions in requesting clearances of iPic Houston. iPic’s summary judgment
evidence included its damages model, which was some evidence of the damages it
contends were caused by the alleged conspiracy. As coconspirators, AMC and
Regal would each be liable for the actions taken by the other in furtherance of the
alleged conspiracy. See id.
23
AMC argues that iPic was required to show that the harm to iPic Houston
would not have occurred but for the alleged conspiracy, and that Regal would have
independently requested a clearance of iPic Houston regardless of the existence of
any alleged conspiracy. AMC also argues that its alleged participation in a
conspiracy with Regal was irrelevant because several distributors testified or
averred that they made their decisions regarding licensing to Regal independently
of AMC’s clearance requests. These are arguments about whether Regal acted
independently or in furtherance of a conspiracy with AMC.
We have already concluded that the plus factor evidence created a triable
question of fact on the question of conspiracy. We likewise conclude that the
summary judgment evidence created a triable question of fact about causation.
Conclusion
Having concluded that genuine issues of material fact exist as to conspiracy,
we sustain iPic’s issues, reverse the summary judgment, and remand the case to the
trial court.
Peter Kelly
Justice
Panel consists of Justices Lloyd, Kelly, and Hightower.
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