On Jan. 3, 2014, the United States Court of Appeals for the Sixth Circuit reversed a district court’s grant of summary judgment to the defendants in an antitrust class action alleging a market-division and output-restriction conspiracy involving raw and processed milk. The court’s detailed decision addressed four principal issues: (1) whether the conspiracy as alleged would have constituted a per se violation, or instead would have been subject to the less stringent “rule of reason” analysis; (2) whether or not such a rule of reason analysis could appropriately be limited to a “quick look” analysis in that case; (3) whether the district court erred in excluding the plaintiffs’ expert testimony regarding the relevant geographic market — a necessary element of a full rule of reason analysis — under Daubert; and (4) whether the plaintiffs’ expert testimony adequately established “antitrust injury.”

The Sixth Circuit’s review of the per se issue was complicated by the hybrid horizontal and vertical aspects of the alleged conspiracy, which the plaintiffs claimed followed from a 2001 merger of the two largest milk processing companies in the United States and their pre- and post-merger relationships with raw milk suppliers. Ultimately, however, it agreed with the district court that the essence of the claimed anticompetitive agreement was vertical (i.e., between the milk processer and raw milk supplier defendants), and that the rule of reason analysis therefore was appropriate.

Turning to the second issue, the Sixth Circuit noted that the district court had not actually determined whether a “quick look” or a full-blown rule of reason analysis was warranted, and remanded that issue with comments appearing to suggest that a “quick look” would be sufficient. After extensive analysis of the plaintiffs’ expert evidence, including detailed review of the deposition testimony of the plaintiffs’ experts, the Sixth Circuit also concluded that the district court had erred both in excluding the plaintiffs’ evidence on the applicable geographic market and in concluding that their expert evidence failed to establish antitrust injury.