Evergreen Partnering Group v. Pactiv Corporation

United States Court of Appeals
For the First Circuit

No. 12-1730

EVERGREEN PARTNERING GROUP, INC.,

Plaintiff, Appellant,

------

MICHAEL FORREST,

Plaintiff,

v.

PACTIV CORPORATION; GENPAK, LLC, a/k/a Genpack, LLC;
SOLO CUP COMPANY, a corporation; DOLCO PACKAGING, a
Tekni-Plex Company, a corporation; DART CONTAINER CORPORATION;
AMERICAN CHEMISTRY COUNCIL, INCORPORATED, an association,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Torruella, Stahl and Thompson,
Circuit Judges.

Maxwell M. Blecher, with whom Donald R. Pepperman, Jordan L.
Ludwig, Blecher & Collins, P.C., Christopher A. Kenney, Eric B.
Goldberg, and Kenney & Sams, P.C., was on brief for appellant.
Steven M. Cowley, with whom Richard J. McCarthy, Kristy S.
Morgan, and Edwards Wildman Palmer LLP, was on consolidated brief
for appellee Dolco Packaging.
Richard A. Sawin, Jr., with whom Richard E. Bennett, and
Michienzie & Sawin LLC, was on consolidated brief for appellee
Pactiv Corporation.
David A. Martland, with whom Kathleen Ceglarski Burns and
Nixon Peabody LLP, was on consolidated brief for appellee Genpak,
LLC.
Scott M. Mendel, with whom Jennifer J. Nagle, and K&L Gates
LLP, was on consolidated brief for Solo Cup Company.
Sean M. Becker, with whom Yousri H. Omar, Vinson & Elkins LLP,
John M. Faust, and Law Office of John M. Faust, PLLC, was on
consolidated brief for appellee Dart Container Corporation.
Ralph T. Lepore, III, with whom Michael T. Maroney,
Benjamin M. McGovern, and Holland & Knight LLP, was on consolidated
brief for appellee American Chemistry Council, Incorporated.

June 19, 2013

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 TORRUELLA, Circuit Judge. Plaintiff Evergreen Partnering

Group, Inc. ("Evergreen") appeals from a judgment of the United

States District Court for the District of Massachusetts dismissing

its Second Amended Complaint ("complaint"). The complaint alleges

that defendants-appellees, polystyrene food service packaging

manufacturers and two trade associations, refused in concert to

deal with Evergreen in a recycling business method for polystyrene

food service products. Evergreen also appeals the district court's

refusal to grant it leave to amend its complaint. After careful

consideration, we vacate the judgment of dismissal and remand for

further proceedings.

I. Background

The following facts are alleged in Evergreen's complaint.

For the purposes of our review, we accept as true all well-pled

facts alleged in the complaint and draw all reasonable inferences

in Evergreen's favor. Santiago v. Puerto Rico, 655 F.3d 61, 72

(1st Cir. 2011).

A. The Parties

All parties in this case are involved in the multi-

billion-dollar industry of disposable plastics, and specifically,

the manufacture and sale of food service products made from

expanded polystyrene ("polystyrene").

Evergreen, founded in 2002 by Michael Forrest

("Forrest"), is the first company to develop a business model to

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recycle polystyrene products by using a post-consumer polystyrene

resin ("PC-PSR") to create trademark products known as "Poly-Sty-

Recycle." Polystyrene food service products must be "food-grade"

as deemed by the Food and Drug Administration ("FDA"), and

Evergreen's Poly-Sty-Recycle was the first recycled polystyrene

product to be so deemed.

Evergreen's business model involved a tripartite "closed-

loop process" wherein Evergreen (1) physically collected used

certified food-grade polystyrene products from large school

systems; (2) processed them into PC-PSR; and (3) used the PC-PSR to

manufacture new products for use again in the same school systems

and in other polystyrene products. Under this scheme, Evergreen

would derive revenue from three sources. First, it would collect

royalties from producers of the Poly-Sty-Recycle products based on

the total number of its polystyrene products of similar quality

sold to consumers each year. Second, it would sell its PC-PSR to

manufacturers benchmarked at prime pricing of food-grade resin.

Third, it would draw an "environmental fee" from schools or other

institutions implementing the process which would be "specifically

structured to be merely a percentage of the cost-savings each

school achieved by virtue of its participation in the closed-loop

program."

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 The five polystyrene producer defendants -- Pactiv

Corporation ("Pactiv"), Genpak, LLC ("Genpak"),1 Dart Container

Corporation ("Dart"), Dolco Packaging, a Tekni-Plex Company

("Dolco"), and Solo Cup Company ("Solo") -- are alleged to control

an estimated 90 percent of the market for single-service

polystyrene food service packaging and tableware. According to the

complaint, that market is divided such that each of the five

companies has control over its respective product division: Pactiv

controls over 70 percent of the foam lunch tray market for large

school systems and food management companies; Genpak controls over

70 percent of the foam lunch tray market for small to medium

schools; Dart controls over 70 percent of the market for injected

foam hot and cold cups; Dolco controls over 70 percent of the

market for egg foam cartons; and Solo controls over 70 percent of

the market for foam cups. The market for these foamed products is

claimed to generate an estimated $4.5 billion in annual sales in

the United States.

Defendant American Chemistry Council ("ACC") is a trade

association that engages in advocacy, trade and lobbying for the

chemical and plastic industry. The Plastics Food Service Packaging

1
Defendant Genpak argues that Evergreen's claims against it are
barred by a liability release. However, we decline to consider
this issue as the district court did not analyze the question in
detail, concluding that Evergreen's § 1 claim against Genpak were
insufficiently pled in any case. We therefore think it prudent to
allow the district court to consider the issue anew on remand. See
Plymouth Sav. Bank v. I.R.S., 187 F.3d 203, 209 (1st Cir. 1999).

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Group ("PFPG") is a business group within the ACC consisting of

companies that manufacture food service packaging made from

polystyrene, supply polystyrene resin for the production of

polystyrene food service packaging, or both. Its stated purpose is

to "create[] programs to educate the public about the importance

and benefits of polystyrene foodservice [sic] packaging." The five

polystyrene producer defendants are members of the PFPG.

B. The Single-Service Polystyrene Food Service Product Industry

While there are many buyers of polystyrene products,

among the most significant consumers of single-service food-grade

polystyrene products are "primary and secondary schools and other

institutional cafeterias, such as those in hospitals, prisons, and

state or federal buildings." Along with the purchasing costs,

consumers of these products must absorb high disposal costs

resulting from the bulky nature of polystyrene waste and the high

volume of material that must be transported to appropriate waste

facilities.

