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Cosmetic Gallery Inc v. Schoeneman Corp, 05-3679 (2007)

Court: Court of Appeals for the Third Circuit Number: 05-3679 Visitors: 15
Filed: Jul. 19, 2007
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2007 Decisions States Court of Appeals for the Third Circuit 7-19-2007 Cosmetic Gallery Inc v. Schoeneman Corp Precedential or Non-Precedential: Precedential Docket No. 05-3679 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2007 Recommended Citation "Cosmetic Gallery Inc v. Schoeneman Corp" (2007). 2007 Decisions. Paper 653. http://digitalcommons.law.villanova.edu/thirdcircuit_2007/653 This decision is brought to you for free and
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                                                                                                                           Opinions of the United
2007 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-19-2007

Cosmetic Gallery Inc v. Schoeneman Corp
Precedential or Non-Precedential: Precedential

Docket No. 05-3679




Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2007

Recommended Citation
"Cosmetic Gallery Inc v. Schoeneman Corp" (2007). 2007 Decisions. Paper 653.
http://digitalcommons.law.villanova.edu/thirdcircuit_2007/653


This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
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                                    PRECEDENTIAL

  UNITED STATES COURT OF APPEALS
       FOR THE THIRD CIRCUIT


                 No. 05-3679


        COSMETIC GALLERY, INC.
  d/b/a THE SALON AT IMAGE BEAUTY,
                               Appellant
                  v.

       SCHOENEMAN CORPORATION
  d/b/a SCHOENEMAN BEAUTY SUPPLY;
   F. DALE SCHOENEMAN, individually,
     jointly, severally and in the alternative


On Appeal from the United States District Court
       for the District of New Jersey
     D.C. Civil Action No. 01-cv-4896
       (Honorable Robert B. Kugler)


            Argued April 24, 2007
          Before: SCIRICA, Chief Judge, FUENTES
              and ALARCÓN*, Circuit Judges.

                      (Filed: July 19, 2007)

STEPHEN J. DeFEO, ESQUIRE (ARGUED)
Brown & Connery
360 Haddon Avenue
Westmont, New Jersey 08108
      Attorney for Appellant

BURT M. RUBLIN, ESQUIRE (ARGUED)
Ballard, Spahr, Andrews & Ingersoll
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103
       Attorney for Appellees


                  OPINION OF THE COURT


SCIRICA, Chief Judge.
      At issue in this civil antitrust suit alleging a group boycott
is whether plaintiff offered sufficient evidence to survive


     *
    The Honorable Arthur L. Alarcón, United States Circuit
Judge for the Ninth Judicial Circuit, sitting by designation.

                                 2
defendants’ motion for summary judgment. We will affirm the
grant of summary judgment.
                               I.
      Plaintiff Cosmetic Gallery, Inc. is a New Jersey
corporation that owns and operates a hair salon and retails hair
care products and professional beauty supplies. Defendant
Schoeneman Corporation is a Pennsylvania corporation, owned
and operated by co-defendant F. Dale Schoeneman, and does
business as Schoeneman Beauty Supply, a wholesale distributor
of beauty supplies to salons in Pennsylvania, New Jersey,
Delaware and West Virginia.
       Cosmetic Gallery filed this suit in New Jersey Superior
Court, alleging violations of the New Jersey Antitrust Act, N.J.
Stat. Ann. § 56:9-3, statutory and common law unfair
competition, N.J. Stat. Ann. § 56:4-1, wrongful refusal to deal,
tortious interference with contractual relations, and tortious
interference with prospective economic advantage. Defendants
removed to the United States District Court for the District of
New Jersey on diversity grounds.1

   1
   The District Court had jurisdiction under 28 U.S.C. § § 1332
and 1441. We have jurisdiction over this appeal of a final order
of the District Court under 28 U.S.C. § 1291. We review a
district court’s decision to grant summary judgment de novo,
“employing the same legal standards the [district] court was
required to use.” Intervest v. Bloomberg, 
340 F.3d 144
, 158 (3d
Cir. 2003).

