Jack Weit v. Continental Illinois National Bank and Trust Company of Chicago , 641 F.2d 457 ( 1981 )

CAMPBELL, Senior District Judge.

Plaintiffs appeal from the entry of summary judgment on their claim of a price-fixing conspiracy in violation of Sections 1 and 2 of the Sherman Act. The District Court concluded that after eight years of discovery plaintiffs had failed to produce any significant probative evidence to support the complaint.¹ Based on our review of the record we, too, conclude that plaintiffs are unable to point to any significant probative evidence in support of the allegations in the complaint. Accordingly, we affirm.

This class action was initiated in 1970 by three charge cardholders in the Midwest Bank Card System, Inc. and its successor the Interbank-Master Charge Card System, Inc. (Mastercharge), against five Chicago banks. The plaintiffs alleged that defendants, Continental Illinois National Bank & Trust Company of Chicago (Continental), Harris Trust and Savings Bank (Harris), Pullman Bank and Trust Company (Pullman), Central National Bank in Chicago (Central), and American National Bank and Trust Company (American), conspired to fix the interest rate paid by consumer credit cardholders on extended payments at 1.5% per month, or 18% per annum.² Plaintiffs alleged that defendants engaged in a horizontal conspiracy among themselves, and a vertical conspiracy among themselves and their respective correspondent banks in Illinois. Plaintiffs sought five hundred million dollars in damages before trebling and injunctive relief requiring renegotiation of cardholder rates on an individual basis.³

This controversy arises out of the formation of the Midwest Bank Card System by the defendant banks. As the District Court noted, the circumstances surrounding the formation of Midwest and its successor, Mastercharge, are not in dispute.⁴ Those facts are set forth in detail in the District Court’s opinion. See Weit v. Continental Illinois National Bank & Trust Co., 467 F.Supp. 197, 200-205 (N.D.Ill.1978). However, a brief summary of the Midwest system is appropriate.

In early 1966, First National Bank of Chicago held a meeting attended by representatives of Continental, Harris and the Northern Trust to discuss the establishment of a compatible credit card program. The idea of establishing a credit , card system was well received, and further meetings ensued. A representative of American also participated in these meetings as an observer.

The banks sought to establish a compatible credit card system. That is a system which permits a card issued by one bank to be used for purchases from participating merchants who deal with other banks. The card issuing bank provides the consumer with a plastic charge card. The cardholder agrees to pay his bank for monies advanced to cover purchases by the cardholder with the charge card. The cardholder can use the charge card to make purchases from any merchant who accepts the Midwest Charge card. The merchant simply forwards the signed charge ticket to his own bank, and is credited with the full amount of the charged purchase, less a small “discount” or fee. The merchant’s bank then receives a credit from the cardholder’s bank. At the end of each month the cardholder is billed by his bank for the total amount of purchases made during the period. The merchant’s bank generates revenues by charging the merchant a fee or “discount” for its services. If the cardholder pays his bank the full amount due within a specified period, he incurs no finance or interest charge. If he defers payment, however, his bank charges him interest on the unpaid balance. That interest rate, and how it was arrived at, is the subject of this controversy.

The Midwest Bank Card System, Inc. is a non-profit corporation established by the defendant banks, except American,⁵ to administer the compatible charge card system. The defendant banks established the Midwest System in 1966 to facilitate the transfer or “interchange” of funds among participating banks. The defendants maintain that compatibility and a facilitated interchange of funds is essential to a successful bank charge system. Midwest was established, they argue, solely to assure an efficient compatible system.

The defendant banks also contend that an important aspect of a compatible charge card system is the integration of correspondent banks into the system. A correspondent bank maintains a deposit balance with a larger Metropolitan bank. The Metropolitan banks, in turn, provide services to their correspondents. Since Illinois is a “unit banking” State, which limits the use of branch banks,⁶ major Metropolitan banks, such as the defendants, establish correspondent relationships with smaller banks in lieu of opening branches in other areas. Some banks would establish several correspondent relationships with major Metropolitan banks.⁷ Each defendant recruited its correspondent bank to participate in the Midwest System. Plaintiffs claim that in doing so the defendants also conspired with their correspondent banks to fix the rate of interest charged at 18% per annum.

The initial meetings during the Spring and Summer of 1966, attended by representatives of defendants Continental and Harris, and by representatives of First and the Northern Trust, are outlined fully by the District Court and need not be restated here. See Weit v. Continental, supra, at 200-205. Continental and Harris were joined by Central National Bank in the Fall. Northern Trust dropped out of the program in August of 1966. Representatives of Pullman, a correspondent of First, Harris and Continental, began attending meetings in August. On October 24, 1966, First, Continental, Harris, Central and Pullman executed an interim agreement establishing the Midwest System. Midwest’s regulations permitted membership by any commercial bank. On March 26, 1969, American petitioned for membership and became a member on May 16, 1969.