The complaint paints a picture of the polystyrene

industry increasingly coming under criticism from environmental

advocacy groups, local governments, and dissatisfied customers

prior to and during the period of the alleged conduct. Past

efforts to make polystyrene products more environmentally friendly

resulted in failure, and the producer defendants have maintained

that their products are non-recyclable because production of

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recyclable polystyrene is not economically feasible. This has

resulted in movements to ban polystyrene products -- including

city-wide bans in 30 California cities -- as well as to discourage

their use through implementing producer-responsibility mandates and

product surcharges.

C. The Alleged Conspiracy

Evergreen's complaint states that it developed its

business method in late 2002 to simultaneously reduce costs for

institutional consumers and to provide an environmentally-friendly

alternative to non-recyclable polystyrene. It further details a

number of partnerships and successful business ventures prior to

any alleged agreement between the defendants. Among these, the

complaint alleges pilot programs with the Boston Public School

System beginning in the 2002-2003 school year, and with the

Providence Public School System in Rhode Island and Sodexo, Inc.

("Sodexo"), a food services management corporation, in 2003.

Commodore Manufacturing ("Commodore"), a small firm, provided the

closed-loop recycled trays for the Providence schools, and the

program was extremely successful, as it diverted approximately 90

percent of polysytrene trays from the waste stream. While

Commodore's production capacity was adequate for the Providence

schools, it was not adequate to meet the national needs of Sodexo's

other, larger clients. Thus, even though Evergreen and Sodexo

agreed on a contract to test the market for Evergreen's business

-7-
plan at its school system clients in late 2004, Evergreen lacked

the production capacity to service all of them. Nevertheless, the

complaint states that the pilot programs were a success, and

Evergreen expanded to process polystyrene material from the

Gwinnett and DeKalb County Public School Systems in Georgia, the

nation's nineteenth and twenty-first largest school systems,

respectively.

As Evergreen expanded, it estimated that it would be able

to produce over 9 to 10 million pounds of PC-PSR annually, which

would be enough to supply its products to the ten largest school

systems as well as to manufacture over $100 million worth of

additional Poly-Sty-Recycle products. Yet, the demand of bulk

consumers -- large school systems, fast-food operators,

supermarkets and institutional cafeterias -- was so high that the

success of Evergreen's business model became "predicated on the

participation of any one of the producer defendants." This is

because, according to the complaint, only those defendants had the

production capacity "to meet the demands of the bulk consumers of

polystyrene products required" by the Evergreen model. Since these

producer defendants had allegedly obtained monopoly-level market

shares within their respective product divisions, no smaller

producer of polystyrene products could meet the national demand of

the bulk consumers.

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 In 2005, one of the producer defendants -- Dolco --

demonstrated interest in working with Evergreen. After receiving

a proposal from Evergreen, Norm Patterson ("Patterson"), Dolco's

Executive Vice President, expressed his "strong support" for

Evergreen in an email and stated that Dolco was willing to partner

with it in a closed-loop recycling program. Specifically,

Patterson stated that "the magnitude of the opportunity is

enormous," and that Dolco was both looking forward to the results

from the Gwinnett County School System program and "anxious to be

involved in wherever this product takes us."

However, in or about late 2005 or 2006, the PFPG met to

address criticisms of the polystyrene industry, and at that

meeting, the complaint alleges, John McGrath of Pactiv announced to

PFPG members that recycling polystyrene products was not an option

in the industry's battles with polystyrene's critics. A

representative from Dart agreed. The two companies pay a major

percentage of PFPG's yearly dues and are alleged to have used their

dominant market position and their PFPG group funding influence to

prevent other polystyrene food service product manufacturers from

"embracing the recycling of polystyrene products, and thereby

forcing Evergreen from the market."

The complaint alleges that, following the meeting, the

named defendants "combined and conspired to unreasonably restrain

trade and commerce in the market for single[-]service polystyrene

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food service products by refusing in concert to deal with Evergreen

in a sole-source closed-loop recycling business method for

polystyrene food service products" until at least 2009. The

purpose of the concerted refusal to deal was to

ensure that polystyrene products will remain
non-recyclable and without post-consumer
content recycled material so that the
Defendants' existing market shares will not be
disrupted, the status quo will be maintained,
and the Defendants will be able to offer
higher-priced products such as paper, pulp,
bio-plastics, R-PET, PLA, ceramic, bamboo, and
others, without any low cost options for
consumers.

The complaint contains the following examples of defendants'

concerted refusal to deal.

First, shortly after the PFPG meeting, Patterson from

Dolco spoke with Forrest over the telephone and broke off Dolco's

agreement with Evergreen to implement its recycling program for

polystyrene school lunch trays as well as to produce a full-line of

Poly-Sty-Recycle products for Sodexo, Sysco, and other large

national distributors. Dolco said it would purchase PC-PSR as

scrap under an exclusive agreement for use in egg cartons, but it

would not promote the use of PC-PSR, pay royalties, or make claims

on the use of post-consumer recycled material that was linked to

school recycling programs to any Dolco customers, especially Wal-

Mart. When Evergreen's counsel questioned Patterson on the matter,

Patterson indicated that "he would only respond to questions if

subpoenaed." Patterson did state, however, that Dolco had no

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interest in competing against Pactiv or Genpak in the school tray

market.

Additionally, from 2006 through 2008, Genpak's President,

Jim Reilly, told Evergreen that "Genpak had no interest in

competing against Pactiv" in large schools, despite receiving

specific requests for Evergreen's closed-loop recycling program

from distributors and large school systems in the Southeast and

despite being offered an exclusive agreement with Evergreen to use

PC-PSR in school lunch trays. Reilly indicated that "he would

embrace Evergreen's closed-loop program only if another PFPG member

agreed to be involved as well."

Solo is alleged to have conspired in refusing to deal

with Evergreen after it was asked by Eastern Bag & Paper to supply

it with Poly-Sty-Recycle products in Massachusetts, and even though

it had successfully tested 15,000 pounds of Evergreen's PC-PSR.

Solo's President and CEO, Bob Korenski, told the President of

Eastern Bag & Paper that "he had been told by his people not to

work with Evergreen or Michael Forrest."

