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In re Japanese Electronic Products Antitrust Litigation

decided: December 5, 1983.

IN RE: JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION (D.C. MDL NO. 189), ZENITH RADIO CORPORATION, APPELLANT,
v.
MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., ET AL. (D.C. CIV. NO. 74-2451). IN RE: JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION (D.C. MDL NO. 189), NATIONAL UNION ELECTRIC CORPORATION, APPELLANT, V. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., ET AL. (D.C. CIV. NO. 74-3247). IN RE: JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION (D.C. MDL NO. 189), ZENITH RADIO CORPORATION V. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., ET AL. (D.C. CIV. NO. 74-2451); NATIONAL UNION ELECTRIC CORPORATION V. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., ET AL. (D.C. CIV. 74-3247), MITSUBISHI ELECTRIC CORPORATION ("MELCO"), APPELLANT



On Appeal from the United States District Court for the Eastern District of Pennsylvania.

Seitz, Chief Judge, Gibbons and Meskill,*fn* Circuit Judges.

Author: Gibbons

INDEX

I. The Parties and the Charges 251

II. Proceedings to Date 252

A. Preliminary Substantive Rulings 252

B. Preliminary Procedural and Evidentiary Rulings 255

C. The Summary Judgment Ruling 256

III. Scope of Review 257

IV. The Trial Court Did Not Err in Considering the Summary Judgment 257

Motions on This Record

V. Evidence Issues 259

A. The Propriety of in Limine Rulings 260

B. Standards for Admission of Coconspirator Statements 260

C. Rule 803(8)(C) Materials 263

1. The Court's General Approach to Rule 803(8)(C) 264

2. Reports Prepared by the United States Treasury Department Under 266

the 1921 Antidumping Act

3. Findings Under the Trade Act of 1974 271

4. Records and Findings of the Japanese Fair Trade Commission 271

5. Judge Higginbotham's Findings of Fact 275

D. Rule 702 Expert Opinion Evidence 275

1. The DePodwin Report 279

a. Parts IV and V 280

b. Part VI 280

c. Part VII 282

2. The Yamamura Report 282

3. The Nehmer Report 283

4. The Saxonhouse Report 283

5. The Haley Report 284

E. Rule 803(6) Materials 284

1. Authentication 284

2. Admissibility 287

a. The Diaries 289

(1) The Yajima Diaries 289

(2) The Yamada, Tokizane and Kozuke Diaries 291

(3) The Yamamoto Diary 292

(4) The Okuma Diary 292

b. Internal Memoranda 293

c. Minutes of Trade Group Meetings 296

F. Rule 804(b) Materials 298

G. Rule 801(d)(2) Materials 300

H. Rules 803(b)(24), 804(b)(5) and 803(1) 301

I. Other Contentions 303

J. Other Evidence 303

VI. Liability Issues 303

A. Conspiracy 303

1. The Legal Standard for Sufficiency of Evidence of Conspiracy 303

2. The NUE-Zenith Theory of the Case 305

3. Evidence Supporting the NUE-Zenith Conspiracy Theory 306

a. Evidence Relating to Japanese Home Market 306

b. Evidence Relating to Exports to U.S. 310

(1) Motorola, Inc. 311

(2) Sears Roebuck & Co. 312

(3) Sony Corporation 313

(4) MELCO, Mitsubishi Corp. and Mitsubishi International Corp. 314

(5) The Remaining Defendants 314

4. Proof of Injury Arising From Violation of the Antitrust Laws 315

5. The Defense of Sovereign Compulsion 315

6. The Illinois Brick Defense 315

7. Conclusion as to the Conspiracy 316

B. The Attempt to Monopolize 316

C. The Robinson-Patman Claims 316

1. Discrimination Between Japanese and American Customers 316

2. Discrimination Among American Customers 317

D. Zenith's Clayton Act Section 7 Claim 317

E. Clayton Act Injunctive Relief 318

VII. Conclusion 319

Opinion OF THE COURT

GIBBONS, Circuit Judge.

The plaintiffs, National Union Electric Corporation (NUE) and Zenith Radio Corporation (Zenith), appeal from an order of the District Court for the Eastern District of Pennsylvania granting summary judgment in favor of all twenty-four defendants on their respective complaints. The NUE complaint, filed in the District of New Jersey in December 1970, names as defendants seven Japanese television manufacturers, nine of their subsidiaries, and one Japanese trading company. The Zenith complaint, filed in the Eastern District of Pennsylvania in September 1974, names as defendants all of those named in the NUE complaint, a few additional subsidiaries, and two American companies: Motorola, Inc., a manufacturer of consumer electronic products, and Sears Roebuck & Co., a retailer. On January 10, 1975, the Judicial Panel on Multidistrict Litigation transferred the NUE case to the Eastern District of Pennsylvania, pursuant to 28 U.S.C. § 1407 (1976 & Supp. V 1981), for coordinated or consolidated pre-trial proceedings with the Zenith case.*fn1 The defendants and the charges made against them are described more particularly hereafter. Although counterclaims filed by several of the defendants are pending unresolved in the district court, we have jurisdiction over the grant of summary judgment on the NUE and Zenith claims because that court, pursuant to Fed. R. Civ. P. 54(b), directed the entry of a final judgment as to fewer than all claims.*fn2 We conclude that as to most of the defendants the record discloses material issues of disputed fact which made the entry of summary judgment improper. Thus we reverse, except as hereafter noted.

I. The Parties and the Charges

NUE is the corporate successor to Emerson Radio Co., a manufacturer of radio and television receivers, which ceased production of television receivers in February 1970 when it could no longer conduct that activity profitably. NUE claims that it was forced from the market by the unlawful activities of the defendants. Zenith is still a major manufacturer of television receivers. It claims that it has incurred operating losses and lost profits because of the unlawful activities of the defendants.

