Antitrust Concrete – Price Fixing & Market Allocation – Civil Practice

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Plaintiffs allege that defendants, who produce ready-mix concrete, engaged in secret communications, price fixing, and the dividing up of markets in South Carolina and Georgia. Plaintiffs’ allegations are sufficient to state a restraint-of-trade claim under § 1 of the Sherman Act.

The court denies defendants’ motions to dismiss.

Plaintiffs’ allegations describe who took part in the alleged restraint of trade, by what means those individuals arrived at the decision to restrain trade, and how the plan was implemented. The complaint also alleges that plaintiffs were injured when they paid substantially more for ready-mix concrete than they would have paid in the absence of the conspiracy. The complaint also refers to national data, which plaintiffs assert demonstrates that the four markets at issue here “uniformly exhibited average prices above those reflected in national and South Regional PPI (Producer Price Index) data for Ready Mix Concrete.”

The complaint alleges something more than parallel conduct and therefore satisfies the plausibility pleading standard for a conspiracy claim pursuant to § 1 of the Sherman Act.

Sherman Act Claim

Defendants ask the court to narrow the scope of the alleged conspiracy, both as to the time period and the affected markets. Having decided that the allegations support the claim, the court has not located Fourth Circuit precedent as to the propriety of narrowing a § 1 conspiracy claim at the Rule 12(b)(6), FRCP, stage. After reviewing out-of-circuit authority and the parties’ arguments, the court declines to narrow the claims at this stage, in large part because plaintiffs adequately allege a conspiracy that existed prior to September 2011 and in the Charleston market.

Article III Standing

Although defendant Lafarge North America Inc. discontinued its concrete operations in Georgia and South Carolina in mid-2011, since the complaint alleges defendant Lafarge’s participation in the alleged conspiracy between January 1, 2010, and September 2011, plaintiffs adequately allege standing under U.S. Const. art. III.

Statute of Limitations

Plaintiffs commenced this action on November 22, 2017, and a four-year statute of limitation applies to federal antitrust claims. However, the statute is subject to tolling.

Plaintiffs allege that the illegal price-fixing, bid-rigging, and market allocation activities are “inherently self-concealing,” and that defendants concealed and pursued these activities “in a manner that precluded detection.”

The complaint identifies (1) the representatives of several defendants as orchestrating price increases, (2) the representative of a couple of defendants as monitoring the market on behalf of the conspiracy, and (3) representatives of all defendants as engaging in ongoing communications for the purpose of furthering and enforcing the conspiracy. The question is a close one, but the court finds that plaintiffs have alleged affirmative acts under Supermarket of Marlinton, Inc. v. Meadow Gold Dairies, Inc., 71 F.3d 119 (4th Cir. 1995).

Furthermore, the complaint’s allegations do not indicate that plaintiffs had information that would have prompted a reasonable person to inquire. Rather, plaintiffs assert they learned of the alleged conspiracy in July 2017, when they learned of a federal lawsuit—brought by defendants’ competitors—against some of the defendants herein.

Plaintiffs’ allegations are sufficient to support fraudulent concealment and therefore are sufficient to invoke the equitable doctrine of tolling.

Personal Jurisdiction

Defendant Evans Concrete LLC contests the court’s exercise of personal jurisdiction over it.

Plaintiffs argue, inter alia, that the court has jurisdiction over Evans pursuant to the conspiracy theory of jurisdiction. To succeed under this theory, plaintiffs must make a plausible claim that (1) a conspiracy existed, (2) Evans Concrete participated in the conspiracy, and (3) a co-conspirator’s activities in furtherance of the conspiracy had sufficient contacts with South Carolina to subject that conspirator to jurisdiction in South Carolina.

It is undisputed, at least at this stage, that certain named individuals represented Defendants Lafarge, Argos USA, and Coastal, and that those defendants have minimum contacts with South Carolina. Furthermore, the complaint alleges that the illicit agreements to fix prices and charge fees applied to customers of ready-mix concrete in the Hilton Head/Bluffton market and the Charleston market, as well as the Savannah and Statesboro markets, with the result that customers in all of these markets paid substantially more for ready-mix concrete than they would have in the absence of the conspiracy. Accordingly, the court finds that plaintiffs have demonstrated a conspiracy theory of jurisdiction.

Viewing the facts in plaintiffs’ favor, the court also finds that Evans Concrete knew or should have known that one or more of its co-conspirators were acting in South Carolina and would have had a reasonable expectation that it could be brought into the state.

Motions denied.

Pro Slab, Inc. v. Argos USA LLC (Lawyers Weekly No. 02-045-19, 37 pp.) (Bruce Howe Hendricks, J.) 2:17-cv-3185. Chad McGowan, Daniel Richard Karon, Eric Penley, Frederick Bergen, Gregory Paul Hansel, Irwin Levin, Jessica Servais, Karl Twenge, Michael Sanford Smith, Randall Weill, Renae Steiner, Richard Shevitz, Russell Thomas Burke, Scott Gilchrist, Vess Miller and Vincent Esades for plaintiffs; Casey Erin Lucier, Howard Feller, Johnny Brent Justus, Nicholas Giles, Thomas Richmond McPherson, Justin Gunter, Katrina Hodges, Matthew McCoy, Robert Brennan, Catherine Marie Bolger, Geoffrey Douglas Oliver, Gregory Hanthorn, Lindsay Livingston Builder, Samuel Outten, Allan Charles Galis, David Michael Burkoff, F. Cordes Ford, Jeffrey DeLoach and Bethany Lynne Edmondson. D.S.C.