JAMES R. BROWNING, Chief Judge:
The district court granted summary judgment to the Secretary in an action for violation of the overtime provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., during the period from February 1, 1983 to June 28, 1985.
In opposition to the motion for summary judgment, Liu relied on his sworn declaration in which he asserted that he had paid an overtime premium for piecework performed during overtime hours for all pay periods except the period ending April 6, 1985, and that during this one period he had deviated from his practice of prior and subsequent pay periods on the mistaken advice of an accountant friend whom he named. Liu attached a "piecework register" purporting to show a dollar amount of piecework performed by each employee which was less than the total compensation paid to employees who had worked overtime by an amount equal to overtime premiums properly calculated. Liu asserted in his declaration that his piecework register and payroll records were accurate. He also submitted sworn answers to interrogatories stating he paid the proper overtime premium and describing the manner in which the premium was calculated — a method the Secretary concedes was the proper one for calculating overtime for employees paid on a piecework basis.
The issue is whether the evidence created a conflict that could only be resolved at trial regarding the central issue of whether an overtime premium was paid during pay periods other than that ending April 6, 1985.
The Secretary argues the district court was authorized to grant summary judgment
In a case such as this in which the opposition to a motion for summary judgment rests upon sworn statements, the Secretary's reading of Matsushita would abrogate the long-standing rule that credibility may not be resolved by summary judgment — a rule reiterated in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), within ninety days after Matsushita was filed: "Credibility determinations ... are jury functions, not those of a judge ... ruling on a motion for summary judgment.... The evidence of the non-movant is to be believed...." Id. at 255, 106 S.Ct. at 2513.
It is clear from the Matsushita opinion that the Court was not speaking of direct evidence, but of circumstantial evidence. Matsushita authorizes an inquiry on summary judgment into the "implausibility" of inferences from circumstantial evidence, particularly in antitrust conspiracy cases, not an inquiry into the credibility of direct evidence.
This case does not involve inferences from circumstantial evidence. Liu's
Our opinions on summary judgment subsequent to Anderson and Matsushita have honored the difference between weighing direct evidence and refusing to draw unreasonable inferences from circumstantial evidence. We have upheld summary judgment on the basis of Matsushita's "implausibility" standard only where the non-movant relied on inferences from circumstantial evidence.
Turning to inferences from circumstantial evidence, we said:
Id. at 631-32.
We reiterated "[w]here there is no direct evidence of a conspiracy, the defendant may discharge its summary judgment burden by proffering a `plausible and justifiable' alternative interpretation of its conduct that rebuts the plaintiff's allegation of conspiracy." Id. at 632 (emphasis added). And again "[w]here an antitrust plaintiff's allegation of a conspiracy is based solely on indirect evidence that is capable of inferences of both lawful and unlawful behavior, the plaintiff must produce some evidence tending to exclude the possibility that the defendant acted independently." Id. (emphasis supplied).
Other circuits also have explicitly noted that Matsushita's implausibility analysis is confined to drawing inferences from circumstantial evidence. See Arnold Pontiac-GMC, Inc. v. Budd Baer, Inc., 826 F.2d 1335, 1338 (3d Cir.1987) (reversing summary judgment and distinguishing Matsushita because "here plaintiff, unlike the plaintiffs in Matsushita, has produced direct evidence of a conspiracy"). In Leonard v. Dixie Well Serv. & Supply, Inc., 828 F.2d 291 (5th Cir.1987), the Fifth Circuit reversed a summary judgment based upon the district court's conclusion that the movant's documentary showing on the central issue of fact was "unreasonable" in contrast to the "inaccurate and imprecise recollections" of the testimony of the non-movant and his witnesses on the same issue. Id. at 293. Noting Matsushita's doctrine that "a judge may require parties making an `implausible' claim to `come forward with more persuasive evidence to support their claim than would otherwise be necessary' to avoid summary judgment" (id. at 294), Judge Rubin emphasized, "The Supreme Court has not, however, approved summary judgments that rest on credibility determinations." Id. He continued:
Because Liu's sworn statement that he paid the proper overtime premium was "direct evidence of a material fact" (T.W. Electric, 809 F.2d at 631), the district court erred in granting summary judgment to the Secretary.
AFFIRMED IN PART, REVERSED IN PART and REMANDED.
In Richards v. Neilsen Freight Lines, 810 F.2d 898 (9th Cir.1987), we affirmed summary judgment in reliance on Matsushita where there was no direct evidence of the antitrust conspiracy and the circumstantial evidence "was as consistent with permissible competitive behavior as with illegal conspiracy." Id. at 904. We explained that Matsushita addressed inference-drawing: "the only inferences permitted ... are those that are reasonable given the substantive law which is the foundation for the claim or defense.... In the context of the case before us, the substantive law is the law of antitrust, and if the claim makes no economic sense, a speculative inference from the jury will not help it. In such an instance, the record on summary judgment must contain further persuasive evidence if it is to support the claim." Id. at 902. See also The Jeanery, Inc. v. James Jeans, Inc., 849 F.2d 1148, 1152, 1157, 1160, 1163-64 (1988); Wilcox v. First Interstate Bank of Oregon, N.A., 815 F.2d 522, 525-28 (9th Cir.1987) (sustaining the grant of JNOV on weak circumstantial evidence of a price fixing conspiracy).
United States v. King Features Entertainment, Inc., 843 F.2d 394, 399 (9th Cir.1988) is not to the contrary. The sole issue in that case was whether a contract interpretation was plausible, which "is a matter of law." Id. at 398. It is of course permissible on summary judgment to assess the plausibility of a legal argument, as opposed to assessing the weight or credibility of direct evidence of a material fact.