Both plaintiffs allege a conspiracy to drive all American manufacturers of television receivers out of business by a "scheme to raise, fix and maintain artificially high prices for television receivers sold by defendants in Japan and, at the same time, to fix and maintain low prices for television receivers exported to and sold in the United States." Preliminary Pretrial Memorandum, App., vol. 3, at 712. Both plaintiffs charge that such activity violates sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (1982), and section 73 of the Wilson Tariff Act, 15 U.S.C. § 8 (1962). Both complaints also charge that the pricing activity complained of violates the Antidumping Act of 1916, 15 U.S.C. § 72 (1982). Zenith's complaint alleges sales at depressed prices not only of television receivers, but of radios, phonographs, tape and audio equipment, and electronic components. Zenith also alleges price discrimination among purchasers in violation of section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a) (1982), and as to two Japanese defendants, a violation of section 7 of the Clayton Act, 15 U.S.C. § 18 (1982), by acquiring interests in American manufacturers of consumer electronic products formerly owned by Motorola, Inc. and Sears, Roebuck & Co. Both NUE and Zenith seek treble damages and injunctive relief.

Of the twenty-four defendants, fifteen are named in both suits, seven in the Zenith action only, and two in the NUE action only. Among the principal Japanese defendants, Mitsubishi Corporation is a trading company, Matsushita Electric Industrial Co., Ltd. (MEI), Toshiba Corporation, Hitachi, Ltd., Sharp Corporation, Sanyo Electric Co., Ltd., Sony Corporation*fn3 and Mitsubishi Electric Corporation (MELCO) are manufacturers of television receivers and other consumer electronic products. Many of the subsidiaries of these Japanese corporations are also joined as defendants.*fn4 The section 7 Clayton Act charge addresses two transactions engaged in by Sears Roebuck & Co. and Motorola, Inc., respectively, with individual Japanese defendants. Sears Roebuck & Co., one of this country's largest retailers of consumer electronic products, at one time was a twenty-five percent owner of Warwick Electronics, Inc., a manufacturer of television receivers for private label retail customers. Warwick, in 1976, was acquired by a Sanyo Electric Co. subsidiary in which Sears retained a twenty-five percent interest. Motorola, Inc., a manufacturer of consumer electronic products, sold its television manufacturing business and its trademark "Quasar" to MEI in 1974.

We deal in this opinion with charges based on the Sherman Act, section 1, and the Wilson Tariff Act, both of which are directed at combinations or conspiracies, and which, in granting summary judgment, the district court treated as co-equal in scope.*fn5 We also deal with the charges that the defendants monopolized and attempted to monopolize in violation of section 2 of the Sherman Act. We deal as well with the charges that some defendants violated the Robinson-Patman Act by giving or receiving price discriminations. Finally, we deal with the charge that the Warwick and Motorola transactions violated section 7 of the Clayton Act. Only the section 1 Sherman Act and the Wilson Tariff Act charges require proof of a combination or conspiracy. Evidence bearing on those conspiracy charges, however, is relevant to the non-conspiracy charges in many instances. As described in the plaintiffs' Preliminary Pretrial Memorandum and noted above, "the conspiracy involved an unlawful, concerted scheme to raise, fix and maintain artificially high prices for television receivers sold by defendants in Japan and, at the same time, to fix and maintain low prices for television receivers exported to and sold in the United States." App., vol. 3, at 712.

II. Proceedings to Date

The summary judgment which we review was entered only after a series of preliminary rulings, some of which serve as the predicates for that judgment. Others rejected certain defenses which are now tendered as alternative grounds for affirmance. Thus a complete understanding of the proceedings to date is necessary for the disposition of this appeal.

A. Preliminary Substantive Rulings

In 1975, shortly after the NUE case was transferred to the Eastern District of Pennsylvania, Judge Higginbotham granted motions by the defendants to dismiss Count V of the NUE complaint and Count IV of the Zenith complaint. Both counts charged that by selling electronic consumer products of like grade and quality in Japan at prices higher than those charged to customers in the United States the Japanese manufacturers violated section 2(a) of the Robinson-Patman Act.*fn6 Judge Higginbotham held that these counts failed to state a claim on which relief could be granted because the Robinson-Patman Act required that both of the discriminatory sales take place in the United States.*fn7 In the order appealed from, Judge Becker, to whom the case was assigned when Judge Higginbotham was appointed to this court, directed that the dismissal of the Robinson-Patman claim be made final.*fn8 The NUE notices of appeal are from the entire order, and thus Judge Higginbotham's Robinson-Patman Act ruling is before us.*fn9

Judge Higginbotham next addressed the defendants' motions to dismiss Count I of the NUE and Count VII of the Zenith complaint, which charged violations of the Antidumping Act of 1916. The motions were predicated on the theory that the statute was void for vagueness. The court denied those motions.*fn10 At a later stage in the proceedings Judge Becker granted summary judgment on those counts.*fn11 Judge Higginbotham's ruling on the vagueness challenge is before us in appeal No. 80-2080 from that ruling. See note 2 supra.

In May of 1975 Judge Higginbotham addressed a series of motions by various defendants to dismiss for lack of personal jurisdiction, improper venue, and insufficient service of process. These rulings were made on affidavits and exhibits after extensive discovery on jurisdictional and venue issues. The court held that venue was proper under section 12 of the Clayton Act, 15 U.S.C. § 72 (Q1976), in the districts in which each action was originally filed, and that there was pendent venue over the Antidumping Act claim even if section 12 did not apply. Judge Higginbotham also held that there were sufficient defendant contacts with those districts to support personal jurisdiction, and that each defendant had been properly served.*fn12

Discovery and other pretrial proceedings in the case went forward under the supervision first of Judge Higginbotham and later of Judge Becker. When discovery was substantially complete, Judge Becker, in June of 1979, considered the motion by certain defendants to strike the NUE and Zenith demands for jury trial. Those motions were denied, but the court certified, pursuant to 28 U.S.C. § 1292(b), that the order denying them presented a controlling question of law as to which there was substantial ground for difference of opinion, the pre-trial resolution of which would materially advance the litigation. The district court held that a jury trial could not be denied on the ground that the issues in the case were too complex for juror comprehension.*fn13 This court granted the petition for leave to appeal, and held, one judge dissenting, that the seventh amendment guarantee of the right to jury trial does not prevent the striking of a jury demand when the lawsuit is so complex that the jury would be unable to perform the task of rational decision-making with a reasonable understanding of the factual and legal issues. We remanded for reconsideration of the jury trial demand.*fn14 Without reconsidering the jury trial issue, the trial court eventually granted the summary judgment from which this appeal was taken. While the section 1292(b) appeal on the jury trial issue was under consideration by this court, the district court went forward with the consideration of other motions and with other pre-trial proceedings.