                               3
                                 II.
          This suit arises from the business of selling and
distributing certain lines of hair-care products that are designated
as “salon-only” lines and products. Manufacturers of salon-only
lines and products routinely place restrictions on distributors that
limit resale only to professional hairstylists or hair salons,
making these the only outlets from which an end use customer
can buy the exclusive products. The restrictions, which
effectively limit the availability of the products, serve to increase
the cachet and prestige of these salon-only product lines, and
enable their sale as exclusive premium products. Although they
differ, distribution agreements typically require that in order to
purchase salon-only products from a distributor, a retailer must
have a salon license and must derive some minimum amount of
revenue from salon business, and that salon services—as opposed
to product sales—must account for between 30 percent and 50
percent of its revenue. Many agreements also prohibit
distribution to any salons or persons who have engaged in
“diversion” of salon-only products. In this context, diversion is
the sale of salon-only products outside the permitted channels
expressly provided in manufacturer-distributor contracts, such as
sales by a distributor to a retailer who is not connected to a
professional hair salon or licensed hairstylists. The distribution
agreements often include sanctions and penalties, including
termination of distribution contracts, should the products be
diverted outside authorized channels.
       Cosmetic Gallery, a corporation owned and operated by


                                 4
Charles Eisenberg, is a retailer of hair care products. Cosmetic
Gallery also operated two retail stores in southern New Jersey
under the name Image Beauty. Cosmetic Gallery asserts it
intended to convert or open three facilities under a different
business model that included both salon and retail sales services.
To that end, Eisenberg had a functioning salon in one of the
Image Beauty locations, though it accounted for less than 5
percent of that store’s revenue; the other two salons never
materialized.
       As part of its intended business model, Cosmetic Gallery
sought contracts with several distributors of salon-only hair-care
lines and products doing business with independent salons and
professional hair stylists in southern New Jersey. Among these
distributors were Schoeneman Beauty Supply, Inc., East Coast
Salon Services, Emiliani Enterprises, and Goldwell Mid-Atlantic.
In March 2001, Cosmetic Gallery signed a salon agreement with
Emiliani Enterprises to buy Paul Mitchell products. But Emiliani
Enterprises soon canceled the agreement because the company
had learned Cosmetic Gallery was selling diverted Paul Mitchell
products. Cosmetic Gallery contends this cancellation was at
defendants’ direction.
       Unable to secure contracts for salon-only brands from the
area distributors, Cosmetic Gallery sued Schoeneman Beauty
Supply and F. Dale Schoeneman, its owner, alleging the
defendants led and enforced a group boycott of Cosmetic Gallery
among hair care product distributors. In addition to Schoeneman
Beauty Supply, Schoeneman also owns fifty percent of Renee


                                5
Beauty Salons, Inc., which owns and operates twelve salon stores
in New Jersey under the name Beauty Bar. Just one of these
salons is located near a Cosmetic Gallery Image Beauty store—in
a neighboring town in southern New Jersey—but that Beauty Bar
salon did not open until after the events challenged by Cosmetic
Gallery, and the nearby Cosmetic Gallery store did not have
competing salon services. Beauty Bar, which combines both
retail and salon services, sells salon-only brands of hair products
in its stores. Those products are purchased by Beauty Bar from
Schoeneman Beauty Supply and other distributors, including East
Coast Salon Services, Emiliani Enterprises, and Goldwell Mid-
Atlantic.
        Cosmetic Gallery contends Schoeneman orchestrated a
group boycott in order to prevent it from competing with Beauty
Bar. Cosmetic Gallery alleges Schoeneman Beauty Supply and
other distributors who had an economic interest in the success of
Beauty Bar because it was a big customer consequently had an
interest in keeping out Image Beauty as a competitor. Cosmetic
Gallery further contended Schoeneman Beauty Supply wanted to
exclude Image Beauty from competing with it because Cosmetic
Gallery had a history of success in undercutting Beauty Bar’s
prices for hair care products and sundries. But defendants point
out that Cosmetic Gallery and Eisenberg had never been party to
a distribution contract for salon-only products, and furthermore,
Eisenberg had a lengthy history of selling diverted salon-only
products. Not only did diverted products sold by Eisenberg
include some of the brands distributed by defendants, but
Eisenberg was actively engaged in selling these diverted products