From the outset the defendant banks were aware of the potential anti-trust problems inherent in a joint venture such as this. At an early meeting on May 26, 1966, lawyers for First raised the anti-trust issue. The group agreed at that time, on advice of counsel, to exclude from their discussion interest rates, fees, advertising, and market research. On July 25, 1966, Miles Seeley, counsel for Continental, submitted a memorandum to the group warning that discussions must be limited to planning a compatible credit card system and prohibiting any discussion of “fees, discounts, billing and extended credit terms.”⁸ Thereafter, a member of Seeley’s firm was present at all meetings to assure that this policy was adhered to, and that interest rates were not discussed, “even in jest.”⁹ Initial drafts of the “Compatible Credit Card System for Chicago Area Banks” also stated that card issuing banks “will be completely and solely responsible to determine .. . credit policies and interest rates.”¹⁰

Nevertheless, plaintiffs argue, each defendant bank arrived at the same interest rate.¹¹ The defendants had ample opportunity to discuss interest rates at meetings of the Midwest group, at annual bankers’ meetings, and even on social occasions. Plaintiffs point to several instances in . the record where representatives of the defendant banks did discuss interest rates, though in the context of Illinois usury regulations. Plaintiffs further rely on an affidavit submitted by their expert, Bernard Shull, to the effect that “conscious cooperation” on the part of the members of the Midwest System was the likely cause of the 18% interest rate.

Plaintiffs argue that in addition to these factors which were considered by the District Judge, the lobbying efforts by the defendant banks also suggest the existence of a price fixing conspiracy. Those lobbying efforts were expressly not considered by the District Court.¹²

When the Illinois General Assembly convened in 1967, several bills were introduced regulating interest charged on consumer credit cards. The general interest rate limit under the Illinois Usury Statute was 7% per annum. The Chief Counsel to the Illinois Comptroller¹³ had, however, issued separate opinion letters to First and Continental indicating that National Banks could, under the Consumer Finance Act, charge 3% interest per month on balances up to $150, 2% on balances between $150 and $300, and 1% on the remaining balance above $300. There was no Illinois precedent in accord with that conclusion. Several of the bills pending in the Legislature would have limited charge card interest to 1% per month. The defendant banks engaged a lobbyist, William R. Dillon, to seek passage of a bill which would permit monthly credit card interest of 1.5%. Dillon’s efforts were successful, as the Legislature approved House Bill 2071 which contained the 1.5% limit.

Plaintiffs contend that this evidence, provided by sworn affidavit or deposition, should at least create a genuine issue of material fact sufficient to defeat a defense motion for summary judgment under Rule 56, F.R.C.P.

The District Court found that the defendant’s parallel interest rate; the opportunity to conspire to fix those rates; the specific references to interest rates in the record; and the opinion of Professor Shull did not create a reasonable inference of the conspiracy which plaintiffs alleged. 467 F.Supp. at 210-211. In support of their motion for summary judgment, defendants, as they must, came forward with testimony under oath refuting plaintiffs’ allegations. This evidence showed that each defendant had independently projected the costs and early losses from the credit card system, and independently arrived at 1.5% per month as the minimum interest rate they could charge. The Court below noted that every employee of the defendant banks who participated in the formation of Midwest denied, under oath, that there had been any discussion relating to a fixed or agreed interest rate. The Court found that the parallel rates were not surprising since each defendant faced the “identical problems of fraud, credit losses, and large initial expense, to which reasonable businessmen would react in the same fashion.” 467 F.Supp. at 210-211.

Also, the Court noted that 1.5% per month was the rate then charged on other consumer credit cards and by retail establishments offering their own credit.

The Court found that defendants had shifted the burden to the plaintiffs to come forward with “significant probative evidence to support the complaint,” citing First National Bank of Arizona v. Cities Service, 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). The District Court concluded that, after more than eight years of discovery,

.. . plaintiffs have confronted every person who attended those meetings, examined the minutes of and documents generated by each meeting, and found no evidence which affirmatively supports their theory. 467 F.Supp. at 211.

SUMMARY JUDGMENT

Rule 56(c) provides that summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact ...” Rule 56(e) provides that when a motion for summary judgment is supported by sworn denials, as is the case here, the burden shifts to the plaintiff to “set forth specific facts showing that there is a genuine issue for trial.”

By entering summary judgment the Court is, in effect, concluding that based on the evidence upon which the plaintiff intends to rely at trial, no reasonable jury could return a verdict for the plaintiff.¹⁴

In the instant case the District Judge reviewed the evidence in the record at the conclusion of a lengthy period of discovery and found no significant probative evidence of a conspiracy to fix interest rates. Based on our independent review of the record, we, too, are unable to uncover any such evidence, and conclude that further proceedings in this case would result in a waste of limited judicial time and resources.¹⁵

