FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. Richard G. Stearns, U.S. District Judge]
Richard Wolfram, with whom Jan R. Schlichtmann, Orestes G.
Brown and Metaxas Brown Pidgeon LLP, were on brief, for
M. Faust, with whom Law Office of John M. Faust, PLLC,
William E. Lawler, III, Ralph C. Mayrell and Vinson &
Elkins LLP, were on brief, for appellees Dart Container
Corporation and Solo Cup Company.
M. Cowley, with whom Duane Morris, LLP, was on brief, for
appellee Dolco Packaging.
Richard A. Sawin, Jr., Richard E. Bennett and Michienzie
& Sawin LLC, on brief for appellee Pactiv Corporation.
T. Lepore, III, Michael T. Maroney, Benjamin M. McGovern,
Scott A. Moore and Holland & Knight LLP, on brief for
appellee American Chemistry Council.
Howard, Chief Judge, Torruella and Barron, Circuit Judges.
TORRUELLA, Circuit Judge.
Evergreen Partnering Group, Inc. ("Evergreen")
appeals a summary judgment from the United States District
Court for the District of Massachusetts against its Sherman
Act section 1, 15 U.S.C. § 1, claim. Under its business
model, Evergreen collected used polystyrene products,
processed them into a recycled polystyrene resin
("recycled resin"), and sold its resin to
converters to use in a "green foam" line of
products. According to Evergreen, the five largest converters
of polystyrene products -- Dart Container Corporation
("Dart"), Dolco Packaging ("Dolco"),
Genpak, LLC ("Genpak"), Pactiv Corporation
("Pactiv"), and Solo Cup Company ("Solo")
-- through the trade association American Chemistry Council
("ACC") (hereinafter referred to collectively as
"the defendants") refused in concert to deal with
Evergreen in order to prevent polystyrene recycling from
becoming viable and maintain their respective market
positions. On summary judgment, the district court
concluded that Evergreen failed to present evidence that
tended to exclude the possibility that each polystyrene
manufacturer independently chose not to partner with
Evergreen as required by Matsushita Electric Industrial
Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574 (1986). We agree with the district
court's reasoning and affirm.
Forrest founded Evergreen in 2000. Prior to the advent of
Evergreen, other companies tried to recycle polystyrene
products but had difficulty turning a profit. Evergreen
envisioned that it could succeed where others had failed by
obtaining revenue from three different sources.
Evergreen would charge an "environmental fee" to
large end users (such as school districts that used
polystyrene food trays in their cafeterias) for collecting
their used polystyrene products. Because these institutions
often paid waste disposal fees to transport their used
polystyrene products to landfills, Evergreen believed they
would be willing to pay the environmental fee. After
collecting the used polystyrene products, Evergreen would
transport them to its recycling plants to process into a
recycled resin. Selling this recycled resin to polystyrene
converters would form the basis of Evergreen's second
revenue stream. These converters would use Evergreen's
resin to create new polystyrene products and sell them to
customers. As its third revenue stream (and of particular
relevance to its lawsuit), Evergreen sought to charge
converters a commission on the products sold containing its
resin. Evergreen hoped the commission would keep the price of
its resin competitive with virgin resin and believed the
commission reflected the market's willingness to pay a
premium for "green" products. Evergreen also
believed its green foam products would bring the converters
new customers because many of the suppliers of the used
polystyrene products would also be interested in purchasing
furtherance of its goal to produce recycled resin, Evergreen
began setting up its first independent recycling plant in
Norcross, Georgia, in February 2005. Starting in 2006, Gwinnett
County Public Schools ("Gwinnett Schools"), also in
Georgia, began paying Evergreen to collect its used
polystyrene lunch trays.
same time, Evergreen sought out partnerships with polystyrene
converters. Between 2002 and 2005, Evergreen reached out to
several small polystyrene converters but had little success.
Evergreen then began targeting what it believed to be the
five main national polystyrene converters -- Dart, Dolco,
Genpak, Pactiv, and Solo -- the defendants in this case.
on, Dolco and Genpak showed interest in working with
Evergreen. In July 2005, Forrest approached Dolco's
General Manager for the Midwest Division, Norman Patterson,
about the distribution company Sysco's interest in an
"Earth Plus" product line containing
Evergreen's resin. Initially, Patterson appeared
receptive and representatives from Sysco, Dolco, and
Evergreen met about a possible deal in November 2005. Dolco
made a formal proposal to Sysco in December and told
Evergreen it would be willing to pay a royalty to use its
recycled resin as long as the relationship could be
profitable. Sysco, however, eventually backed out and the
deal fell through.
towards the end of 2006, Evergreen met with Genpak. Genpak
began making lunch trays with Evergreen's resin and
submitted a bid to Gwinnett Schools (who was already paying
Evergreen to remove their trays) to supply it with trays for
the 2007-2008 academic year. Gwinnett Schools subsequently
selected Genpak's $16.97 per case bid over Pactiv's
$18.97 per case bid.