                                6
during the time of the events from which this suit sprouted.
      Eisenberg offered what he contends was both direct and
circumstantial evidence of the conspiracy.2 The District Court

   2
    Cosmetic Gallery offered the following as “direct” evidence
of the alleged conspiracy:
         (1) Schoeneman’s “Do Not Sell” memo to his own sales
staff describing Eisenberg as a known diverter, and instructing
that no product should be sold to him;
         (2) Schoeneman’s handwritten notes of a conversation
with Tom Campbell of Matrix, in which Campbell suggested
that if Schoeneman Beauty Supply did sell to Cosmetic Gallery,
that it should mark products with secondary codes (such as with
invisible ink), and that he should require Eisenberg to reveal
where he had bought salon-only products in the past;
         (3) Schoeneman’s communications with Patricia Urban,
who worked for an investigative consulting firm, in which
Schoeneman asked about Eisenberg’s eligibility for salon-only
purchasing;
         (4) Schoeneman’s Oct. 8, 2002, e-mail to Charles
Domroe, of L’Oreal, in which he inquired whether L’Oreal had
also identified Eisenberg as a known diverter; and,
         (5) Eisenberg’s deposition testimony that Greg Mancini,
from distributor Goldwell Mid-Atlantic, told him Schoeneman
had “reached out” to distributors and was “boycotting”
Eisenberg.
         Additionally, Cosmetic Gallery offered the following as
“circumstantial” evidence of the conspiracy:

                               7
found Cosmetic Gallery’s evidence insufficient to support its
claims, and granted summary judgment in favor of the
defendants.
                               III.
        This case was brought under New Jersey law, principally
under N.J. Stat. Ann. § 56:9-3, which provides: “Every contract,
combination in the form of trust or otherwise, or conspiracy in
restraint of trade or commerce, in this State, shall be unlawful.”
In applying § 56:9-3, New Jersey courts look to the federal


       (1) Schoeneman’s interest in Beauty Bar gave it an
economic interest in a boycott of Cosmetic Gallery;
       (2) Other distributors had an interest in Beauty Bar’s
success, giving them an economic incentive to boycott Cosmetic
Gallery;
       (3) Cosmetic Gallery had historic success in undercutting
defendants’ pricing for sundries;
       (4) Schoeneman had decided not to sell to Cosmetic
Gallery from the outset;
       (5) Schoeneman contacted others in the industry through
industry consultant Urban;
       (6) Schoeneman’s conversation with Mancini advised of
a boycott;
       (7) The timing of events was more than coincidental;
       (8) Schoeneman was duplicitous during discovery; and
       (9) Schoeneman’s reasons for not selling to Cosmetic
Gallery were pretextual.

                                8
courts’ interpretation of the similar wording of the Sherman Act.3
N.J. Stat. Ann. § 56:9–18;4 Patel v. Soriano, 
848 A.2d 803
, 826
(N.J. Super. Ct. App. Div. 2004). On appeal, Cosmetic Gallery
contends the District Court erred in granting summary judgment
in favor of the defendants.
        Summary judgment is only appropriate where the court is
satisfied “there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 
477 U.S. 317
, 330 (1986). Where an illegal conspiracy is alleged, the
complaining party must establish “that there is a genuine issue of
material fact as to whether [the accused party] entered into an
illegal conspiracy that caused respondents to suffer a cognizable
injury.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 
475 U.S. 574
, 585–86 (1986); Fed. R. Civ. P. 56(e). This requires


    3
   Section 1 of the Sherman Act provides:
      Every contract, combination in the form of trust
      or otherwise, or conspiracy, in restraint of trade or
      commerce among the several States, or with
      foreign nations, is declared to be illegal.
15 U.S.C. § 1 (2000).
    4
    N.J.S.A. § 56:9-18 provides that New Jersey’s antitrust act
“shall be construed in harmony with ruling judicial
interpretations of comparable Federal antitrust statutes and to
effectuate, insofar as practicable, a uniformity in the laws of
those states which enact it.”