In April of 1980 the trial court considered the motion by MELCO to dismiss the antitrust claims against it on the ground that as a matter of international law it lacked subject matter jurisdiction to impose antitrust liability on a Japanese corporation for activities taking place entirely in Japan. The court denied that motion, holding that as a matter of law those activities would, if proved, support antitrust liability for conduct intended to affect interstate or foreign commerce of the United States.*fn15 MELCO argues here that the district court erred, and that its subject matter jurisdiction contention, based on international law, is an alternative ground for affirmance. Thus we must address it.

Also in April of 1980 the court considered defendants' motions for summary judgment on the NUE and Zenith claims under the Antidumping Act of 1916. Holding that because of technical differences the products sold in Japan and the United States were not sufficiently similar to support liability under that Act, the court granted partial summary judgment dismissing all of NUE's claims under the 1916 Act and most of Zenith's. It certified, however, that its interpretation of the Act was a controlling question of law as to which there is a substantial ground for a difference of opinion and that an interlocutory appeal might materially advance the ultimate disposition of the litigation.*fn16 We granted leave to appeal, but before that appeal was decided summary judgment was granted on the balance of the plaintiffs' case. Thus that interlocutory appeal was held for disposition by the same panel to which the instant appeal is assigned. As noted above, that appeal and the dismissal of Zenith's remaining 1916 Act claims are being decided simultaneously.

In May of 1980 the trial court considered the motion by certain defendants for summary judgment against Zenith on the ground that Zenith could not recover damages under section 4 of the Clayton Act because it was only indirectly injured, since all its sales were made through wholesalers, with whom the defendants competed. That motion was predicated on Illinois Brick Co. v. Illinois, 431 U.S. 720, 52 L. Ed. 2d 707, 97 S. Ct. 2061 (1977), and Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 20 L. Ed. 2d 1231, 88 S. Ct. 2224 (1968). The court denied it, holding that in the circumstances of this case the administrative difficulty of proving a pass-on defense was not a ground for dismissing the complaint.*fn17

In June of 1980 the trial court denied the motion of defendant Sharp Electronics Corporation for summary judgment on plaintiffs' claim based on the Antidumping Act of 1916. Sharp urged that Zenith's claim against it is barred by Article XVI(1) of the Treaty of Friendship, Commerce and Navigation between the United States and Japan, 4 U.S.T. 2063, T.I.A.S. No. 2863 (1953). The court held that the treaty did not bar plaintiffs' claims under the Antidumping Act.*fn18 Sharp urges that the court erred, and relies on the Treaty as an alternative ground for affirming the dismissal of plaintiffs' 1916 Act claims. The opinion addressing those claims disposes of Sharp's contention.

In June of 1980 the trial court also considered the motion by the defendants for summary judgment on NUE's complaint because in 1974 all of NUE's stock was acquired by Aktiebolaget Electrolux (Electrolux), a Swedish corporation. Relying on Bangor Punta Operations, Inc. v. Bangor & Aroostook Railroad Co., 417 U.S. 703, 41 L. Ed. 2d 418, 94 S. Ct. 2578 (1974), the defendants contended that the complaint should be dismissed because Electrolux, the real party in interest, having suffered no injury from defendants' conduct, lacked standing to sue. The court suggested that the Bangor Punta rule was inapplicable as a matter of law, but held that if it was applicable there were genuine fact issues with respect to such application which would in any event bar summary judgment.*fn19 Defendants do not on appeal contend that the denial of summary judgment on the Bangor Punta ground was an error which, if considered by us, would be an alternative ground for affirmance of the summary judgment.

On June 30, 1980 the trial court, without opinion, denied the motion of Sears, Roebuck & Co. for summary judgment on statute of limitations issues, holding that there were genuine issues of material fact on questions of fraudulent concealment and due diligence.*fn20 Sears does not on appeal urge that any applicable statute of limitations affords an alternative ground for affirming the summary judgment.

B. Preliminary Procedural and Evidentiary Rulings

Throughout this protracted case the parties were before the trial court on numerous occasions on discovery matters, a circumstance which resulted in many pretrial orders and at least one reported opinion.*fn21 The product of all of that discovery amounts to several hundred thousand documents, many of which were furnished by the defendants pursuant to Fed.R.Civ.P. 33(c) in lieu of specific answers to interrogatories.*fn22 Prior to the trial court's ruling denying defendants' motions to strike the NUE and Zenith jury trial demands, it also entered a case management order, Pretrial Order No. 154, governing the further progress of the litigation.*fn23 That order regulated completion of discovery and directed the preparation by each party of a final pretrial statement (FPS). Its key provision is that "except for good cause shown, the parties are precluded from offering at trial any facts or evidence supporting such facts which have not been disclosed in the FPS." 478 F. Supp. at 949-50. Pretrial Order No. 154 required the inclusion in the FPS of lists of all public records, reports or data compilations of public officers or agencies, of all documents from private sources, of all depositions, of charts, graphs, models, and reports of experts which the parties intended to offer in evidence. It also dealt with translation of documents. The effect of Pretrial Order No. 154 was to require that each party make, before trial, with preclusive effect, a complete offer of proof on each issue it intended to prove. The order directed that NUE and Zenith file their FPS first, and fixed a schedule during which the defendants could make objections to the admissibility of any of the evidence referred to.