THE ALLEGED HORIZONTAL CONSPIRACY

Plaintiffs contend that circumstantial evidence in the record — parallel rates and the opportunity to conspire — are sufficient to meet their burden under Rule 56(e). Clearly, circumstantial evidence can be sufficient to support a finding of a price-fixing conspiracy. Interstate Circuit v. United States, 306 U.S. 208, 59 S.Ct. 467, 83 L.Ed. 610 (1939). Parallel business behavior or “conscious parallelism” is the type of circumstantial evidence .which, absent more direct evidence, will be relied on in inferring unlawful agreement. Theatre Enterprises v. Paramount Film Distributing Corp., 346 U.S. 537, 540, 74 S.Ct. 257, 259, 98 L.Ed. 273 (1954). However, when defendants come forward with denials sufficient to shift the burden under Rule 56(e), plaintiffs must come forward with some significant probative evidence which suggests that conscious parallelism is the result of an unlawful agreement. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289-90, 88 S.Ct. 1575, 1592-1593, 20 L.Ed.2d 569 (1962); Modern Home Institute, Inc. v. Hartford Accident and Indemnity Co., 513 F.2d 102 (2d Cir. 1975). Parallel behavior and the hope that something further can be developed at trial is not sufficient to warrant a trial on the merits. Cities Service at 290, 88 S.Ct. at 1593; Perma Research and Development Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969). Conscious parallelism in the instant case could support a wide range of inferences. One logical inference is that the ll/z% per month interest rate reflected a business decision as to what rate the market for consumer credit would bear, and eventually prove profitable as well. An equally plausible inference, and one supported in the record, is that the already established rate of consumer credit was lVz% per month, as reflected by Bank Americard and retail outlets offering installment credit.¹⁶ If plaintiffs are to proceed to trial, they must be able to point to some probative evidence that parallel interest rates resulted from unlawful agreement rather than lawful business reasons.

Plaintiffs rely heavily on the opportunity to conspire as probative evidence of unlawful conspiracy. The dissent also attaches significance to the close personal ties among the members of the Chicago banking community. Yet, the mere opportunity to conspire,¹⁷ even in the context of parallel business conduct, is not necessarily probative evidence. See Venzie Corporation v. United States Mineral Products Co., 521 F.2d 1309 (3rd Cir. 1975); Overseas Motors, Inc. v. Import Motors Ltd., 375 F.Supp. 499, 535 (E.D.Mich.1974), aff’d 519 F.2d 119 (6th Cir. 1975). This is especially the case when the need to set up a compatible card system requires a degree of cooperation. The only rational inference here is that the need to set up a compatible system mandated that defendants work together. Given the need for some degree of cooperation in a venture of this nature, the opportunity to conspire evidence lacks significant probative value. Of greater significance is the sworn testimony compiled during eight years of depositions which uniformly denies discussion of any agreement or understanding as to the interest rate to be charged.

It is suggested that while parallel pricing alone is not sufficient to establish a price-fixing conspiracy, such evidence together with an opportunity to conspire is sufficient to rebut defendants’ denials and require a trial on the merits. See C-O-Two Fire Equipment Co. v. United States, 197 F.2d 489 (9th Cir. 1952), cert. denied 344 U.S. 892, 73 S.Ct. 211, 97 L.Ed. 690 (1952); Esco Corporation v. United States, 340 F.2d 1000 (9th Cir. 1965).¹⁸ However, when the plaintiff or prosecution relies on circumstantial evidence alone, the inference of unlawful agreement rather than individual business judgment must be the compelling, if not exclusive, rational inference. Pevely Dairy Co. v. United States, 178 F.2d 363 (8th Cir. 1949). Indeed, the Court in Pevely stated:

Where circumstantial evidence is relied upon to establish the conspiracy or any other essential facts, it is not only necessary that all the circumstances concur to show the existence of such conspiracy and facts sought to be proved, but such circumstantial evidence must be inconsistent with any other rational conclusion.¹⁹

Pevely, as well as C-O-Two and Esco were criminal cases with differing standards of proof. Nevertheless, it is interesting that the court in C-O-Two distinguished Pevely on the basis of the product in question. The Court stated the milk (the alleged price-fixed product) “approaches fungibility.”²⁰ The defendants did business in the same area, paid a fixed regulated price for the product and incurred virtually identical labor costs. Similarly, in civil anti-trust cases, Courts have noted that parallel pricing or conduct lacks probative significance when the product in question is standardized or fungible. Bendix Corporation v. Ballax, Inc., 471 F.2d 149, 160 (7th Cir. 1972); Independent Iron Works, Inc. v. United States Steel Corp., 322 F.2d 656 (9th Cir. 1963).²¹

In the instant case, the product in question is consumer credit, or more fundamentally, the cost of borrowing money for a given period. The underlying product— money — is not only fungible, it is by defini-. tion an interchangeable medium of exchange. The defendants’ own cost of money is highly regulated and, on a given day and specified amount, the cost is uniform. Thus, it is hardly surprising, or significant, that the defendants charged a parallel interest rate²² given their parallel costs. We agree with the District Court’s conclusion as to the only rational inference to be drawn from parallel pricing in this case:

The showing of parallel behavior under these circumstances, where each bank faced identical problems of fraud, credit losses, and large initial expense to which reasonable businessmen would react in the same fashion, does not provide a basis for the inference of the conspiracy which plaintiffs allege.²³

Thus, parallel interest rates, together with evidence that the opportunity to conspire existed — when measured against defendants’ denials, parallel economic cost factors, and the need for a compatible charge card system — does not support a rational inference of an unlawful conspiracy.