The alleged boycott continued in 2007, even though the

Gwinnett County Public School system was awarded the National

Recycling Award for K-12 schools in that year. Specifically,

Pactiv interfered with Evergreen's attempt to provide the Chicago

Public Schools with Poly-Sty-Recycle products through Compass and

Sodexo. Since Pactiv refused to provide and would not use PC-PSR

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with U.S. Foods, The Performance Group and Eastern Bag & Paper --

all distributors for Compass -- the closed-loop model could not get

off the ground. Pactiv is further alleged to have falsely

represented to Compass that polystyrene recycling was not

economically feasible and to have induced Sodexo to cancel its

contract with Evergreen through (1) "refus[ing] to provide Poly-

Sty-Recycle products to Sysco Corporation (an extremely large

distributor that Sodexo employs) and Eastern Bag & Paper"; (2)

threatening to revoke Sodexo's Vendor Distribution Allowances,

which constitute a significant portion of Sodexo's revenues; and

(3) misrepresenting that polystyrene recycling was not economically

feasible. Pactiv continued to refuse to work with Evergreen after

Sysco's purchasing director, Maurice Malone, and Eastern Bag &

Paper owner Meredith Reuben asked Pactiv to reconsider.

During the same period, while Evergreen was able to

procure an agreement with Southeastern Paper Group, a distribution

company, to service Florida, Georgia, South Carolina and North

Carolina schools, Pactiv and Genpak refused to work with

Southeastern Paper Group or implement Evergreen's closed-loop

method. Dolco, Dart and Solo refused to compete with Pactiv and

Genpak as dominant producers of polystyrene in the tray market. In

late 2007, in Pasco County, Florida, where Evergreen had a pilot

program, Genpak converted the school system's white trays to black

trays, making Evergreen's recycled resin unsalable. The complaint

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states that Evergreen is not aware of any other school system

Genpak converted to black-colored trays, and that, as a result of

the conversion, Genpak undermined Evergreen's efforts in Pasco

County.

Evergreen's continued effort to expand led it to

California, where a movement to ban polystyrene products was

growing across the state. Perot Investments was willing to fund

$10 million for upgrades in Evergreen's Georgia operations, in

exchange for a new operation for the Los Angeles Unified School

District, and for a rollout of nine additional "school-to-career"

closed-loop recycling sites, if one of the national manufacturers

would embrace Evergreen's business method. None of the producer

defendants would work with Evergreen, so in May 2007, Evergreen

began a dialogue with PFPG about funding to support a California

recycling effort. On May 14, 2007, the director of the PFPG, Mike

Levy ("Levy"), e-mailed Forrest concerning Evergreen's funding

request, and included representatives from the ACC/PFPG, Pactiv,

Genpak and Dart in his response. Levy's e-mail made clear that any

funding decision would come down to a discussion with PFPG member

companies, and that the ultimate decision would turn on whether the

companies decided "to move ahead." Evergreen followed up by

submitting its proposal on May 21, 2007, and on June 20, 2007, Levy

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notified Evergreen that "we have decided to pursue other options at

this time."2

The complaint states that Evergreen was able to secure

contracts with the Newton County School system in Georgia, the

Pasco County School system in Florida, and a 25-school pilot

program with Miami-Dade County in Florida in 2008. It also reached

commitments in the same year with the Atlanta Public School system,

Georgia Tech University, and the Atlanta cafeterias of the Internal

Revenue Service and the Centers for Disease Control. Other school

districts continued to express interest, including those in Los

Angeles, New York City, and counties in North Carolina, South

Carolina, Maryland, Georgia, and others.

However, between 2007 and 2009, defendants are alleged to

have participated in an organized boycott that involved withholding

positive information about the success of Evergreen's earlier

recycling programs, promoting a sham competitor, and disseminating

false information to the public about the cost-effectiveness of

Evergreen's closed-loop recycling method. Specifically, the

2
In its opinion dismissing Evergreen's antitrust claim, the
district court cited allegations made in the First Amended
Complaint and memos attached thereto. See, e.g., Evergreen
Partnering Grp., Inc. v. Pactiv Corp., 865 F. Supp. 2d 133, 137 (D.
Mass. 2012). However, since "[a]n amended complaint supersedes the
original complaint, and facts that are neither repeated nor
otherwise incorporated into the amended complaint no longer bind
the pleader," InterGen N.V. v. Grina, 344 F.3d 134, 145 (1st Cir.
2003), we limit our analysis to the allegations made in Evergreen's
Second Amended Complaint.

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complaint alleges that in late 2007 and early 2008, after Evergreen

repeatedly sought public acknowledgment from the PFPG of its

recycling successes, Dart's Ray Ehrlich ("Ehrlich"), working

closely with the director of the PFPG, wrote an article for the ACC

website entitled "Economic Realities of Recycling." The article

neither mentions Evergreen's successes in Boston, Providence, and

Gwinnett and DeKalb counties, nor the growing demand for

Evergreen's recycling services around the country. Instead, it

concludes that, "[i]n the future, we will continue to see an

absence of polystyrene food service recycling programs, because in

business, economics rule over emotion."

Additionally, Ehrlich, Levy, and Pactiv's Terry Coyne

("Coyne") used the internet, e-mails, and an ACC-funded

publication, Plastic News, to promote and disseminate information

about a purported competitor to Evergreen, Packaging Development

Resource ("PDR"), namely, that it was capable of producing closed-

loop trays through the Evergreen method. These communications were

sent at least to Eastern Bag & Paper, Southeastern Paper, Dade

Paper, and a number of school districts, including schools in

Gwinnett County, DeKalb County, Atlanta, New York, Miami Dade

Unified, Los Angeles Unified, and the South Carolina School

Alliance. The communications stated that PDR was successfully

operating a closed-loop recycling program, constituted an

endorsement of a competitor to Evergreen, and removed Evergreen's

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exemption from the school systems' competitive bidding process

because it was no longer a single-source supplier.

However, the complaint alleges that PDR was either

illegitimate or a fraud as it was neither running nor capable of

running a closed-loop recycling program similar to Evergreen's. In

fact, Plastic News reporter Michael Verspej told Forrest that he

determined that the PDR information was false and was probably an

attempt by PFPG members to "mislead and corrupt the science of

closed-loop polystyrene recycling." Pactiv is even alleged to have

admitted that PDR was incapable of closed-loop recycling.

Evergreen's own investigation into PDR revealed that PDR had no

washing, grinding or extrusion equipment, but was rather actively

transporting used and discarded polystyrene foam from San Diego

schools to a landfill. The promotion of a competitor incapable of

recycling polystyrene, it is claimed, reinforced to consumers the

industry's message that polystyrene could not be recycled in a

cost-effective manner.