Pursuant to Pretrial Order No. 154, NUE and Zenith, on October 15, 1979, filed their FPS containing factual contentions with cross references to a large number of documents. Because so many documents were involved, the court in Pretrial Order No. 219 ordered the creation of a document depository in the courthouse in which the documents referred to in the NUE and Zenith FPS were to be deposited. The order also required deposit of all documents referred to by the defendants in any motions for summary judgment. By the spring of 1980 the deposit of documents was substantially completed. At that point the court ordered NUE and Zenith to submit a list of documents which constituted independent evidence of the existence of the alleged conspiracy, and which linked each defendant as a member, NUE and Zenith filed such a list, referring to some 250,000 documents in the document depository.

The defendants contended that none of the evidence relied on by NUE and Zenith to establish the existence of the alleged conspiracy, or to establish that they were members of it, was admissible. Objections were made on grounds of authenticity, hearsay, and relevancy. The trial court held an in limine hearing on these objections in order to determine what evidence should be considered on defendants' pending motions for summary judgment. This in limine hearing produced three opinions dealing with the admissibility of evidence. The first of them dealt with the admissibility of public records and reports from various governmental sources in the United States and Japan. The court held that almost all of them were inadmissible and thus would not be considered in opposition to defendants' summary judgment motions.*fn24 A second opinion dealt with a series of documents from non-governmental sources -- mostly from defendants in response to discovery requests -- which NUE and Zenith offered under various hearsay exceptions. The court held that a limited number of these documents were admissible, but that most, for one reason or another, did not qualify for admission.*fn25 Finally the court considered plaintiffs' proffered expert testimony, holding that most of it was inadmissible.*fn26

C. The Summary Judgment Ruling

Having in Pretrial Order No. 154 required that NUE and Zenith make a complete offer of proof with preclusive effect, and having in the in limine hearing on admissibility of evidence excluded a substantial part of the proof so offered, the court next turned to the defendants' summary judgment motions. On the section 1 Sherman Act and Wilson Tariff Act claims the court held that there was no admissible evidence raising an issue of fact as to the existence of the alleged conspiracy to raise, fix and maintain artificially high prices of consumer electric products in Japan while at the same time fixing and maintaining low prices for such products exported to the United States. Since the existence of concerted action is an essential element of those claims, summary judgment was granted on them in favor of the defendants.*fn27

The court then addressed the NUE and Zenith section 2 Sherman Act claims. At the hearing on the motion for summary judgment counsel for NUE and Zenith made clear that this claim was not addressed to attempts by individual defendants to monopolize the American market in consumer electronics products but rather to the behavior of the defendants in the aggregate, a theory of monopolization for which NUE and Zenith claim support in American Tobacco Co. v. United States, 328 U.S. 781, 90 L. Ed. 1575, 66 S. Ct. 1125 (1946). While expressing doubt that even in the aggregate the defendants' American market share was sufficient to support a monopolization claim, the court held that the aggregate-share theory required proof of concert of action. Since in disposing of the section 2 Sherman Act claim, the court found no admissible evidence from which concert of action could be found, summary judgment was entered on the section 2 claim as well.*fn28

Next the court turned to Zenith's Robinson-Patman Act claim that the defendants discriminated in price not only between the Japanese and American markets, but also among American customers. The court read this charge to be inseparable from the conspiracy charge. Thus it, too, fell with the section 1 Sherman and Wilson Tariff Act claims. In addition the court held that Zenith had produced no evidence of injury to competition from the alleged price differential. Since injury to competition is an element of a Robinson-Patman Act violation, summary judgment was entered on this claim as well.*fn29

Finally, the trial court addressed Zenith's charge that the Motorola sale of its Quasar division to MEI, and Sanyo's acquisition of a seventy-five percent interest in Warwick's television manufacturing business violated section 7 of the Clayton Act. Summary judgment was granted on this claim because Zenith had failed to show any injury traceable to those transactions.*fn30

These four rulings disposed of all the NUE and Zenith claims not already disposed of in the substantive preliminary rulings described in Part II A. The court therefore directed the entry of a final judgment in favor of the defendants, deferring its consideration of their counterclaims pending the disposition of the anticipated appeal.

Our description of the proceedings to date is only a summary. The trial court's consideration both of the procedural and evidentiary issues, and of the substantive issues, was comprehensive and detailed. Indeed the reported opinions written by Judges Higginbotham and Becker in advancing the cases to their present posture total over 800 pages in the Federal Supplement. We will, to the extent possible considering the scope of our review, attempt to avoid duplication of their impressive efforts.

III. Scope of Review

An appellate court reviewing the grant of a motion for summary judgment exercises plenary review. Our task is to determine whether "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and [whether] the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). E.g., Coastal States Gas Corp. v. Department of Energy, 644 F.2d 969, 978-79 (3d Cir. 1981). That task is complicated in this instance by the method by which the trial court determined what would be considered in ruling on defendants' summary judgment motions. Relying on the "preclusive effect" language in Pretrial Order No. 154 the court made its ruling without requiring the defendants to complete their own final pretrial statements and, in the case of most defendants, without the filing of detailed affidavits. NUE and Zenith contend that this procedure was improper, in that it imposed on them a higher burden than Rule 56 requires, or relieved the defendants of a burden which that rule imposes on the moving parties. As to this essentially procedural objection our review involves two aspects: whether the method of fixing the record to be considered on summary judgment by requiring a final pretrial statement with preclusive effect is legally permissible, as to which our review is plenary; and whether, if it is permissible in this instance, it was proper, as to which we review for abuse of the trial court's discretion. A further complication arises from the fact that the trial court made in limine rulings on admissibility of evidence. Those must be reviewed in order to determine whether or not some evidence which was disregarded would raise a material fact issue. Scope of review over these rulings depends in each instance on the nature of the ruling. In some instances the trial court's ruling under Fed. R. Evid. 104 was essentially factual, and as to these our review is by the clearly erroneous standard. In other instances rulings on admissibility of evidence call for the application of a legally set standard, and as to these our review is plenary. Finally, some of the Federal Rules of Evidence, such as Rule 403, recognize that the trial court must exercise discretion in weighing competing considerations. These rulings are reviewed by an abuse of discretion standard. Because the trial court made a large number of evidence rulings it will be necessary to address the question of scope of review separately as to each.