Plaintiffs suggest that summary judgment should rarely be entered in anti-trust cases due to the central role of motive and intent issues. See Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962). However, no greater caution or concern for litigants’ rights is required in the anti-trust context than in other substantive areas of Federal Court litigation. Lupia v. Stella D’Oro Biscuit Company, Inc., 586 F.2d 1163, 1167 (7th Cir. 1978), cert. denied 440 U.S. 982, 99 S.Ct. 1791, 60 L.Ed.2d 242 (1979).

This Circuit has recognized that “the very nature of anti-trust litigation would encourage summary disposition .. . when permissible.” Lupia v. Stella D’Oro, 586 F.2d at 1167. The statutory remedy of treble damages creates a “special temptation for the institution of vexatious litigation.” Id., citing Poller, 368 U.S. at 478, 82 S.Ct. at 493 (Harlan, J., dissenting). Also, anti-trust actions have proven to be especially protracted, and difficult for jury consideration. See United States v. United Gypsum Co., 438 U.S. 422, 465-469, 98 S.Ct. 2864, 2887-2889, 57 L.Ed.2d 854 (1978); ILC Peripherals Leasing Corporation v. International Business Machines Corporation, 458 F.Supp. 423, 445-448 (N.D.Cal.1978). Indeed, in the ILC case the District Judge, after a five month trial which ended in a deadlocked jury and a mistrial, concluded that the case was “beyond the ability and competency of any jury to understand and decide rationally.” 458 F.Supp. at 448.

We simply cannot turn our heads and ignore the practical realities of complex anti-trust litigation. A trial of this nature places a substantial burden on jurors who are seldom prepared to analyze the complexities of anti-trust claims.²⁴ As Chief Justice Burger has so appropriately noted: “.. . it borders on cruelty to draft people to sit for long periods to cope with issues largely beyond their grasp.”²⁵

When a District Court has afforded the parties eight years of unlimited discovery, the parties have designated the evidence on which they will rely at trial, and the Court has had an opportunity to review the evidence and concludes that no reasonable jury could return a verdict for plaintiffs, judicial economy mandates that summary judgment be entered. See e. g. Modern Home Institute, Inc. v. Hartford Accident & Indemnity Co., 513 F.2d 102 (2d Cir. 1975). A trial on such claims would serve only as a forum for impeachment and argument by counsel; not for the presentation of evidence. If the District Court, on the eve of trial, concludes that extensive and complete discovery has produced no evidence to support the complaint, summary judgment should be entered. As the Court noted in Cities Service:

While we recognize the importance of preserving litigants’ rights to a trial on their claims, we are not prepared to extend those rights to the point of requiring that anyone who files an anti-trust complaint setting forth a valid cause of action be entitled to a full-dress trial notwithstanding the absence of any significant probative evidence tending to support the complaint. 391 U.S. at 290, 88 S.Ct. at 1593.

We believe the instant case is precisely the kind contemplated by the Court in Cities Service. The allegations have been met with consistent sworn denials and there has been a more than adequate period of discovery. Yet, plaintiffs can point to only two instances where interest rates were even discussed, and then only in the context of state usury laws, or the rate that Bank Americard was charging.²⁶ These two statements relating to interest rates during the several years of planning and implementation of the Midwest System, even when coupled with rate parallelism and an opportunity to conspire, do not rise to the level of “significant probative evidence” within the meaning of Cities Service.

Plaintiffs suggest that Cities Service is inapposite because that case involved a claim of refusal to deal rather than price fixing.²⁷ When price fixing is alleged, they suggest, circumstantial evidence should receive greater weight on a motion for summary judgment. Yet, a conspiracy to fix prices and a group boycott are both proscribed by Section 1 of the Sherman Act. Both are per se violations of the Act.²⁸ Neither case lends itself to proof by direct evidence. There is no basis for altering the standard for summary judgment to conform to a lesser quantum of evidence in either case. If plaintiffs’ circumstantial evidence of conspiratorial conduct is so insignificant that a rational jury could not find for plaintiffs, summary judgment is appropriate irrespective of the substantive nature of the complaint.