2007, Forrest approached Genpak's president, Jim Reilly,
about financing a new Evergreen recycling plant in California
as well as upgrades to Evergreen's Norcross facility.
Reilly told Forrest he should submit his funding proposal to
the Plastics Foodservice Packaging Group ("Plastics
Plastics Group is a subgroup of the ACC that focused on
promoting plastic foodservice packaging. All five of the
converter defendants were members of the Plastics Group at
one time or another. By 2007, the Plastics Group was
particularly concerned with local and state initiatives to
ban polystyrene products due to the perception that
polystyrene was not recyclable.
14, 2007, the Plastics Group held a conference call with
Forrest to discuss Evergreen's intention to expand to
California. About a week later, Forrest submitted two
proposals to the Plastics Group's Senior Director,
Michael Levy, requesting that the Plastics Group help
Evergreen expand its operations to California.
Plastics Group held a conference call between its members on
May 31, 2007, to discuss Forrest's proposals. Evergreen
alleges that during this conference call, the defendants not
only rejected funding Evergreen's proposals, but also
agreed that no individual converter would enter any deal with
Evergreen that involved the payment of commissions. In
addition, Evergreen alleges that at this meeting the
defendants agreed to promote a sham competitor called
Packaging Development Resources of California, LLC
("PDR") -- a California-based polystyrene recycler
whose business model relied entirely on selling its recycled
resin and had no commission component -- to block
Evergreen's access to polystyrene end users.
Events After the Alleged Conspiracy Began
the May 31, 2007, conference call, Levy notified Forrest that
the Plastics Group had rejected all of his proposals. Forrest
submitted two additional proposals to the Plastics Group,
which were also rejected. Without funding, Evergreen did not
build a California recycling plant.
intervening months, Evergreen continued to negotiate with the
defendants to try to obtain an agreement that included both
the purchase of resin and the payment of commissions. Genpak
and Dolco entered a joint funding agreement with Evergreen in
July 2007, each agreeing to provide Evergreen with $75, 000
and to purchase any "acceptable quality" resin that
Evergreen produced for $0.85 per pound but rejecting any
commission requirement. Evergreen also began negotiations
with Solo. Solo purchased resin to test in May 2008 but
stated it would not accept any deal that included a
commission payment. In addition, Pactiv and Dart tested
samples of Evergreen's resin throughout 2008 and 2009
without reaching an agreement.
also found itself largely unable to attract customers who
would pay Evergreen to remove their waste products or pay a
premium for polystyrene products containing recycled resin.
Although Genpak bid to supply Gwinnett Schools with trays
containing Evergreen's resin for the 2008-2009 school
year, it raised its price. Pactiv, in contrast, lowered its
bid and won. No further purchase agreements between
Evergreen, Genpak, or Dolco were executed.
2008, Evergreen shut down its Norcross facility and opened a
smaller recycling plant in Lawrenceville, Georgia. Evergreen
subsequently shut down the smaller plant in October 2008 and
2011, Evergreen and Forrest filed a complaint in district
court alleging that the defendants agreed to boycott
Evergreen in violation of section 1 of the Sherman Antitrust
Act, 15 U.S.C. § 1. The district court granted the
defendants' motion to dismiss, which Evergreen (but not
Forrest) appealed to this court.
reversed in Evergreen Partnering Groupv.Pactiv Corp. ("Evergreen I"), 720
F.3d 33 (1st Cir. 2013). Our opinion highlighted several
facts that we viewed, if proven, as sufficient "to
establish a context for plausible agreement in the form of
industry information and facilitating practices."
Id. at 48. These facts included Evergreen's
allegations that the polystyrene industry was "highly
concentrated"; that the defendants' membership in
the Plastics Group served "as a facilitating
practice"; and that the defendants' behavior
appeared to be against self-interest -- both because
Evergreen claimed its business model was cost-neutral and
because PDR was a sham competitor. Id. at 48-50.
Accordingly, we vacated and remanded ...