Until we have satisfied ourselves about what evidence should be considered we cannot turn to our principal task, the plenary review of the record to determine whether or not summary judgment should have been granted. If, however, we were to accept the NUE and Zenith argument that the court in its basic approach misconstrued Rule 56 that alone would require a reversal. Thus we will first consider that question.

IV. The Trial Court did Not Err in Considering the Summary Judgment Motions on This Record

NUE and Zenith urge that the trial court violated every principle of Rule 56 because it imposed on the respondents to the motions the initial burden of producing significant probative evidence of the existence of material fact issues, while relieving the moving defendants of the burden of showing initially the absence of such a genuine issue. As a corollary to this argument they contend that the court, in relieving defendants of the obligation to file their FPS's, compounded its erroneous application of Rule 56. According to NUE and Zenith, either detailed affidavits in support of defendants' motions, or FPS's complying with Pretrial Order No. 154 were mandatory. Principal reliance in support of this argument is placed on language in Adickes v. S.H. Kress & Co., 398 U.S. 144, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970):

Because respondent did not meet its initial burden of establishing the absence of a policeman in the store, petitioner here was not required to come forward with suitable opposing affidavits . . . . "The party moving for summary judgment has the burden to show that he is entitled to judgment under established principles; and if he does not discharge that burden then he is not entitled to judgment. No defense to an insufficient showing is required."

Id. at 160-61 (footnote omitted) (quoting 6 J. Moore, Moore's Federal Practice para. 56.22[2], at 2824-25 (2d ed. 1966)). The entire NUE-Zenith argument in this respect, however, is built upon an unfortunate semantical confusion. It is true that the Supreme Court, and even the commentators, have sometimes referred to the "burden," under Rule 56, "of showing the absence of any genuine issue as to all the material facts . . . ." 6 J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice para. 56.15[3], at 56-463 (2d ed. 1983) (footnote omitted). But the term "burden" is one that lends itself readily to confusion because it is used with different meanings in different contexts. In the Rule 56 context it does not refer to the quantum of evidence necessary to establish the existence or nonexistence of facts which as a matter of law are material. In the civil context that quantum is usually a preponderance of the evidence, and such preponderance cannot be resolved under Rule 56. Rather the Rule 56 inquiry is whether the admissible evidence, in the record in whatever form, from whatever source, considered in the light most favorable to the respondent to the motion, fails to establish a prima facie case or defense. E.g., Tomalewski v. State Farm Life Insurance Co., 494 F.2d 882, 884 (3d Cir. 1974). Where, as here, the plaintiffs have produced a preclusive FPS, the ruling is closely analogous to that presented in a motion for a directed verdict at the end of a plaintiff's case. 6 J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice para. 56.15[3], at 56-479 (2d ed. 1983). "If the state of the pretrial record would justify a directed verdict if nothing more were shown at trial, the Rule 56(c) test is satisfied." 2 P. Areeda & D. Turner, Antitrust Law para. 316, at 61 (1978). Moreover, in the Rule 56 context the reference to "burden" is not to which side has the duty to come forward with affidavits or evidence. The court may consider "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any. . . ." Fed. R. Civ. P. 56(c) (emphasis supplied). Rule 56(c) does not exclude the grant of summary judgment on the basis of materials originating entirely with the opponent of the motion. Such material alone may be sufficient to establish that on the basis of the undisputed facts no reasonable inference could be drawn in favor of the respondent with respect to the ultimate facts. Rule 56(b) is explicit on this point. "A party against whom a claim . . . . is asserted . . . . may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof." Fed. R. Civ. P. 56(b). The movant may choose not to submit any evidentiary materials supporting his summary judgment motion. Hubicki v. ACF Industries, Inc., 484 F.2d 519, 522 (3d Cir.1973). If, however, there is any evidence in the record from any source from which a reasonable inference in the respondent's favor may be drawn, the moving party simply cannot obtain a summary judgment, no matter how many affidavits are filed. E.g., Coastal States Gas Corp. v. Department of Energy, 644 F.2d 969, 979 (3d Cir. 1981). The "burden" then is insurmountable.

Properly understood, that is all the "burden" language in Adickes v. S.H. Kress & Co. stands for. In that case a critical element of the plaintiff's cause of action was state action, which would be found only if the private defendant acted in concert with the local police to deny her service because she was at a lunch counter in the company of black students. In her complaint and at her deposition plaintiff alleged that a policeman walked through the store and subsequently arrested her on the street. There were contrary depositions and affidavits, but since plaintiff's deposition contradicted them she could rest on it, for "if a policeman were present, we think it would be open to a jury, in light of the sequence that followed, to infer from the circumstances that the policeman and a Kress employee had a 'meeting of the minds' and thus reached an understanding that petitioner should be refused service." 398 U.S. at 158. Thus Adickes v. S.H. Kress & Co. actually supports the approach taken by the district court in this case, because it recognizes that a party -- either party -- can rely in a Rule 56 proceeding on the contents of the entire record.

