Ten big defendants and then there were none

The U.S. District Court for the Southern District of Florida, Miami, can tend to more pressing matters than In Re Florida Cement and Concrete Antitrust Litigation, a case of alleged producer price-fixing and market allocation originally scheduled for jury trial this month. Taxpayers will be spared the expense, while court staff and jurors are relieved of discovering a recurring obstacle in 25 months of case proceedings: Insufficient evidence to support alleged illegal behavior among Sunshine State producers with integrated cement and ready mixed businesses.

Defense counsel stood ready to counter at trial plaintiffs’ claims and prove the immense difficulties their clients would have executing a conspiracy that would boost profits in ready mixed concrete. Too many relationships, loyalties and commitments sprinkled among too many parties, customers, and disparate markets. Perhaps not admissible in court, we can add that defendants’ management teams are too smart to risk heavy fines, career ruin or prison for a few extras dollars per yard.

In mid-March, Florida District Court filings, Florida Antitrust parties confirmed a settlement they reported the prior month to the U.S. Court of Appeals for the Eleventh Circuit, Atlanta. The settlement is among counsel for plaintiffs, a group of small Florida contractors, and defendants, Cemex Corp., Florida Rock Industries, Tarmac America LLC and Prestige AB Management. Terms were not disclosed, nor subject to court approval.

Florida Antitrust arrived at the appellate court after the district court denied class certification for two plaintiffs groups, Direct Purchaser and Indirect Purchaser. A concurrent ruling in early-January allowed both groups to petition the Eleventh Circuit Court for a possible review of the certification decision, an option Direct Purchaser counsel exercised. A class action would have enabled plaintiffs to pursue antitrust law violation claims—and injunctive relief plus damages—with greater economy than the “individualized inquiry” to which they were bound by the Florida court ruling.

The case emerged in January 2010 from complaints alleging that 10 integrated cement and ready mixed concrete producers had engaged in a price-fixing and market allocation conspiracy throughout Florida, dating to at least 2000. In July 2010, plaintiffs withdrew claims against Lafarge North America and Holcim (US) Inc., and scaled the purported conspiracy timeline to 2004–2009. The following month saw the court dismiss six defendants, or subsidiaries of the main defendants named in the original complaint, who were alleged to have participated in cement price-fixing and market allocation.

In January 2011, plaintiffs amended their complaint, alleging a ready mixed price-fixing and market-allocation conspiracy among the final four defendants during 2008–2009. In a late-2011 hearing on the class certification, their attorneys entered an expert witness’ analysis of transactions during the purported conspiracy window; it demonstrated how a variety of customers had purchased ready mixed at levels below those indicated in $25/yd. price increases defendants had announced for fall 2008.

The price increase announcements were central to plaintiffs’ claims. In their original motion to dismiss the case, defense counsel countered by citing the Supreme Court’s view of uniform price increases among competitors. Defined in high court precedent as “conscious parallelism,” such activity is to be expected in concentrated commodity industries, attorneys contended. Defense counsel also invoked the most recent Supreme Court ruling with major antitrust case implications, 2007’s Bell Atlantic Corp. v. Twombly, which set a high threshold of plausibility for plaintiff claims.

As Florida Antitrust fades, may the court precedents that derailed its path to trial continue to protect from sketchy claims the honest competitors behind nearly every yard this industry produces.