Finally, Coyne from Pactiv is alleged to have falsely

told Brad Courey from Gwinnett County schools in an e-mail that

Evergreen's PC-PSR was "more expensive" than virgin resin and

created problems with production. However, Pactiv's Technical

Director, Camilo Cano, acknowledged in an e-mail that Evergreen's

resin was capable of producing products with no major problems.

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Further, Evergreen claims that its resin was priced competitively

with virgin resin.

Allegedly, after losing millions of dollars in revenue

and profits, as well as valuable business relationships, Evergreen

was forced to shut down its operations in December 2008 as a result

of defendants' anticompetitive course of conduct. In early 2009,

several defendants reached out to Evergreen, acknowledging in a

letter from the ACC the success of its closed-loop program in New

England and many Southeastern states. Pactiv and Genpak also sent

letters to express interest in working with Evergreen to establish

a closed-loop recycling program. Given the late nature of these

acknowledgments, Evergreen's complaint characterizes them as a

"disingenuous after[-]the[-]fact attempt to conceal the wrongs

[d]efendants had perpetrated and a transparent attempt to avoid

litigation."

Evergreen commenced the instant action, alleging

principally that defendants' agreement to boycott Evergreen

violated § 1 of the Sherman Act, 15 U.S.C. § 1, and the

Massachusetts Fair Business Practices Act, Mass. Gen. Laws ch. 93A

("Chapter 93").

D. Procedural History

Defendants collectively and individually moved to dismiss

Evergreen's complaint pursuant to Fed. R. Civ. P. 12(b)(6) for

failure to state a claim upon which relief can be granted. They

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argued, inter alia, that the complaint did not set forth a

plausible basis for finding any agreement, but rather merely listed

allegations consistent with unilateral refusals to deal based on

business decisions. Evergreen opposed defendants' motions, arguing

that the complaint met the standard established in Bell Atlantic

Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556

U.S. 662 (2009), but requested in its opposition permission to file

an amended complaint if the court did not agree.

The district court relied on Twombly in granting

defendants' motions to dismiss with prejudice and entering judgment

in their favor. Specifically, it found that, "as in Twombly, there

are legitimate business reasons that can as easily explain

defendants' refusal to deal with Evergreen or to compete with one

another for market share as can any insinuation of a conspiratorial

agreement, Evergreen has failed to plead a viable claim under

section 1." Evergreen Partnering Grp., Inc. v. Pactiv Corp., 865

F. Supp. 2d 133, 140 (D. Mass. 2012) (emphasis added).

II. Discussion

Evergreen argues on appeal that the allegations in its

complaint are sufficient to support a plausible conspiracy claim

under § 1 of the Sherman Act, and the district court erred in

concluding otherwise. After reviewing the district court's

analysis of the facts alleged and its application of the Twombly

plausibility standard, we agree with Evergreen.

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A. Evergreen's Conspiracy Claims

This Court reviews whether a complaint alleges sufficient

facts to state a claim on which relief can be granted de novo.

Silverstrand Invs. v. AMAG Pharms., Inc., 707 F.3d 95, 101 (1st

Cir. 2013).

Evergreen asserts conspiracy claims under § 1 of the

Sherman Act, 15 U.S.C. § 1. Section 1 provides that "[e]very

contract, combination in the form of trust or otherwise, or

conspiracy, in restraint of trade or commerce among the several

States . . . is declared to be illegal." Section 1 may be violated

"when a group of independent competing firms engage in a concerted

refusal to deal with a particular supplier, customer, or

competitor." González-Maldonado v. MMM Healthcare, Inc., 693 F.3d

244, 249 (1st Cir. 2012) (citing Klor's, Inc. v. Broadway-Hale

Stores, Inc., 359 U.S. 207, 212 (1959); Fashion Originators' Guild

of Am. v. Fed. Trade Comm'n, 312 U.S. 457, 465 (1941)).

In challenging the district court's ruling, Evergreen

argues not only that it pled sufficient facts to survive dismissal,

but also that the district court made a number of improper

inferences from the alleged facts while substantively weighing

those facts against defendants' alternative explanations for

refusing to deal with Evergreen. First, Evergreen contends, the

district court either credited as true or inferred the truth of

defendants' bases for rejecting dealings with Evergreen.

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Specifically, Evergreen claims, the district court concluded

without support from the complaint that while several of the

producer defendants tested or purchased Evergreen's recycled resin,

they "found the results disappointing for various and often

different reasons." Evergreen, 865 F. Supp. 2d at 140. The court

also stated that partnering with Evergreen would have

"significantly increased [defendants'] costs," id., even though the

complaint alleged exactly the opposite. Further, Evergreen cites

the recent Second Circuit decision in Anderson News, LLC v.

American Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012), cert.

denied, 133 S. Ct. 846 (2013), to support its contention that, at

the pleadings stage, a district court may not choose between two

plausible inferences that may be drawn from factual allegations,

dismissing a complaint "merely because [it] finds a different

version more plausible."

1. Alleging Agreement at the Pleadings Stage

Section 1 of the Sherman Act does not prohibit all

unreasonable restraints of trade, but "only restraints effected by

a contract, combination or conspiracy." Twombly, 550 U.S. at 553

(quoting Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752,

775 (1984)). In evaluating whether a restraint is effected by such

a combination or conspiracy in violation of § 1, "'[t]he crucial

question' is whether the challenged anticompetitive conduct

'stem[s] from [an] independent decision or from an agreement, tacit

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or express.'" Id. (quoting Theatre Enters., Inc. v. Paramount Film

Distrib. Corp., 346 U.S. 537, 540 (1954)). An agreement may be

found when "the conspirators had a unity of purpose or a common

design and understanding, or a meeting of minds in an unlawful

arrangement." Copperweld, 467 U.S. at 771 (internal quotation

marks and citation omitted). In the context of § 1 refusal-to-deal

or boycott claims, joint or concerted action must be sufficiently

alleged since "[a] manufacturer . . . generally has a right to

deal, or refuse to deal, with whomever it likes, as long as it does

so independently." Monsanto Co. v. Spray-Rite Serv. Corp., 465

U.S. 752, 761 (1984); Kartell v. Blue Shield, 749 F.2d 922, 932

(1st Cir. 1984). In alleging conspiracy, an antitrust plaintiff

may present either direct or circumstantial evidence of defendants'

"conscious commitment to a common scheme designed to achieve an

unlawful objective." Monsanto, 465 U.S. at 764 (citation and

internal quotation marks omitted).

Since this appeal concerns dismissal at the pleadings

stage, we need not concern ourselves with the evidentiary

sufficiency of Evergreen's antitrust claims on the merits. Cf.