A court may not, of course, by a premature resort to a Rule 56 order, deprive the party resisting it of a fair opportunity to present facts essential to justify his opposition. Fed. R. Civ. P. 56(f). One may conceive of situations in which requiring a pretrial statement with preclusive effect might do so even though such orders are expressly authorized by Fed. R. Civ. P. 16. This case, however, does not present that situation. Pretrial Order No. 154 was entered only after years of discovery. It gave NUE and Zenith ample time to outline their entire case, and adequate notice that, with limited exceptions, they must do so by the date specified or forever hold their peace. Paragraph X of the order expressly contemplated summary judgment motions. App., vol. 2 at 675. Thus for all practical purposes, except perhaps the opportunity to observe the credibility of witnesses, the trial court had before it the same record that it would have had at trial at the end of the plaintiffs' case. There was no violation of either the spirit or the letter of Rule 56(f). We explicitly approve, for protracted cases, the trial court's determination embodied in Pretrial Order No. 154 which required preparation of a FPS with preclusive effect, permitted in limine rulings on evidence issues, and created a record to which summary judgment motions might then be addressed. That action is entirely consistent with the provisions of Fed. R. Civ. P. 56(d) directing that the court "shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted" and "shall thereupon make an order specifying the facts that appear without substantial controversy . . . ."

Thus we reject the contentions advanced in Point I of the NUE-Zenith brief that the summary judgment should be reversed because the defendants' affidavits were insufficient to meet some affirmative burden imposed by Rule 56, or because the trial court ruled on the summary judgments before the defendants' FPS's were filed.

V. Evidence Issues

We noted in Part III B above that the court filed three separate opinions making in limine rulings on evidence issues, dealing separately with public records and reports, with other hearsay exceptions, and with expert testimony. Most of those rulings dealt with evidence tendered in the FPS in support of the plaintiffs' conspiracy allegations. The alleged conspiracy had two aspects: concert of action to maintain high prices in Japan, and concert of action to sell at low prices in the United States to the detriment of American manufacturers of televisions and other consumer electronic products. The trial court identified thirteen categories of evidence, and as to each made a ruling on authenticity or admissibility under one or more of the Federal Evidence Rules, and on relevancy. See 505 F. Supp. at 1138-39. Some evidence was held to be admissible, and thus for purposes of summary judgment must be taken into account. That evidence will be referred to in our discussion of the merits of the summary judgment, see 505 F. Supp. at 1138-39, since none of the defendants has urged that the rulings admitting evidence were error. In this Part V, therefore, we address only the evidence which was for one reason or another excluded.

A. The Propriety of In Limine Rulings

Before turning to that task in detail, it is appropriate to note that although neither the Federal Rules of Civil or Criminal Procedure, nor the Federal Rules of Evidence, explicitly authorize pre-trial rulings on admissibility of evidence, we agree completely with those commentators who urge that in limine ruling on evidence issues is a procedure which should, in a trial court's discretion, be used in appropriate cases. See 21 C. Wright & K. Graham, Federal Practice and Procedure § 5037, at 193-95 (1977); Federal Judicial Center, Manual for Complex Litigation § 4.22 (1981) (reprinted in 1 Moore's Federal Practice (2d ed. 1982)); Rothblatt & Leroy, The Motion in Limine in Criminal Trials: A Technique for the Pretrial Exclusion of Prejudicial Evidence, 60 Ky. L.J. 611, 614 (1972). This was an appropriate case, not only because the court's in limine consideration was far more efficient than if the rulings were deferred until the trial, with consequent interruptions, but also because the in limine procedure permitted more thorough briefing and argument than would have been likely had the rulings been deferred. That was particularly so with respect to those rulings requiring district court fact findings under Rule 104.

We recognize that there are countervailing considerations, especially with respect to relevancy rulings under Rule 403 which may be made pre-trial without the benefit of the flavor of the record developed at trial. Nevertheless we hold that the trial court has discretion to make even relevancy rulings pre-trial, subject to review for abuse of such discretion. In this instance, because under the provisions of the FPS the plaintiffs' entire case was before the trial court, no conceivable prejudice occurred from making in limine rulings, and thus there was no abuse of discretion.

B. Standards for Admission of Coconspirator Statements

Another preliminary matter which should be addressed before turning to the court's rulings on exclusion of evidence is the contention by NUE and Zenith that the trial court erred in ruling on the admissibility of statements by one coconspirator against the others. They advance three separate objections to the trial court's treatment of coconspirator statements.

The court held that in determining admissibility of such statements it could consider only independent evidence of the existence of and membership in a conspiracy. 513 F. Supp. at 1179. The first NUE-Zenith contention is that under Rules 801(d)(2)(E) and 104(a) it is not necessary, at least in civil cases, to produce independent evidence of the existence of and membership in the conspiracy before admitting statements made during the course of and in furtherance of it. NUE and Zenith concede that in Glasser v. United States, 315 U.S. 60, 74, 86 L. Ed. 680, 62 S. Ct. 457 (1942), the Supreme Court held that declarations of one conspirator made to a third party in furtherance of the objects of the conspiracy are admissible against an alleged coconspirator, not present when they were made, "only if there is proof aliunde that he is connected with the conspiracy." They urge, however, that with the enactment of the Federal Rules of Evidence the Glasser rule no longer applies. In their view, the statements are no longer hearsay because a statement is not hearsay if "the statement is offered against a party and is . . . . (E) a statement by a coconspirator of a party during the course and in furtherance of the conspiracy." Fed. R. Evid. 801(d)(2)(E). Glasser, they contend, was predicated on the assumption that if such statements were admissible without proof aliunde then "hearsay would life itself by its own bootstraps to the level of competent evidence." 315 U.S. at 75. Since under Rule 801(d)(2)(E) the statements are not hearsay, they reason, the Glasser rule no longer has vitality. NUE and Zenith reinforce their interpretation of Rule 801(d)(2)(E) by reference to Rule 104(a), which provides that in making its determination on admissibility the court is not bound by the rules of evidence.

