## Facts

- Impro Products, Inc., a producer of animal biologics made from whey antibodies, marketed its products to dairy farmers as alternatives to antibiotics.
- The animal health industry is regulated: antibiotics are regulated as drugs under the Food, Drug, and Cosmetic Act; many animal biologics are regulated by the USDA under the Virus, Serum and Toxin Act when distributed in interstate commerce.
- Dr. John B. Herrick, a USDA extension veterinarian and Iowa State University professor, advised farmers on animal health products.
- Herrick entered into separate consulting agreements with multiple animal health companies that sold antibiotics.
- Impro alleged Herrick and the companies disparaged Impro’s products and took actions favorable to antibiotics, including advising against Impro’s biologics and encouraging scrutiny of Impro’s regulatory and scientific support.
- The record showed each consulting agreement was bilateral; the companies were not shown to have known of Herrick’s consulting work for the others, nor to have communicated with each other about Impro’s products before litigation.
- Impro sued under Sherman Act §§ 1 and 2, alleging a hub-and-spoke conspiracy with Herrick as the “hub” and the companies as “spokes,” aimed at suppressing Impro as a competitor.
- The district court granted summary judgment for defendants, finding no evidence of conspiracy; Impro appealed.

## Issues

1. Whether the evidence created a genuine issue of material fact that defendants agreed to restrain trade in violation of Sherman Act § 1, including under a hub-and-spoke theory.
2. Whether the evidence created a genuine issue of material fact of a conspiracy to monopolize under Sherman Act § 2.

## Decision

- The Eighth Circuit affirmed summary judgment for all defendants.
- Impro failed to present direct or substantial circumstantial evidence of an agreement or coordinated action to suppress Impro.
- Evidence of separate consulting relationships, motive, and conduct hostile to Impro’s products did not support an inference of a single overall plan, particularly without proof the corporate defendants knew of each other’s involvement or communicated about Impro.
- Because the same alleged agreement underlay the § 2 claim, the failure to prove concerted action also defeated the conspiracy-to-monopolize theory.

## Legal Principles

- Sherman Act § 1 requires proof of an agreement; unilateral conduct, even if harmful to a competitor, is not actionable absent concerted action.
- A hub-and-spoke conspiracy requires evidence of a “rim” connecting the spokes—knowledge and participation by the spokes in a single overall plan—beyond separate vertical relationships with the alleged hub.
- Motive and opportunity, parallel incentives, and parallel hostility are insufficient to survive summary judgment without evidence tending to exclude independent action.
- Legitimate, bilateral consulting arrangements do not, without additional evidence, permit an inference of an unlawful combination to restrain trade.
- Sherman Act § 2 conspiracy-to-monopolize claims require proof of a combination or conspiracy; absent an agreement, the claim fails.

## Conclusion

The court held that independent consulting contracts and criticism of a competitor’s product, without proof of interfirm knowledge, communications, or coordinated commitment to a common plan, do not establish the agreement element required for Sherman Act §§ 1 and 2, warranting summary judgment for defendants.


Impro Prods., Inc. v. Herrick, 715 F.2d 1267 (8th Cir. 1983)