This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
A class of retail customers alleged that five major cigarette manufacturers engaged in an unlawful conspiracy to fix cigarette prices in New Mexico over a seven-year period starting in 1993. The plaintiffs argued that the defendants coordinated to control competition in the discount cigarette market, thereby maintaining supracompetitive pricing for premium cigarettes (paras 2-3, 26).
Procedural History
- District Court of Santa Fe County: Granted summary judgment in favor of all defendants, finding insufficient evidence of a conspiracy to fix prices (headnotes, para 1).
Parties' Submissions
- Plaintiffs-Appellants: Argued that the defendants conspired to fix prices by coordinating price increases for both premium and discount cigarettes, thereby reducing competition and maintaining supracompetitive profits. They relied on expert testimony to show that the observed pricing behavior exceeded what could be explained by lawful conscious parallelism (paras 26, 32).
- Defendants-Appellees: Denied any conspiracy and argued that the observed pricing behavior was consistent with lawful conscious parallelism in an oligopolistic market. They emphasized the absence of direct evidence of a conspiracy and pointed to prior federal court decisions rejecting similar claims (paras 20-21, 13).
Legal Issues
- Did the plaintiffs present sufficient evidence to create a genuine issue of material fact regarding the existence of a conspiracy to fix cigarette prices?
- Can the defendants' pricing behavior be explained by lawful conscious parallelism, or does it suggest unlawful concerted action?
Disposition
- Summary judgment affirmed for Lorillard and Liggett due to insufficient evidence of conduct inconsistent with conscious parallelism (para 46).
- Summary judgment reversed for Philip Morris, Brown & Williamson, and R.J. Reynolds, allowing the case to proceed against these defendants (para 46).
Reasons
Per Alarid J. (Fry and Kennedy JJ. concurring):
Summary Judgment Standards: The court emphasized that New Mexico courts apply a stringent standard for summary judgment, requiring the movant to show no genuine issue of material fact. The court conducted a de novo review of the record (paras 12, 16-17).
Antitrust Principles: The court noted that the New Mexico Antitrust Act is interpreted in harmony with federal antitrust law. While conscious parallelism is not unlawful, plaintiffs must present evidence that tends to exclude the possibility of independent action (paras 18-22).
Plaintiffs' Evidence: The plaintiffs' expert, Dr. Leffler, opined that the observed pricing behavior was highly unlikely to result from independent competitive behavior. The court found this testimony sufficient to create a genuine issue of material fact regarding the existence of a conspiracy among Philip Morris, Brown & Williamson, and R.J. Reynolds (paras 32-33).
Conscious Parallelism: The court distinguished the complex, multi-variable pricing behavior in this case from the simpler price leadership seen in prior cases. It found that the defendants' reliance on conscious parallelism as an explanation was less plausible given the evidence (paras 34-36).
Lorillard and Liggett: The court affirmed summary judgment for these defendants because the plaintiffs' expert conceded that their conduct was consistent with lawful conscious parallelism (para 46).
Federal Decisions: The court acknowledged prior federal decisions rejecting similar claims but noted that the record in this case included additional evidence, such as Dr. Leffler's testimony, which was not before the federal courts (paras 38-39).
In conclusion, the court allowed the case to proceed against three defendants while affirming summary judgment for the remaining two.