The dissent suggests that in the instant case, unlike in Cities Service, plaintiff has produced evidence of motive. It is suggested that this motive evidence distinguishes Cities Service from this case. In Cities Service the plaintiff²⁹ alleged that Cities Service Co. and six other large oil companies refused to purchase oil from him because plaintiff was selling Iranian oil. The alleged motive for the group boycott was retaliation against nationalization of property owned by one of the defendants, and an effort to force return of the property by a boycott of all oil produced in that country. The Court found that given no contrary evidence a jury “might well be presented as to Cities’ motives in not dealing with Waldron.” ³⁰ However, the Court affirmed the entry of summary judgment because “the record .. . contains an overwhelming amount of such contrary evidence of Cities’ motives.”³¹ Similarly, a motive is suggested for conspiratorial conduct in the present case, but the evidence in the record does not support that motive. The dissent mistakenly construes defendants’ concern about “chaos in the market” as an admission of anti-competitive motive in forming the Midwest System.³² Clearly, the defendant banks were concerned with the possibility that either an out-of-state bank or one Chicago bank would initiate its own credit card system.³³ If each bank in Chicago plus several large out-of-state banks initiated their own system, the likely result would be chaotic. The evidence suggests, however, that by chaos the banks did not mean competition as to interest rates, but a retail market in which a vast number of charge cards existed. Merchants would have to accept many if not all of these cards and then would have to look to each individual bank for payment. A compatible system permits the merchant to look to his own bank for the entire payment irrespective of which bank may have issued the card to the customer. While defendants were clearly concerned about a chaotic credit card market, the record suggests their concerns were not anti-competitive or conspiratorial. Rather, they were legitimate business concerns. We, therefore, do not agree with the dissent’s finding of an anti-competitive motive in this case.

Plaintiffs rely, as does the dissent, on Poller v. Columbia Broadcasting, 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962) in support of the contention that issues of anti-competitive intent are particularly appropriate for jury consideration. The Court in Cities Service noted several factual distinctions between that case and Poller which could be applied in the instant case as well.³⁴ Ultimately, however, these other cases are distinguished on the basis of the inferences which may reasonably be drawn from the evidence in the record. Our review of the record leads us to the conclusion that the circumstantial evidence in support of the complaint is so insubstantial when measured against the evidence in support of defendants’ denials, as to preclude a verdict for plaintiffs. Summary judgment on the claims of horizontal conspiracy is therefore appropriate.

EVIDENCE OF LOBBYING ACTIVITIES

Plaintiffs also contend that the District Court erroneously declined to consider the evidence of defendants’ lobbying activities, and that had that evidence been considered, summary judgment should have been denied. The dissent concurs in that view.

The argument for admissibility of this evidence is that it is relevant to the question of whether defendants conspired to fix interest rates. As the dissent points out, an inference can be drawn that the banks would not have worked together in lobbying for passage of a bill in the legislature unless they had implicitly agreed on an interest rate as well. We agree that such an inference could be drawn. Our problem with this evidence is that it more directly suggests an agreement to influence legislators on behalf of a particular bill under consideration. In Eastern Railroads Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961), the Court held that such conduct does not violate the Sherman Act, even though there may be an anti-competitive motive behind such conduct.³⁵ In United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), the Court reaffirmed that principle. The Court in Pennington noted:

Joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition. Such conduct is not illegal, either standing alone or as part of a broader scheme itself, violative of the Sherman Act.³⁶

The District Court noted that such conduct is immunized from anti-trust liability under the Noerr-Pennington doctrine, but stopped short of excluding it on that basis.³⁷ Rather, the District Judge concluded that the prejudicial quality of this evidence outweighed its probative value. Since he would exclude such evidence at trial, he declined to consider it on summary, judgment. The basis for the Court declining to consider this evidence was its “minimal probative value” as compared to its “inevitable prejudicial effect.”

Rule 403 of the Federal Rules of Evidence permits the Court to exclude relevant evidence “if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury... ,”³⁸ The evidence of defendants’ lobbying activity poses a serious problem of confusion of issues.³⁹ The likely confusion is that the jury will consider this evidence as probative of an agreement to influence public officials to enact a favorable interest rate. While an inference of a separate agreement to fix consumer credit rates could be drawn from this evidence, the more direct link is to the defendants’ legislative efforts which Noerr-Pennington immunizes from anti-trust liability. An appropriate cautionary instruction could be fashioned so as to draw the jury away from consideration of the immunized conduct as the antitrust tort and toward other possible inferences. Yet, the more likely result is that the jury, unskilled in the constitutional considerations of Noerr-Pennington, would conclude that the passage of a favorable consumer credit limit was the product of an unlawful conspiracy. We believe that confusion of issues is the probable result of admission of this evidence. Given the lack of any substantial evidence of an antitrust conspiracy in the instant case, the threat of prejudice from admission of this evidence is considerable. The lack of other probative evidence of conspiracy would serve to focus the jury’s attention on the lobbying evidence. This could easily result in a finding of antitrust liability for engaging in the First Amendment right to petition which Noerr-Pennington protects. We believe the District Court correctly excluded this evidence from consideration on the motion for summary judgment.