We reject the contention that the trial court erred in this respect. Neither rule relied upon was intended to change the settled law that there must be independent proof aliunde of the existence of and membership in a conspiracy before coconspirator statements are admissible against a party. We recognize that United States v. Martorano, 561 F.2d 406, 408 (1st Cir. 1977), cert. denied, 435 U.S. 922, 55 L. Ed. 2d 515, 98 S. Ct. 1484 (1978), suggests in dicta that Rule 104(a) casts doubt on the Glasser rule and that the Court of Appeals for the Sixth Circuit has rejected Glasser, see James R. Snyder Co. v. Associated General Contractors, 677 F.2d 1111, 1117 (6th Cir.), cert. denied, 459 U.S. 1015, 103 S. Ct. 374, 74 L. Ed. 2d 508 (1982). Since the Federal Rules of Evidence were adopted, however, all other courts of appeal have assumed that in deciding whether to admit coconspirator statements the judge may only consider evidence independent of them. 1 J. Weinstein & M. Berger, Weinstein's Evidence para. 104[05], at 104-45-46 (1982). Since the effective date of the Evidence Rules, this court has continued to apply the Glasser rule. United States v. Ammar, 714 F.2d 238, 246 n.3 (3d Cir. 1983); United States v. Continental Group, Inc., 603 F.2d 444, 457 (3d Cir. 1979), cert. denied, 444 U.S. 1032, 62 L. Ed. 2d 668, 100 S. Ct. 703 (1980); United States v. Trowery, 542 F.2d 623, 627 (3d Cir. 1976) (per curiam), cert. denied, 429 U.S. 1104, 51 L. Ed. 2d 555, 97 S. Ct. 1132 (1977); United States v. Trotter, 529 F.2d 806, 811 (3d Cir. 1976). Arguably these decisions do not bind this panel because they do not specifically address the question whether the Federal Evidence Rules overruled Glasser. But if the question is open, we believe that neither the language of the rules relied upon nor sound policy supports the NUE-Zenith position.

Rule 801(d)(2)(E) says that a coconspirator statement is not hearsay, but says nothing about how coconspirator status is established. That status requires a preliminary factual inquiry, to which Rule 104(a) undoubtedly applies. But the fact that Rule 104(a) permits the trial court to resort to hearsay does not speak to the Glasser rule requirement of independent evidence. Granting that the court can rely on hearsay in making the determination of coconspirator status, the evidence relied on must still be independent of the statement. Otherwise, all parties to a lawsuit, civil or criminal, may be exposed to the risk of admission against them of "idle chatter of criminal partners as well as inadvertently misreported and deliberately fabricated evidence." 4 J. Weinstein & M. Berger, Weinstein's Evidence para. 801(d)(2)(E)[01], at 801-171 (1981) (footnote omitted).

The trial court held that before it could admit coconspirator statements under Rule 801(d)(2)(E) it must find, by a preponderance of the independent evidence that the conspiracy relied upon for admissibility existed, and that each party against whom the statement is offered was a member of it. 513 F. Supp. at 1179. NUE and Zenith urge that the trial court erred in requiring that the independent evidence of coconspirator status satisfy him by a preponderance of the evidence. They concede that, at least in criminal cases, the law in this circuit is settled. In criminal cases we require that the trial court apply a preponderance of the evidence standard, e.g., United States v. Ammar, 714 F.2d at 249-51; United States v. Trowery, 542 F.2d at 627, although other courts require a different standard.*fn31 It is true that no opinion of this court has expressly held that the preponderance of evidence test applies to determination of coconspirator status in civil cases, although the Trowery court seems to have assumed so. 542 F.2d at 626. We are not persuaded that a different standard of proof for this preliminary question in civil cases should be adopted. The preponderance of evidence standard is commonly used for preliminary evidence questions in civil cases. Saltzburg, Standards of Proof and Preliminary Questions of Fact, 27 Stan. L. Rev. 271, 273-74 (1975). While there may be merit in the position of those courts which have, in criminal cases, raised the threshold standard to substantial evidence, we see none in the position that for either civil or criminal cases the responsibility of the court in making the Glasser determination should be decreased.

NUE and Zenith urge that there is a valid distinction, for purposes of the coconspirator statement rule, between civil and criminal cases, because in the latter the jury must find guilt beyond a reasonable doubt and thus the court, finding the existence of an agreement by a preponderance of the evidence, is not usurping the function of the jury. In civil cases, on the other hand, if both the preliminary question and the ultimate question are to be decided by the preponderance of the evidence standard, the court may, to the disadvantage of the plaintiff, usurp the jury's function. One fallacy in that reasoning, however, is that the court's determination of the ultimate issue is not binding on the jury. Another fallacy is that the two questions are not the same. In order to admit the statement the court need only find that the speaker and the party against whom it is offered were engaged in a common undertaking for the advancement of which the statement was made. The jury, or court if the case is tried non-jury, must also find that the common undertaking was unlawful and can rely on the contents of the statement for that purpose.

We recognize that exclusion of statements by alleged coconspirators may have a severely damaging effect on a plaintiff's case in which concert of action is an essential element of the cause of action. Evidence rulings often have such an effect, however, and the admission against defendants, in proof of illegality, of statements of third parties without a proper foundation may be equally damaging. Thus we agree with the recent decision of the Court of Appeals for the Sixth Circuit rejecting the distinction between civil and criminal cases which NUE and Zenith urge. James R. Snyder Co. v. Associated General Contractors, 677 F.2d 1111, 1117 (6th Cir.), cert. denied, 459 U.S. 1015, 103 S. Ct. 374, 74 L. Ed. 2d 508 (1982).

Finally, NUE and Zenith contend that in deciding on the admissibility of coconspirator statements the trial court erred in requiring a showing not only that there was a combination between the defendants, but also that the combination was unlawful. If the trial court had so ruled, that ruling would be error, for in order to admit coconspirator statements "it is necessary to show by independent evidence that there was a combination between them, . . . . but it is not necessary to show by independent evidence that the combination was criminal or otherwise unlawful." Hitchman Coal & Coke Co. v. Mitchell, 245 U.S. 229, 249, 62 L. Ed. 260, 38 S. Ct. 65 (1917); see United States v. Trowery, 542 F.2d at 626-27. Our examination of that portion of the trial court's opinion dealing with admissibility of coconspirator statements, however, convinces us that no such additional burden was imposed. The court said:

We simply make the factual finding that plaintiffs have not established by a preponderance of independent evidence that any of the defendants entered into an agreement . . . .