                                9
both a showing of injury that resulted from the illegal conduct
and that the issue of fact be “genuine”; in other words, “the
nonmoving party must come forward with ‘specific facts
showing that there is a genuine issue for trial.’” 
Matsushita, 475 U.S. at 586
–87 (quoting Fed. R. Civ. P. 56(e)).
       Where the record taken as a whole could not lead
       a rational trier of fact to find for the non-moving
       party, there is no genuine issue for trial. . . .
               It follows from these settled principles that
       if the factual context renders respondents’ claim
       implausible—if the claim is one that simply makes
       no economic sense—respondents must come
       forward with more persuasive evidence to support
       their claim than would otherwise be necessary.
Id. at 587
(internal quotations and citations omitted).
       Furthermore, “[t]o survive a motion for summary
judgment . . . [an antitrust] plaintiff seeking damages for a
violation of § 1 [of the Sherman Act] must present evidence that
tends to exclude the possibility” that the alleged conspirators
acted independently. 
Id. at 588
(internal quotation marks
omitted). Thus, a plaintiff must offer enough evidence that “the
inference of conspiracy is reasonable in light of the competing
inferences of independent action or collusive action that could
not have harmed respondents.” 
Id. The Supreme
Court has cautioned that fact finders should
not be permitted “to infer conspiracies when such inferences are


                                10
implausible, because the effect of such practices is often to deter
procompetitve conduct.” 
Id. at 593
(citing Monsanto Co. v.
Spray-Rite Serv. Corp., 
465 U.S. 752
, 762–64 (1984)).
         In Bell Atlantic Corp. v. Twombly, 
127 S. Ct. 1955
(2007), the Supreme Court summarized the current requirements
for antitrust plaintiffs:
       An antitrust conspiracy plaintiff with evidence
       showing nothing beyond parallel conduct is not
       entitled to a directed verdict, see [Theatre
       Enterprises, Inc. v. Paramount Film Distributing
       Corp., 
346 U.S. 537
(1954)]; proof of a § 1
       conspiracy must include evidence tending to
       exclude the possibility of independent action, see
       [Monsanto]; and at the summary judgment stage a
       § 1 plaintiff”s offer of conspiracy evidence must
       tend to rule out the possibility that the defendants
       were acting independently, see 
[Matsushita]. 127 S. Ct. at 1964
(internal citations abbreviated).
       There is often a fine line between legitimate business
practices and unlawful concerted action, and direct
evidence—the smoking gun—of illegal conspiracy may not be
available. Thus it is essential to consider all of the evidence
proffered to determine whether it is sufficient to withstand a
motion for summary judgment.
      Cosmetic Gallery proffered both direct and circumstantial
evidence of conspiracy. For ease of analysis, we will first

                                11
consider Cosmetic Gallery’s direct evidence.
        “Direct” evidence must evince with clarity a concert of
illegal action. We have previously noted several examples of
direct evidence of conspiracy:
      (1) a direct threat to the plaintiff from a competitor
      that if he went into business his competitors would
      do anything they could to stop him, including
      cutting prices or supplies, see [Rossi v. Standard
      Roofing, Inc., 
156 F.3d 452
(3d Cir. 1998)];
      (2) advising distributors that a supplier would cut
      off access if the distributor failed to maintain a
      certain price level, see 
Monsanto, 465 U.S. at 765
.
      . .;
      (3) a memorandum produced by a defendant
      conspirator detailing the discussions from a
      meeting of a group of alleged conspirators, see
      Arnold Pontiac-GMC, Inc., v. Budd Baer, Inc., 
826 F.2d 1335
, 1338 (3d Cir. 1987); and
      (4) a public resolution by a professional
      association recommending that its members
      withdraw their affiliation with an insurer, see Pa.
      Dental Ass’n v. Med. Serv. Ass’n of Pa., 
815 F.2d 270
, 273 (3d Cir. 1987).
Intervest v. Bloomberg, 
340 F.3d 144
, 162–63 (3d Cir. 2003).
       Here, as noted, Cosmetic Gallery contends the following
constituted direct evidence of conspiracy:


                               12
        (1) Schoeneman’s “Do Not Sell” memo to
        Schoeneman Beauty Supply sales staff regarding
        Eisenberg;
        (2) Schoeneman’s handwritten notes of a
        conversation with Campbell;
        (3) Schoeneman’s communications with Urban;
        (4) Schoeneman’s October 8, 2003 e-mail to
        L’Oreal; and
        (5) Eisenberg’s deposition testimony that Mancini
        told him Schoeneman had “reached out” to
        distributors and was “boycotting” Eisenberg.5
        The District Court determined that the first four pieces of

    5
     The only evidence offered by Eisenberg of a conspiracy
between Emiliani Enterprises and the defendants is Eisenberg’s
interpretation of a sequence of events and a phone conversation
he alleges he had with Greg Mancini, then a representative of
Goldwell Mid-Atlantic. In deposition testimony, Eisenberg
stated that Mancini told him: “[Schoeneman is] boycotting you,
you’re not going to get any product from Dale or anybody else.”
However, Mancini, in his deposition testimony, contradicted
Eisenberg’s testimony, stating that he did not tell Eisenberg that
Schoeneman was boycotting Cosmetic Gallery, but did tell him
“you’ve been a thorn in people’s sides for many years, why
would you expect people to want to do business with you now?”
Mancini testified about Eisenberg’s long history of selling
salon-only products that had been diverted outside the
contractually determined sales channels.

                                13
listed evidence required several inferences to serve as direct
proof of a conspiracy among Schoeneman Beauty Supply,
Schoeneman, East Coast, Emiliani Enterprises, and Goldwell
Mid-Atlantic to prevent Cosmetic Gallery from competing with
Beauty Bar. The District Court concluded this evidence lacked
the clarity of the direct evidence proffered in other antitrust
cases. We agree.
       As for the Eisenberg deposition evidence, the District
Court found, assuming it was not inadmissible hearsay, this was
direct evidence only of an opportunity to conspire and of
consciously parallel behavior (Schoeneman communicated with
other distributors; Schoeneman did not want to sell to Cosmetic
Gallery; Goldwell Mid-Atlantic knew that Schoeneman did not
want to sell to Cosmetic Gallery). But the District Court
determined that neither direct evidence of an opportunity to
conspire nor of consciously parallel behavior constituted direct
evidence of concerted action, and was at best circumstantial
evidence.
       We have previously noted that proof of opportunity alone
is insufficient to sustain an inference of conspiracy, and that
consciously parallel behavior is circumstantial evidence of
concerted action. See Petruzzi’s IGA Supermarkets, Inc., v.
Darling-Delaware Co., Inc., 
998 F.2d 1224
, 1235 (3d Cir. 1993).
We agree with the District Court that this evidence is, at best,




                              14
circumstantial, but not direct, evidence of conspiracy.6
       Cosmetic Gallery offered a variety of circumstantial
evidence, which is described earlier. See note 
2, supra
. As
noted, in reviewing a grant of summary judgment, our task is to
determine whether “the record taken as a whole could not lead a
rational trier of fact to find for the non-moving party,” i.e.,
whether there was a genuine issue for trial. 
Matsushita, 475 U.S. at 587
. Evidence that does not exclude the possibility of
independent action or that relies on a factual context that is
implausible is insufficient to withstand summary judgment. 
Id. Cosmetic Gallery’s
circumstantial evidence falls short of