THE ALLEGED VERTICAL CONSPIRACY

Plaintiffs also claim that Continental, Harris, Central and Pullman conspired between themselves and their correspondent banks to fix interest rates charged to consumers and discount rates charged to merchants, in violation of Section 1 of the Sherman Act. The District Court entered summary judgment on the claim of vertical price-fixing by Continental in its Order of December 22, 1978. 467 F.Supp. 214-216. The rationale for entry of summary judgment was that the plaintiffs, in the face of sworn denials by Continental, had failed “to produce any significant probative evidence .. . that a conspiracy existed.” Id. at 216, citing Lamb’s Patio Theatre v. Universal Film Exchanges, 582 F.2d 1068, at 1070. The District Court entered summary judgment for defendants Harris and Central in its order of September 6, 1979.⁴⁰ The District Court noted at the outset the plaintiffs were cardholders of Continental and not within the “target area” of any conspiracy between defendants. The Court concluded that since plaintiffs could not have suffered any damage as a result of such conspiracy they cannot represent any class of persons holding cards issued by Harris, Central or Pullman. The Court went on to find that even assuming standing plaintiffs had failed to point to any evidence suggesting that interest rates were the result of anything other than independent business decisions. The Court also noted that the vertical conspiracy allegations “must fail because the basis for their existence — the allegation of a conspiracy among the named defendants — can no longer be maintained in light of this Court’s ruling of December 22, 1978.” 478 F.Supp. at 298.

With regard to plaintiffs’ claims against Pullman, the Court found that there were sufficient “plus factors” to withstand summary judgment. However, plaintiffs had no standing to raise a claim against Pullman since they were not cardholders of the charge cards issued by Pullman or its correspondent banks.

The District Court has given a comprehensive summary of the role played by correspondent banks and their relationship to the named defendant banks which need not be recapitulated here.⁴¹ We agree with the District Court’s conclusion that once judgment is entered as to the horizontal conspiracy claim there is little viability remaining to the vertical conspiracy claim. Nevertheless, the issue of standing aside, a genuine issue of fact as to a violation of the Sherman Act, Section 1, would exist had plaintiffs presented evidence of an agreement between the defendants and their respective correspondents to fix interest rates or discount fees.

Defendant Continental supported its motion for summary judgment by affidavits of its Vice President in charge of correspondent banking to the effect that no agreement to set rates existed between Continental and its correspondents because Continental a lone set the interest rate charged on all charge cards issued through its correspondents. The standard contracts between Continental and its correspondents support that position. The. only fact which could provide any support for any anti-trust theory was that Continental and its correspondents did not compete for charge card customers. That alone does not create an inference of conspiracy. To the contrary, in light of the evidence demonstrating the high costs of the Midwest System, the more reasonable inference is that the correspondents did not compete because they were not in a financial position to do so. The evidence before the District Court shows that Continental set the terms and conditions of its credit card — including the interest rate it would charge cardholders — and conveyed that decision to its correspondents.⁴² The correspondents were free to accept Continental’s terms, affiliate with another system⁴³ or start their own credit card network. We believe the District Court correctly concluded that there was no evidence on which a jury could find a conspiracy between Continental and its correspondents.

With regard to Harris, the District Court found that Harris simply purchased receivables generated by its correspondent banks until January of 1968. At that point Harris offered its correspondents an opportunity to share in the risk and profits or losses on receivables generated by the correspondents. From that point until late 1974, Harris, unlike Continental, let its correspondents decide on the interest rate charged to their customers. Harris required a 1.5% return on its share of those receivables at first, but changed to a set fee paid by the correspondents. At no point during this period did Harris require its correspondents to charge any prearranged interest rate. In 1974 Harris switched to a system similar to Continental’s whereby Harris issued cards to those cardholders referred by its correspondent banks, and Harris alone set interest rates.

With respect to Central, the District Court found that it did not begin soliciting correspondent banks until 1970.⁴⁴ At that time Central issued bank charge cards to some customers referred by correspondents and also permitted correspondents to issue their own cards. Central did not make any provision for interest rates in any contracts with its correspondents.

In the face of what the Court below found to be legitimate business relationships, plaintiffs are unable to point to any evidence of agreement or conspiracy. Here, as in the alleged horizontal conspiracy, plaintiffs can point only to the opportunity to conspire; the ability to conspire; but no evidence of actual conspiracy. The District Court correctly concluded that this is not sufficient to create a genuine issue of material fact as to the existence of a conspiracy. First National Bank of Arizona v. Cities Service, 391 U.S. at 286-288, 88 S.Ct. at 1591-1592. See also Lupia v. Stella D’Oro Biscuit Co., Inc., 586 F.2d 1163 (7th Cir. 1978), cert. denied 440 U.S. 982, 99 S.Ct. 1791, 60 L.Ed.2d 242 (1979).

STANDING TO MAINTAIN THE VERTICAL CONSPIRACY CLAIMS

The District Court noted that plaintiffs lack standing to complain of any injury resulting from Harris’ and Central’s relationship with their correspondent banks. Yet, the Court went on to find that even assuming standing to challenge the alleged vertical conspiracy plaintiffs had failed to point to any significant evidence of an agreement to fix interest rates between Harris and Central and their correspondent banks. Because we affirm the entry of summary judgment on that basis we need not address the standing question as it relates to Harris and Central. With regard to Pullman, however, the District Court dismissed the vertical conspiracy claim solely on the basis of standing. We, therefore, address the question of whether plaintiffs have standing to assert a vertical conspiracy claim against Pullman.