Rodríguez-Reyes v. Molina-Rodríguez, 711 F.3d 49, 54 (1st Cir.

2013) (stating, in the discrimination context, that "[t]he prima

facie standard is an evidentiary standard, not a pleading standard,

and there is no need to set forth a detailed evidentiary proffer in

a complaint."). Rather, we focus on the applicable standard for

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pleading a plausible refusal-to-deal claim. Specifically, we

concentrate on the requirements for sufficiently pleading an

agreement under § 1 following Twombly's injunction that

[a] statement of parallel conduct, even
conduct consciously undertaken, needs some
setting suggesting the agreement necessary to
make out a § 1 claim; without that further
circumstance pointing toward a meeting of the
minds, an account of a defendant's commercial
efforts stays in neutral territory. An
allegation of parallel conduct is thus much
like a naked assertion of conspiracy in a § 1
complaint: it gets the complaint close to
stating a claim, but without some further
factual enhancement it stops short of the line
between possibility and plausibility of
entitlement to relief.

Twombly, 550 U.S. at 557 (internal quotation marks omitted).

Courts have evaluated the line between "merely" alleging

parallel conduct and alleging plausible agreement on a case-by-case

basis after Twombly, and that process has elicited considerable

confusion among the lower courts as to how much of a "setting" is

required to sufficiently contextualize an agreement in the absence

of direct evidence. Compare Anderson News, 680 F.3d 162, 189

(finding sufficient allegations to support a plausible refusal-to-

deal claim), with Burtch v. Milberg Factors, Inc., 662 F.3d 212,

230 (3d Cir. 2011) (finding the plaintiff did not show plausibility

of agreement to restrain trade through circumstantial evidence);

see also In re Text Messaging Antitrust Litig., 630 F.3d 622, 624

(7th Cir. 2010) (district court certifying for interlocutory appeal

the question of an antitrust complaint's adequacy because while

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"the Seventh Circuit had issued dozens of decisions concerning the

application of Twombly, the contours of the Supreme Court's ruling,

and particularly its application in the present context, remain

unclear."); Robert G. Bone, Twombly, Pleading Rules, and the

Regulation of Court Access, 94 Iowa L. Rev. 873, 881 (2010) ("The

[Supreme] Court's criticism of Conley has caused a great deal of

confusion . . . [in] determining exactly how the plausibility

standard changes previous Rule 8(a)(2) pleading law . . . .

'Plausible' corresponds to a probability greater than 'possible.'

Exactly how much greater is uncertain."). The slow influx of

unreasonably high pleading requirements at the earliest stages of

antitrust litigation has in part resulted from citations to case

law evaluating antitrust claims at the summary judgment and post-

trial stages, as the district court has done here. See, e.g., In

re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 323 n.21 (3d Cir.

2010) ("Although Twombly's articulation of the pleading standard

for § 1 cases draws from summary judgment jurisprudence, the

standards applicable to Rule 12(b)(6) and Rule 56 motions remain

distinct."). It is thus imperative that we correct this confusion

and clarify the proper pleading requirements for sufficiently

alleging agreement in § 1 complaints.

The Supreme Court in Twombly has offered some guidance as

to how to properly plead agreement:

a conclusory allegation of agreement at some
unidentified point does not supply facts

-23-
 adequate to show illegality . . . . [W]hen
allegations of parallel conduct are set out in
order to make a § 1 claim, they must be placed
in a context that raises a suggestion of
preceding agreement, not merely parallel
conduct that could just as well be independent
action.

Twombly, 550 U.S. at 556-57. The Court affirmed the dismissal of

plaintiffs' complaint because it proceeded "exclusively via

allegations of parallel conduct." Id. at 565 n.11 (emphasis

added). Specifically, the complaint alleged (1) that defendants

"engaged in parallel conduct in their respective service areas to

inhibit the growth of upstart" competitors, id. at 550; and (2)

that defendants collectively failed to meaningfully pursue

"attractive business opportunit[ies] in contiguous markets where

they possessed substantial competitive advantages," id. at 551

(internal quotation marks omitted). Additionally, the complaint

offered no "specific time, place or person involved in the alleged

conspiracy," id. at 565 n.10, alleging only that "some illegal

agreement may have taken place between unspecified persons at

different [Incumbent Local Exchange Carriers] . . . at some point

over seven years," id. at 560 n.6. Thus, according to the Court,

the "complaint le[ft] no doubt that plaintiffs rest[ed] their § 1

claim on descriptions of parallel conduct and not on any

independent allegation of actual agreement among the [defendants]."

Id. at 564.

-24-
 In a footnote, the Court referred to commentators'

examples of the type of evidence that may indicate collusion:

"parallel behavior that would probably not
result from chance, coincidence, independent
responses to common stimuli, or mere
interdependence unaided by an advance
understanding among the parties" . . . [;]
"conduct [that] indicates the sort of
restricted freedom of action and sense of
obligation that one generally associates with
agreement."

Id. at 557 n.4 (citations omitted). These types of facts have been

characterized as "parallel plus" or "plus factors." See, e.g., In

re Text Messaging, 630 F.3d at 628; In re Ins. Brokerage, 618 F.3d

at 321-22; Nelson v. Pilkington PLC (In re Flat Glass Antitrust

Litig.), 385 F.3d 350, 360 (3d Cir. 2004); Petruzzi's IGA

Supermarkets v. Darling-Delaware Co., 998 F.2d 1224, 1242 (3d Cir.

1993).

Twombly also clarified that "[a]sking for plausible

grounds to infer an agreement does not impose a probability

requirement at the pleading stage; it simply calls for enough fact

to raise a reasonable expectation that discovery will reveal

evidence of illegal agreement." 550 U.S. at 556. It is not for

the court to decide, at the pleading stage, which inferences are

more plausible than other competing inferences, since those

questions are properly left to the factfinder. See Monsanto, 465

U.S. at 766 n.11 (the meaning of documents that are "subject to"

divergent "reasonable . . . interpret[ations]" either as "referring

-25-
to an agreement or understanding that distributors and retailers

would maintain prices" or instead as referring to unilateral and

independent actions, is "properly . . . left to the jury"); id. at

767 n.12 ("The choice between two reasonable interpretations . . .

of testimony properly [i]s left for the jury."). At these early

stages in the litigation, the court has no substantiated basis in

the record to credit a defendant's counterallegations. Instead, we

may at this early stage only accept as true all factual allegations

contained in a complaint, make all reasonable inferences in favor

of the plaintiff, and properly refrain from any conjecture as to

whether conspiracy allegations may prove deficient at the summary

judgment or later stages. Twombly, 550 U.S. at 555-56 ("Rule

12(b)(6) does not countenance . . . dismissals based on a judge's

disbelief of a complaint's factual allegations." (internal

quotation marks omitted)); Anderson, 680 F.3d at 185 ("A court

ruling on . . . a [Rule 12(b)(6)] motion may not properly dismiss

a complaint that states a plausible version of the events merely

because the court finds a different version more plausible."). In

fact, "a well-pleaded complaint may proceed if it strikes a savvy

judge that actual proof of the facts alleged is improbable, and

that a recovery is very remote and unlikely." Twombly, 550 U.S. at

556 (internal quotation marks omitted).