513 F. Supp. at 1298.

We conclude, therefore, that the trial court applied the correct rule: coconspirator statements can be admitted only if the court is convinced by a preponderance of evidence independent of the statements that there was a joint undertaking, that the statement was made to advance that undertaking, and that the party against which the statements are offered was a party to that undertaking. All of the independent record evidence must, of course, be considered.

The joint undertaking need not be identical to the conspiracy relied upon as a basis for liability. Rule 402 affords adequate protection against admission of statements in furtherance of joint undertakings that are remote and unrelated to the conspiracy relied upon as a basis for liability. It is well established, for example, that there need not be a conspiracy count in the indictment before coconspirator statements may be admitted. 4 J. Weinstein & M. Berger, Weinstein's Evidence para. 801(d)(2)(E)[01], at 801-166 (1981); Kay v. United States, 421 F.2d 1007, 1010 (9th Cir. 1970); United States v. Cryan, 490 F. Supp. 1234, 1240 (D.N.J.), aff'd, 636 F.2d 1211 (3d Cir. 1980). Moreover, coconspirator statements admissible on conspiracy counts may be considered on substantive counts as well. United States v. Cahalane, 560 F.2d 601, 605 n.4 (3d Cir.), cert. denied, 434 U.S. 1045, 54 L. Ed. 2d 796, 98 S. Ct. 890 (1977). See also, United States v. Mendoza, 473 F.2d 692, 695 (5th Cir. 1972) (coconspirator exception applicable to criminal prosecutions and not limited to prosecutions for conspiracy); United States v. Accardi, 342 F.2d 697, 700 (2d Cir.), cert. denied, 382 U.S. 954, 15 L. Ed. 2d 359, 86 S. Ct. 426 (1965). The reasoning of these cases suggests that if, for example, a price fixing conspiracy in Japan were to be found by a preponderance of independent evidence, the statements of any of its members made in furtherance of it would, if relevant, be admissible against all members of it for all purposes.*fn32

The district court made a Rule 104(a) finding that NUE and Zenith had not established "by a preponderance of independent evidence that any of the defendants engaged in the 'unitary ' conspiracy alleged by plaintiffs (or, for that matter, either the home market or export facets thereof)." 513 F. Supp. at 1299. We are unable to affirm the exclusion of coconspirator statements on the basis of this finding, however, because, as noted hereafter, much independent evidence bearing on the existence of joint undertakings by the defendants, particularly with respect to price fixing in Japan, was erroneously excluded. The admissibility of coconspirator statements must on remand be reconsidered by the trial court in light of all the independent evidence in the record.

C. Rule 803(8)(C) Materials

Included in the FPS are a number of documents originating with public offices or agencies, which NUE and Zenith contend are properly admitted for the truth of the matter asserted therein as hearsay exceptions under Rule 803(8)(C). That rule admits "records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth . . . . (C) in civil actions . . . . factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness." Fed. R. Evid. 803(8). Five categories of documents were tendered:

1. Six documents prepared in proceedings instituted by the United States Treasury Department under the 1921 Antidumping Act, 19 U.S.C. § 160 et seq. (repealed 1980);

2. Eighteen documents prepared in proceedings before the United States International Trade Commission under the Trade Expansion Act of 1962, 19 U.S.C. § 1801 et seq. and its successor statute, the Trade Act of 1974, 19 U.S.C. § 2101 et seq.;

3. Two documents prepared in proceedings before the Japanese Fair Trade Commission under the Japanese Anti-Monopoly Law;

4. Findings of fact made by Judge Higginbotham in the instant case in ruling on motions to dismiss for lack of personal jurisdiction, improper venue, and improper service of process; and

5. Two documents, one of which was prepared for the Statistical Office of the United Nations, and the other a report of the Organization for Economic Cooperation and Development.

See 505 F. Supp. at 1138-39. Of these twenty-nine documents the trial court ruled inadmissible all but the two documents in the fifth category, identified as DSS # 46 and # 47. Many of the excluded documents were also relied upon by plaintiffs' experts in reaching the opinions which they expressed, and thus received the court's attention a second time when it considered, pursuant to Rule 703, the admissibility of those opinions.*fn33

1. The Court's General Approach to Rule 803(8)(C)

Before ruling on specific public records and reports the trial court outlined a general approach toward the consideration of Rule 803(8)(C) materials. The court noted first that the rule permits only the admission of factual findings, including evaluative findings, but not legal conclusions, and not underlying exhibits and data.*fn34 Turning to the trustworthiness proviso in the rule, the court identified eleven factors which would be taken into consideration in determining trustworthiness, and hence admissibility. Four of these are the factors listed in the Notes of the Advisory Committee on Proposed Revisions to Rule 803(8)(C):

Factors which may be of assistance in passing upon the admissibility of evaluative reports include; (1) the timeliness of the investigation . . . .; (2) the special skill or experience of the official . . . .; (3) whether a hearing was held and the level at which conducted . . . .; (4) possible motivational problems suggested by Palmer v. Hoffman, 318 U.S. 109, 63 S. Ct. 477, 87 L. Ed. 645 (1943).

(citations omitted). The Advisory Committee's reference to the motivational problems suggested by Palmer v. Hoffman is to the bias which may arise when a report is compiled for the purpose not of finding the facts in a neutral manner, but in anticipation of litigation. To the four factors mentioned by the Advisory Committee, the trial court added seven more:

(1) The finality of the agency findings, i.e., the state of the proceedings at which the findings were made (whether they are subject to subsequent proceedings or de novo review), and the likelihood of modification or reversal of the findings.

(2) The extent to which the agency findings are based upon or are the product of proceedings prevaded by receipt of substantial amounts of material which would not be admissible in evidence (e.g. hearsay, confidential communications, ex parte evidence), and the extent to which such ...


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