    6
     The District Court analyzed this case following the rubric
laid out in Intervest, which called for an examination of direct
and circumstantial evidence of conspiracy, and, if lacking, a
review of evidence under the conscious parallelism test.
Cosmetic Gallery contends this case should have been analyzed,
instead, under Rossi v. Standard Roofing, Inc., 
156 F.3d 452
(3d
Cir. 1998), which dealt with a group boycott. But this confuses
the difference between Rossi and Intervest. The principal
difference is not that Rossi involved a group boycott, but rather
that the evidence presented by the plaintiff in Rossi constituted
direct evidence of a conspiracy, and that the evidence was
circumstantial in Intervest. The proper analysis on this summary
judgment motion was, therefore, whether the evidence proffered
was sufficient, either directly or circumstantially, to show
concerted action.

                               15
excluding the possibility that the distributors acted
independently. The only evidence proffered to show any
communication between alleged conspirators is Eisenberg’s
account of his conversation with Mancini, already detailed. As
the District Court noted, even if this is not inadmissible hearsay,
it is at best evidence of an opportunity to conspire, not of
concerted action. The other evidence, particularly in light of
Eisenberg’s apparent reputation in the industry, does not exclude
the possibility of independent action by the distributors.
Furthermore, Cosmetic Gallery’s circumstantial evidence, taken
as a whole, does not create a factual context from which a
reasonable inference could be drawn that would prove
conspiracy.
        In the alternative, circumstantial evidence can be used to
demonstrate consciously parallel action by defendants. This
entails demonstrating (1) the defendants’ behavior was parallel;
(2) the defendants were aware of each other’s conduct and that
this awareness was an element in their decision-making process;
and (3) certain plus factors, which must include that the actions
were contrary to the defendants’ economic interests, and that
there was some motivation to enter into such an agreement.
Intervest, 340 F.3d at 165
.
       The Supreme Court’s most recent statement on the
sufficiency of antitrust pleading standards—an antecedent
question to the one before us—reiterates that an antitrust
complaint must include “enough factual matter (taken as true) to
suggest that an agreement was made. . . . [I]t simply calls for


                                16
enough fact to raise a reasonable expectation that discovery will
reveal evidence of illegal agreement.”7 
Twombly, 127 S. Ct. at 1965
.
       Twombly also signaled the vitality of Matsushita and
Monsanto, noting the two cases “have made it clear that neither
parallel conduct nor conscious parallelism, taken alone, raise the
necessary implication of conspiracy.” 
Id. at 1968
n.7.
Nevertheless, although it “falls short of ‘conclusively
establish[ing] agreement or . . . itself constitut[ing] a Sherman
Act offense,’” a showing of consciously parallel behavior may be
admissible as circumstantial evidence. 
Id. at 1964
(quoting
Theatre 
Enterprises, 346 U.S. at 540
–41) (alterations in original).

    7
   Twombly continues:
       A statement of parallel conduct, even conduct
       consciously undertaken, needs some setting
       suggesting the agreement necessary to make out
       a §1 claim; without that further circumstance
       pointing toward a meeting of the minds, an
       account of a defendant’s commercial efforts stays
       in neutral territory. An allegation of parallel
       conduct is thus much like a naked assertion of
       conspiracy in a § 1 complaint: it gets the
       complaint close to stating a claim, but without
       some further factual enhancement it stops short of
       the line between possibility and plausibility of
       entitlement to 
relief. 127 S. Ct. at 1966
(internal quotation marks omitted).

                                17
The District Court, following our Intervest opinion, also analyzed
Cosmetic Gallery’s circumstantial evidence for consciously
parallel behavior by the alleged conspirators.8 
Intervest, 340 F.3d at 163
–66.
        The District Court concluded Cosmetic Gallery’s
circumstantial evidence did not show conscious parallelism. We
agree. Even if the action of not selling to Cosmetic Gallery were
parallel among distributors, Cosmetic Gallery’s own evidence
asserts and demonstrates Schoeneman had determined not to sell
to Cosmetic Gallery from the outset, before any of the alleged
acts took place. See note 
2, supra
. This would negate awareness
of parallel action on the part of Schoeneman that was “an
element in [his] decision-making processes.” 
Intervest, 340 F.3d at 165
.


