## Facts

- Zenith Radio Corp. and National Union Electric Corp. (NUE), U.S. television manufacturers, sued 21 Japanese and Japanese-controlled corporations that manufactured and sold consumer electronic products, primarily televisions.
- Plaintiffs alleged a long-running horizontal conspiracy to drive U.S. competitors from the U.S. market through predatory pricing of exported televisions.
- The alleged scheme included supracompetitive pricing in Japan to fund low U.S. export prices, distribution limits described as a “five company rule,” and “check prices” tied to export pricing arrangements.
- Plaintiffs brought claims under §§ 1 and 2 of the Sherman Act, § 2(a) of the Robinson-Patman Act, and § 73 of the Wilson Tariff Act.
- After extensive discovery, the district court required each side to identify trial exhibits, excluded much of plaintiffs’ proffered proof as inadmissible, and granted summary judgment for defendants, finding no genuine dispute of material fact on the alleged conspiracy.
- The Third Circuit reversed, holding that significant excluded evidence was admissible and that a reasonable factfinder could infer a conspiracy to depress U.S. prices, funded by excess profits in Japan.

## Issues

1. What showing must an antitrust plaintiff make at summary judgment to permit a reasonable inference of a § 1 Sherman Act conspiracy from circumstantial evidence.
2. Whether evidence equally consistent with lawful independent conduct and unlawful agreement is sufficient to defeat summary judgment.
3. How economic plausibility and the need to show antitrust injury affect inference-drawing at the Rule 56 stage.

## Decision

- The Supreme Court reversed the Third Circuit and reinstated summary judgment for defendants.
- To defeat summary judgment on a § 1 conspiracy claim, plaintiffs must present evidence that tends to exclude the possibility that defendants acted independently.
- Inferences favoring the nonmovant must be reasonable; where the alleged scheme is economically implausible, more persuasive evidence is required to support an inference of conspiracy.
- The record evidence cited as “direct” proof (supracompetitive Japanese pricing, the five-company rule, and check prices) did not, by itself, establish a U.S. predatory-pricing conspiracy or a cognizable basis for antitrust damages.
- Plaintiffs’ circumstantial proof did not sufficiently separate unlawful collusion from lawful competition or from coordinated conduct that did not inflict antitrust injury on plaintiffs.

## Legal Principles

- Summary judgment is appropriate when there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law; antitrust plaintiffs must still meet Rule 56 with admissible evidence.
- In § 1 cases relying on circumstantial proof, the plaintiff must present evidence that tends to exclude independent action; evidence consistent with both conspiracy and lawful conduct is inadequate without additional proof making conspiracy the more reasonable inference.
- Courts may consider economic logic in assessing whether proposed inferences are reasonable, particularly when the alleged conduct (such as prolonged multi-firm predatory pricing with uncertain recoupment) appears unlikely.
- Proof of agreement is not enough absent a showing of antitrust injury; evidence must support a harmful, unlawful conspiracy rather than benign coordination or conduct without cognizable competitive harm.

## Conclusion

The Court required Sherman Act § 1 plaintiffs opposing summary judgment to offer evidence that makes conspiracy a reasonable inference by tending to rule out independent action, and held that ambiguous proof supporting an economically strained predatory-pricing theory cannot, without more, proceed to trial.


Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)