Section 4 of the Clayton Act, 15 U.S.C. § 15, permits anyone who has been “injured in his business or property” to maintain a private action for treble damages. As the Supreme Court’s opinion in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977) indicates, the injury must be a direct one. In addition to this requirement of “antitrust injury,” a plaintiff in any lawsuit must show that he has sustained or is in immediate danger of sustaining some direct injury from the defendant’s actions. O’Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 675, 38 L.Ed.2d 674 (1974); Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). A plaintiff who does not have such a stake in the outcome lacks standing to maintain the action irrespective of the merits of the asserted claim.

The Court below noted, as has this Court, that the distinction between the “antitrust injury” requirement of Section 4 and the more general standing requirement is often blurred. 478 F.Supp. at 297. See also Lupia v. Stella D’Oro Biscuit Co., Inc., 586 F.2d at 1168-69. This is not surprising in antitrust actions as the two requirements overlap considerably. The labels are not important, however. The fundamental requirement is that plaintiffs establish a sufficient nexus between the defendant’s alleged actions and an injury to plaintiffs.

Here the plaintiffs are unable to establish that nexus. The named plaintiffs are cardholders of only Continental’s Midwest chargecards. The fact that they purport to represent Pullman cardholders who would have standing to complain of a vertical conspiracy between Pullman and its correspondents cannot create standing to bring an action. If plaintiffs lack the requisite stake in a controversy at the time the complaint is filed, they may not bootstrap that element into their claim by means of class action certification. Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 734 (3d Cir. 1970). Similarly, plaintiffs who have not suffered antitrust injury from an alleged conspiracy cannot bring themselves within the “target area” simply by purporting to represent those who are. See Lupia v. Stella D’Oro, 586 F.2d, at 1168-69. The District Court correctly concluded “the named defendants could not have been injured by any conspiracy between Pullman and its correspondents and lack standing to raise any claim against Pullman.” 478 F.Supp. at 299.

For the reasons set forth herein, the judgment of the District Court is AFFIRMED.

1 . Weit v. Continental Illinois National Bank and Trust Co., et al., 467 F.Supp. 197, 214 (N.D.Ill.1978); and Weit v. Continental Illinois National Bank & Trust Co., 478 F.Supp. 285, 298 (N.D.Ill.1979).

2 . First National Bank of Chicago (First) was named as a coconspirator, but not as a defendant in this action.

3 . “Pursuant to free market criteria and individual credit ratings.” Plaintiffs Third Amended Complaint, Count I, Prayer for Relief.

4 . 467 F.Supp. at 199.

5 . American did not join the Midwest System until 1969.

6 . See Ill.Rev.Stat., Ch. 161/2, § 106.

7 . For example, State National Bank of Evans-ton was a correspondent of Harris, American, First, Continental and Northern. It affiliated with Continental’s charge card system in September of 1966.

8 . Krazley deposition ex. 8E; Prater deposition, ex. 50; excerpt from Prater deposition, app. 224-225.

9 . Id. at p. 225.

10 . Wood deposition, exhibit 6.

11 . While each bank charged a rate of 1.5% per month, the banks did not employ the identical method of calculating interest. For example, Continental computes interest on an “Adjusted Balance Method”, that is, by calculating interest on the balance due during the previous billing cycle to the date of a payment, and then computing interest on the remaining balance, if any, up to the current statement. Harris employs a “Closing Balance Method” whereby all payments received during a billing cycle are deducted from the previous balance. Central and American compute interest on the basis of an average daily balance during a given billing cycle. Pullman calculates interest on the basis of the balance due at the beginning of a billing cycle, without crediting for payments made. These differing methods of computation result in a slightly different cost of borrowing to the cardholder.

12 . Weit v. Continental, 467 F.Supp. at 207-208, Nt. 22.

13 . Defense counsel continually refer to this agency as the “Comptroller of the Currency”. We note that no such office exists, and under Article I, Section 8 of the U.S. Constitution could not exist.

14 . In plaintiffs’ answers to interrogatories filed January 6, 1978, plaintiffs identified the 964 documents and 53 witnesses on which they intended to rely at trial.

15 . The dissent suggests that plaintiffs produced evidence that Continental, Harris and Pullman knew the interest rates being contemplated by each other. This evidence is that Harris noted that states other than Illinois permitted an interest rate of 1 Vz% per month, and that Continental referred to a “regular l‘/2% per month interest charge” during the course of discussions with the President of Bank Americard. This is hardly evidence that Pullman, Harris or Continental knew what interest charge had been decided upon by each bank. Yet even assuming that awareness of contemplated interest rates is the logical inference to be drawn from those statements, mutual awareness of similar conduct does not run afoul of the Sherman Act. “This awareness must be an element entering into each party’s decisional process, and the basis for inferring that it did so must be something more substantial than a guess.” Brown v. Western Massachusetts Theatres, Inc., 288 F.2d 302, 305 (1st Cir. 1961) (on petition for rehearing).