The Second Circuit's recent elucidation of Twombly's

plausibility test in § 1 conspiracy cases is illuminating. See

-26-
Anderson News, 680 F.3d at 189-90. In Anderson News, the court

reviewed a district court's dismissal of a bankrupt magazine

wholesaler's § 1 refusal-to-deal claim, finding error where the

plaintiff's factual allegations and reasonable inferences were

sufficiently plausible to survive a Rule 12(b)(6) motion to

dismiss. Id. at 189. The court clarified the proper application

of Twombly's plausibility requirement, stating:

The question at the pleading stage is not
whether there is a plausible alternative to
the plaintiff's theory; the question is
whether there are sufficient factual
allegations to make the complaint's claim
plausible. . . . [T]here may . . . be more
than one plausible interpretation of the
defendant's words, gestures, or conduct.
Consequently, although an innocuous
interpretation of the defendants' conduct may
be plausible, that does not mean that the
plaintiff's allegation that that conduct was
culpable is not also plausible. . . . [O]n a
Rule 12(b)(6) motion it is not the province of
the court to dismiss the complaint on the
basis of the court's choice among plausible
alternatives. Assuming that [plaintiff] can
adduce sufficient evidence to support its
factual allegations, the choice between or
among plausible interpretations of the
evidence will be a task for the factfinder.

Id. at 189-90 (citations omitted and emphasis added). Pleading

requirements are thus starkly distinguished from what would be

required at later litigation stages under Matsushita Electric

Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986), or at

trial under Monsanto, 465 U.S. at 768, and Theatre Enterprises, 346

U.S. at 540-41: "to present a plausible claim at the pleading

-27-
stage, the plaintiff need not show that its allegations suggesting

an agreement are more likely than not true or that they rule out

the possibility of independent action." Anderson News, 680 F.3d at

184; see also Watson Carpet & Floor Covering, Inc. v. Mohawk

Indus., 648 F.3d 452, 458 (6th Cir. 2011) ("Often, defendants'

conduct has several plausible explanations. Ferreting out the most

likely reason for the defendants' actions is not appropriate at the

pleadings stage.").

Twombly is therefore clear that, if no direct evidence of

agreement is alleged, it is insufficient to exclusively allege

parallel conduct at the pleadings stage. Rather, a complaint must

at least allege the general contours of when an agreement was made,

supporting those allegations with a context that tends to make said

agreement plausible. Many courts have referenced "plus factors" in

analyzing the plausibility of § 1 claims at the pleadings stage,

but those references have invariably been drawn from cases

evaluating the merits of an antitrust plaintiff's conspiracy claim

at the summary judgment and trial stages of litigation, when there

is significantly more information available regarding whether

complex analyses of pricing structures and other information

suggest agreement. See, e.g., In re Ins. Brokerage, 618 F.3d at

321-22 (relying on Flat Glass, 385 F.3d at 359-60, which explains

that "plus factors" are "proxies for direct evidence of an

agreement"). However, we have made clear that "[p]laintiffs must

-28-
establish that it is plausible that defendants are engaged in more

than mere conscious parallelism, by pleading and later producing

evidence pointing toward conspiracy, sometimes referred to as 'plus

factors.'" White v. R.M. Packer Co., 635 F.3d 571, 577 (1st Cir.

2011) (emphasis added). This is not to say that a § 1 conspiracy

may not be made more plausible by bolstering factual allegations of

parallel conduct with appropriate "plus factors"; it is merely to

highlight the distinction between pleading a plausible § 1 claim

and the much later requirement of producing "plus factor" evidence

pointing towards conspiracy.3

We are thus wary of placing too much significance on the

presence or absence of "plus factors" at the pleadings stage.

While they are certainly helpful in guiding a court in its

assessment of the plausibility of agreement in a § 1 case, other,

more general allegations informing the context of an agreement may

be sufficient. This is particularly true given the increasing

3
We also note that footnote 4 in Twombly is very broad and
suggestive of allegations that may support agreement at the
pleadings stage -- "conduct that indicates the sort of restricted
freedom of action and sense of obligation that one generally
associates with agreement" -- and the Court explicitly rejected a
heightened pleading standard in antitrust cases after acknowledging
that discovery in antitrust cases "can be expensive." 550 U.S. at
558; see id. at 569 n.14 ("[W]e do not apply any 'heightened'
pleading standard, nor do we seek to broaden the scope of Federal
Rule of Civil Procedure 9, which can only be accomplished 'by the
process of amending the Federal Rules, and not by judicial
interpretation.'") (citation omitted); see also West Penn Allegheny
Health Sys., Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010)
(rejecting district court's application of a heightened pleading
standard in antitrust cases).

-29-
complexity and expert nature of "plus factor" evidence which would

not likely be available at the beginning stages of litigation.

It is also clear that allegations contextualizing

agreement need not make any unlawful agreement more likely than

independent action nor need they rule out the possibility of

independent action at the motion to dismiss stage. Requiring such

heightened pleading requirements at the earliest stages of

litigation would frustrate the purpose of antitrust legislation and

the policies informing it. Radovich v. Nat'l Football League, 352

U.S. 445, 454 (1957) ("Congress itself has placed the private

antitrust litigant in a most favorable position . . . . In the face

of such a policy this Court should not add requirements to burden

the private litigant beyond what is specifically set forth by

Congress in those laws."); see also Twombly, 550 U.S. at 587

(Stevens, J., dissenting) ("It is . . . more, not less, important

in antitrust cases to resist the urge to engage in armchair

economics at the pleading stage."); Arthur R. Miller, Simplified

Pleading, Meaningful Days in Court, and Trials on the Merits:

Reflections on the Deformation of Federal Procedure, 88 N.Y.U. L.