      8
      Cosmetic Gallery contends conscious parallelism only
applies in price-fixing cases. It often appears in this context, but
several cases in this Circuit have applied conscious parallelism
analysis to alleged boycotts and refusals to deal. See 
Intervest, 340 F.3d at 165
–66; Houser v. Fox Theatres Management
Corp., 
845 F.2d 1225
, 1232 (3d Cir. 1988); Schoenkopf v.
Brown & Williamson Tobacco Corp., 
637 F.2d 205
, 208–09 (3d
Cir. 1980); Venzie Corp. v. United States Mineral Prods. Co.,
521 F.2d 1309
, 1314–16 (3d Cir. 1975). At least one other court
of appeals has specifically applied conscious parallelism
analysis to group boycotts. Merck-Medco Managed Care v. Rite
Aid Corp., 
1999 WL 691840
, *8 (4th Cir. September 7, 1999).

                                18
        Furthermore, we agree with the District Court there was
insufficient evidence to show that refusal to sell to Cosmetic
Gallery was contrary to Schoeneman’s economic interest.
Cosmetic Gallery’s proffered evidence amounts to an assertion
that its desire to buy product from Schoeneman was
automatically in Schoeneman’s economic interest. But this
assertion ignores the purpose of salon-only branding and
contracting, as well as the long-standing practice by the
manufacturers and distributors of these products. The exclusivity
of the products is the major component of their marketing
strategy, cost, cachet, and profit. Thus, the simple fact that
Cosmetic Gallery wanted to buy product is not enough to show
Schoeneman acted contrary to his economic interest. See, e.g.,
Twombly, 127 S. Ct. at 1973
(noting that firms do not expand
without limit, nor do they enter every market that an outsider
might consider to be profitable). Furthermore, Cosmetic Gallery
offers no evidence that it even qualified to enter into a salon-only
products contract, either because it no longer engaged in the
resale of products diverted by others, or because it had sufficient
salon-generated proceeds to satisfy the requirements of
distributors. Finally, if Schoeneman Beauty Supply had agreed
to distribute to Cosmetic Gallery, and Cosmetic Gallery were
found either to be a diverter or otherwise unqualified to purchase
salon-only brands, Schoeneman Beauty Supply risked major
economic injury—cancellation of its contracts with other
manufacturers—because of its association with Cosmetic
Gallery.      Cosmetic Gallery fails to demonstrate that
Schoeneman’s decision not to sell to Cosmetic Gallery was


                                19
against his or his company’s economic interest.
       Cosmetic Gallery’s circumstantial evidence fails to show
consciously parallel action by the alleged co-conspirators. The
District Court properly granted summary judgment for the
defendants.
                                IV.
       Cosmetic Gallery contends that it was improperly required
to show a role was played by a co-conspirator and that
Schoeneman acted as a ringleader. But, as the District Court
noted, regardless of the test used, the antitrust plaintiff bears the
burden of proving “concerted action” (contract, combination or
conspiracy with others), because “[u]nilateral activity by a
defendant, no matter the motivation, cannot give rise to a section
1 violation.” 
Intervest, 340 F.3d at 159
. As noted, Cosmetic
Gallery’s evidence does not prove any concerted action, and, in
fact, amounts to uncontested proof of unilateral activity by
Schoeneman.
       There was no error by the District Court.9
                                V.
       We will affirm the grant of summary judgment.


   9
    We have also reviewed Cosmetic Gallery’s challenge to the
District Court’s grant of summary judgment on its various non-
antitrust claims. We find Cosmetic Gallery’s arguments on
these claims to be without merit.

                                 20

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