16 . The record indicates that the Wall Street Journal, on May 24, 1966 noted Bank Americard’s interest rate of l‘/2% per month and that the defendants were aware of this. Ex. A to Continental’s response to Interrogatories, January 3, 1978, pp. 23-24.

17 . The District Court characterized the bulk of this evidence as falling into the “mere possibility range.” 467 F.Supp. at 211. We agree. The fact that the Chairmen of Harris and Continental both served as trustees of Northwestern University is of little relevance, much less probative value.

18 . We note that in both C-O-Two and Esco numerous co-defendants entered pleas of nolo contendere prior to the trial of these named co-defendants.

19 . 178 F.2d at 367. In Pevely the Court reversed the district court’s denial of a motion for judgment of acquittal after the jury returned a guilty verdict.

20 . C -O-Two, 197 F.2d at 496.

21 . In Bendix this Court overturned the trial court’s finding of improper price influencing for lack of evidence. In Independent Iron Works the Court affirmed the trial court’s directed verdict on a concerted boycott claim.

22 . As indicated at footnote 11 infra, the cost of borrowing to the cardholder is not identical at each bank due to the individual bank’s method of calculating interest.

23 . 467 F.Supp. at 210-11.

24 . When the Court in ILC asked the foreman of the jury whether this type of case should be tried to a jury, the foreman responded:

“If you can find a jury that’s both a computer technician, a lawyer, an economist, knows all about that stuff, yes, I think you could have a qualified jury, but we don’t know anything about that.” (Tr. 19,548), 458 F.Supp., at 447.

25 . Remarks of the Chief Justice of the United States, Meeting of Conference of Federal Chief District Judges, Little America Hotel, Flagstaff, Arizona, Aug. 7, 1979.

26 . The dissent attaches considerable significance to the use of the term “regular interest” rate in the discussions with Bank of America. Yet that was the “regular” rate charged Bank Americard holders.

27 . Plaintiffs attempt to classify Cities Service as an “individual refusal to deal” case. It is not. The complaint alleged concerted conduct. Indeed, since Section 1 of the Sherman Act proscribes “every contract, combination ... or conspiracy in restraint of trade ...” individual conduct does not run afoul of Section 1, by definition.

28 . See Klors Inc. v. Broadway-Hale Stores, 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959); U. S. v. Socony Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940).

29 . The original plaintiff was Gerald Waldron. Upon his death the First National Bank of Arizona, his executor, was substituted as plaintiff. See Cities Service, 391 U.S. 253, 259 n. 1, 88 S.Ct. at 1578 n. 1.

30 . 391 U.S. at 277, 88 S.Ct. at 1586.

31 . Id.

32 . A Continental internal memo of August 11, 1966 noted, “if anyone goes in Chicago, others will and this may result in chaos in the market. Could be disasterous [sic] ...”

33 . A Harris internal memorandum of December, 1966 noted, “it would be very difficult for any one bank in Chicago to successfully operate a broad credit card plan in our area because of our unit banking system. And, even if tried, others would soon initiate similar and competitive plans resulting in a chaotic state of affairs . as far as the public and the merchants were concerned.”

34 . For example, the Court in Cities Service noted that in Poller a competitive relationship existed between the plaintiff and defendant. In both Cities Service and the instant case there is no competitive business relationship. 391 U.S. at 285, 88 S.Ct. at 1590.

35 . 365 U.S. at 140, 81 S.Ct. at 531.

36 . 381 U.S. at 670, 85 S.Ct. at 1593.

37 . 467 F.Supp., at 207-208 N. 22.

38 . Generally, the Rules of Evidence apply to pre-trial proceedings including summary judgment considerations. See F.R.E. 101; American Security Co. v. Hamilton Glass Co., 254 F.2d 889, 893 (7th Cir. 1958).

39 . The dissent suggests that 403 is designed to exclude only that evidence which tends to horrify, or evoke sympathy or anger. While the tendency to suggest an emotional decision is one basis for exclusion of evidence under Rule 403, it is clearly not the only one. Advisory Committee Notes quoted in Weinstein’s Evidence ' 403[03].

40 . 478 F.Supp. 285 (N.D.Ill.1979).

41 . For a discussion of Continental’s relationship with its correspondents, see the District Court opinion, 467 F.Supp. at 202-204, 215-216. Harris’ and Central’s correspondent relationships are detailed at 478 F.Supp. 290-294, 297-298. Pullman’s correspondent relationships are set out at 478 F.Supp. 290-291 and 297-299.

42 . See e. g. deposition of Alfred Lindgren, pp. 60-61 and depo., ex. No. 9.

43 . Such as the Bank Americard System which the First had become affiliated with.

44 . Central was itself a correspondent of both Continental and Harris.