Rev. 286, 365-66 (2013) ("If the procedural rules are not receptive

to lawsuits designed to vindicate the objectives of our

constitutional and statutory policies, or if cases pursuing that

end cannot be lodged in a convenient forum or survive a motion to

-30-
dismiss, such cases will not be instituted and those policies will

not be furthered.").

2. Evergreen's Allegations of Agreement

The facts alleged in Evergreen's complaint go much

further than the complaint at issue in Twombly, raising a plausible

§ 1 antitrust claim. While each of Evergreen's allegations of

circumstantial agreement standing alone may not be sufficient to

imply agreement, taken together, they provide a sufficient basis to

plausibly contextualize the agreement necessary for pleading a § 1

claim. Unlike Twombly, Evergreen's complaint does not rely

exclusively on parallel conduct, but alleges facts concerning when

agreement occurred and providing circumstantial evidence to

establish a setting to make agreement plausible.

First, it specified the 2005-2006 PFPG meeting as the

locus of agreement, further alleging that all defendants were

members of PFPG, that two producer defendants dominant in the

polystyrene lunch tray and cup production markets -- Pactiv and

Dart -- put forward their position that recycling polystyrene

products was not an option in the industry's battle with

polystyrene critics, and Evergreen was the "sole source for

recycling polystyrene." Also, Pactiv and Dart are alleged to pay

the majority of PFPG's yearly dues, and at this stage, one could

infer that their prominent place in the organization would place

-31-
some pressure on other producer defendants to conform with their

position on recycled polystyrene.

Further support for agreement was alleged in defendants'

parallel conduct following the PFPG meeting as well as their global

failure to adopt Evergreen's closed-loop system. For example, the

complaint alleges that:

C Dolco abruptly withdrew its interest in producing for
Evergreen's closed-loop system after the meeting;

C Genpak and Pactiv both refused to work with Evergreen
despite requests from their client, Southeastern Paper
Group, that they do so;

C Solo refused to work with Evergreen after it was asked by
Eastern Bag & Paper to supply it with Poly-Sty-Recycle
products, even though it had successfully tested
Evergreen's PC-PSR;

C Solo's President and CEO told the President of Eastern
Bag & Paper that "he had been told by his people not to
work with Evergreen or Michael Forrest";

C Pactiv refused to use PC-PSR with distributors for
Compass, representing to Compass that polystyrene
recycling was not economically feasible;

C Pactiv induced Sodexo to cancel its contract with
Evergreen;

C Pactiv refused to work with Evergreen despite requests
from Sysco and Eastern Bag & Paper to reconsider;

C Genpak converted Pasco County's foam lunch trays from
white to black, knowing that Evergreen could only recycle
white resin, and did not convert other county trays from
white to black;

C Pactiv, Dart and the ACC promoted a "sham competitor,"
PDR, known to be fraudulent, to force Evergreen to make
higher bids for projects and to discredit polystyrene
recycling;

-32-
C Pactiv, Dart and the ACC told their clients that
polystyrene recycling was not economically feasible and
published articles to that effect, despite, in Pactiv's
case, their tests having revealed the opposite;

C The ACC/PFPG and its members jointly agreed to refuse
funding for Evergreen's California project.

Evergreen's allegations regarding defendants' promotion of a sham

competitor, if proven, would be particularly telling because the

alleged conduct goes beyond rejecting a new entrant in favor of the

benefits of the status quo. These allegations describe proactive

destructive conduct, aimed directly at the success of Evergreen and

polystyrene recycling generally, which is difficult to explain

outside the context of a conspiracy.

Finally, the complaint provided allegations setting forth

circumstantial evidence to establish a context for plausible

agreement in the form of industry information and facilitating

practices. It alleged that the polystyrene food services industry

is highly concentrated, with the five producer defendants

controlling 90 percent of the market, and the success of

Evergreen's business model depended on the participation of at

least one of the producer defendants due to scale requirements of

large school districts and institutional customers. See, e.g., In

re Text Messaging, 630 F.3d at 627-28 ("industry structure that

facilitates collusion constitutes supporting evidence of

collusion"); E. Food Servs., Inc. v. Pontifical Catholic Univ.

Servs. Ass'n, 357 F.3d 1, 8 (1st Cir. 2004) ("The best example of

-33-
a possible threat to competition exists where a market is already

heavily concentrated and long-term exclusive dealing contracts at

either the supplier or distribution end foreclose so large a

percentage of the available supply or outlets that entry into the

concentrated market is unreasonably constricted."); Todd v. Exxon

Corp., 275 F.3d 191, 208 (2d Cir. 2001) ("Generally speaking, the

possibility of anticompetitive collusive practices is most

realistic in concentrated industries.").

The complaint further stated that defendants' conduct

resulted in anticompetitive effects because "innovation in the

market for the development and sale of cost-effective and

environmentally conscious polystyrene food service products with

post-consumer recycled content will continue to be artificially

restrained." See Atari Games Corp. v. Nintendo of Am., Inc., 897

F.2d 1572, 1576 (Fed. Cir. 1990) (noting that the antitrust laws

are "aimed at encouraging innovation"); Phillip E. Areeda & Herbert

Hovenkamp, Antitrust Law, ¶ 2115b1, at 115 (3d ed. 2008) (while not

construed as naked restraints, agreements between firms engaged in

joint innovation not to innovate in the same area outside the

context of the joint venture "are to be regarded as ancillary . . .

and are thus subject to the usual proof of power and

anticompetitive effects."). It also alleged that the producer

defendants were comfortable with the status quo because each of

-34-
them was dominant in its respective niche of the polystyrene

industry.

Additionally, the complaint points to the producer

defendants' membership in the PFPG as a facilitating practice as

well as the ACC/PFPG's use of a joint e-mail, including the member

producer defendants, in the organization's correspondence with

Evergreen wherein ACC/PFPG denied Evergreen's request for funding.4

Such exchanges may serve as practices facilitating collusion as

they provide a basis for notifying alleged members of the

4
Defendants argue that Evergreen's complaint failed to allege any
facts that the ACC acted as an independent entity in the alleged
boycott, and, therefore, it cannot be liable under § 1. They rely
on Alvord-Polk, Inc. v. F. Schumacher & Co., 37 F.3d 996, 1007 (3d
Cir. 1994). This argument was not addressed by the district court,
but even assuming we adopt the Third Circuit's rule regarding trade
association liability, Evergreen has sufficiently alleged action by
the ACC as an independent entity to survive a motion to dismiss.
Since the PFPG is a business group within the ACC, it is reasonable
to infer that the ACC was aware of the PFPG's 2005-2006 meeting.
Further, the complaint alleges that the ACC allowed Dart to publish
a misleading article on its website and used its publication --
Plastic News -- to promote a sham competitor to Evergreen.
Finally, the complaint alleges that Evergreen reached out to PFPG
and the ACC to "validate its closed-loop program" as well as
seeking funding for its California project. When Evergreen's
proposal was put before the PFPG's members, who made a group
decision to deny funding for the project, it was the PFPG, on ACC
letterhead, that notified Evergreen. This is sufficient to state
a claim that, at a minimum, the ACC acquiesced to and/or aided and
abetted a trade-restraining agreement actionable under § 1 at this
stage. See United States v. Paramount Pictures, Inc., 334 U.S.
131, 161 (1948) ("[A]cquiescence in an illegal scheme is as much a
violation of the Sherman Act as the creation and promotion of
one."); Spectators' Commun. Network, Inc. v. Colonial Country Club,
253 F.3d 215, 220-21 (5th Cir. 2001); MCM Partners v. Andrews-
Bartlett & Assocs., 62 F.3d 967, 973 (7th Cir. 1995); Virginia
Vermiculite, Ltd. v. W.R. Grace & Co., 156 F.3d 535, 541 (4th Cir.
1998).

-35-
conspiracy of the agreed-upon refusal to deal as well as to keep

tabs on members. See Allied Tube & Conduit Corp. v. Indian Head,

486 U.S. 492, 500 (1988) ("[P]rivate standard-setting associations

have traditionally been objects of antitrust scrutiny . . ."); In

re Text Messaging, 630 F.3d at 628 (noting as significant in the

complaint the allegation that defendants belonged to a trade

association and exchanged information directly at association

meetings: "[t]his allegation identifies a practice, not illegal in

itself, that facilitates price fixing that would be difficult for

the authorities to detect."); Todd, 275 F.3d at 213 (meetings

between defendants "have the potential to enhance the

anticompetitive effects and likelihood of . . . uniformity caused

by information exchange" (citation and internal quotation marks

omitted)); Susan S. DeSanti & Ernest A. Nagata, Competitor

Communications: Facilitating Practices or Invitations to Collude?,

63 Antitrust L.J. 93, 121 (1994) (discussing circumstances,

including trade association meetings, where communications among

competitors raise antitrust concerns). The complaint also states

that the defendant producers acted against their own best interests

when refusing to deal with Evergreen since the closed-loop program

it offered was "cost-neutral," the royalties requested by Evergreen

were "standard in the industry," and shifting to recycled

polystyrene would have produced abundant savings to customers and

resulted in a higher volume of customer sales due to the

-36-
attractiveness of potential savings and environmental benefits.

See In re Ins. Brokerage, 618 F.3d at 321-22 (listing evidence that

a defendant acted contrary to its interests as one of three

examples of "plus factors").

In assessing these allegations, the district court

improperly applied a heightened pleading standard in reviewing

Evergreen's complaint, and it improperly occupied a factfinder role

when it both chose among plausible alternative theories

interpreting defendants' conduct and adopted as true allegations

made by defendants in weighing the plausibility of theories put

forward by the parties. The court went beyond Twombly's pleading

requirements when it found Evergreen's complaint deficient as

compared to those in other cases that pled "highly specific details

as to how the alleged conspirators communicated with each other,

the individuals who were involved, when the communications took

place, the substance of their contents, and the dramatic switch in

business practices that followed." Evergreen, 865 F. Supp. 2d at

142. As discussed earlier, Twombly does not require such

heightened pleadings for § 1 claims.

The district court further made inferences in favor of

defendants when the complaint made opposing allegations -- for

example, that Evergreen's PC-PSR was, in fact, more expensive than

virgin resin. It then proceeded to evaluate the plausibility of

defendants' "legitimate business reasons" for refusing to deal with

-37-
Evergreen over and against the allegations made in the complaint.

Id. at 140. Those business reasons -- that Evergreen's business

plan stood to raise costs for the producer defendants and their

consumers; that it required the producer defendants to expand

beyond their established market niches and disrupt a profitable

status quo; and that it would have undermined the producer

defendants' existing and even more profitable environmentally

conscious products -- may prove, at later stages in the litigation,

substantial enough to prevent Evergreen from sufficiently ruling

out the possibility of independent action. However, as to the

first listed reason, we decline to choose defendants' factual

assertion regarding the costs of Evergreen's PC-PSR against

Evergreen's contrary assertion in its complaint that we must accept

as true.5 Regarding the second business reason stated by

defendants, the extent to which Evergreen's business model would

have required the producer defendants to expand beyond their market

niches and would have undermined the sales of their other products

is entirely unclear at this stage. If we accept as true

Evergreen's allegations, their model would be entirely consistent

with the producer defendants maintaining their established market

niches while incorporating the closed-loop process into their

5
These factual allegations in Evergreen's complaint include the
assertion that virgin resin was competitively priced and that the
additional "environmental fee" was "specifically structured to be
merely a percentage of the cost-savings each school achieved by
virtue of its participation in the closed-loop program."

-38-
existing agreements. Finally, even assuming the producer

defendants' existing "green" products would have been undermined by

their choosing to deal with Evergreen, that fact alone would not

likely explain the kind of coordinated conduct alleged between the

defendants and just as plausibly suggests a motive to conspire to

boycott Evergreen's model.

The district court further improperly weighted

defendants' alleged inconsistent responses to Evergreen when it

weighed the parties' respective accounts regarding the plausibility

of a conspiracy. In fact, "there is nothing implausible about

coconspirators' starting out in a disagreement as to how to deal

conspiratorially with their common problem." Anderson News, 680

F.3d at 191. Finally, it improperly considered "the parties'

differing roles in the polystyrene business" as "weigh[ing] against

the plausibility of any antitrust claim." See González-Maldonado,

693 F.3d at 249 ("A violation of section 1 may well occur when a

group of independent competing firms engage in a concerted refusal

to deal with a particular supplier, customer, or competitor.").

III. Conclusion

For the aforementioned reasons, we hold that Evergreen

alleged sufficient facts to adequately plead its § 1 claim. Since

the district court summarily dismissed Evergreen's Massachusetts

Chapter 93A claim because it "fail[ed] for the same reasons that

the Sherman Act claim fails," we remand for the district court to

-39-
reconsider this issue consistent with the strictures of this

opinion. We thus vacate the district court's judgment and remand

the case for further proceedings. Costs of appeal awarded to

plaintiff.

Vacated and Remanded.

-40-