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Defense Motions To Dismiss Florida Antitrust Case

Defense attorneys for the 10 major producers named in In Re Florida Cement and Concrete Antitrust Litigation have moved to dismiss the prospective class-action

Don Marsh

Defense attorneys for the 10 major producers named in In Re Florida Cement and Concrete Antitrust Litigation have moved to dismiss the prospective class-action case, contending: Plaintiffs' claims are based on a fundamental misconception of substantive antitrust law and relevant pleading standards.

The U.S. District Court for the Southern District of Florida, Miami, case stems from late-2009 complaints alleging a price-fixing conspiracy and market allocation Û spanning 2000-2009 Û among Cemex Corp., Eastern Cement, Florida Rock Industries, Lafarge North America, Lehigh Hanson Inc., Oldcastle Inc., Suwannee American Cement, Titan America and Votorantim Cementos North America (VCNA). Consolidated complaints entered in January on behalf of Direct Purchaser and Indirect Purchaser plaintiff classes seek treble damages, injunctive relief and recovery of legal fees.

Through their 102-page motion, supported by exhaustive discussion of Sherman Antitrust Act and 80 years of Supreme Court and Federal court rulings, defense attorneys challenge plaintiffs' claims and basis of their claims; absence of claims indicating damage plaintiffs incurred from alleged activities; and, claims predating October 2005, based on federal and state statutes of limitations.

Defense counsel devotes considerable discussion in the Motion to Dismiss to material and product pricing dynamics. Attorneys note that plaintiffs rely on purported consciously parallel behavior, including cement and ready mixed concrete price increases certain defendants instituted in summer-fall periods of 2006 and 2008, as evidence of anti-competitive actions. They then cite the Supreme Court's view that conscious parallelism is to be expected in concentrated commodity industries like those alleged by plaintiffs and does not amount to Sherman Act violation. The high court, defense counsel adds, recently emphasized that allegations of parallel business conduct coupled with bare assertions of conspiracy will not suffice to state a claim under the Sherman Act. That argument is the motion's first of numerous references to Bell Atlantic Corp. v. Twombly, a 2007 ruling in which the Supreme Court sets a high threshold of plausibility for plaintiff claims in antitrust cases.

Defense attorneys also challenge a principal piece of evidence Û potentially the springboard of plaintiffs' complaints Û within a customer allocation conspiracy: A February 2009 letter from a purported whistle-blower to the Department of Justice. A former manager for (VCNA-owned) Prestige Block, Inc. describes in the letter a meeting in which the company president indicated Prestige would not seek customers of another defendant, Cemex. Such an Îarrangement,Ì defense attorneys contend, could just as plausibly indicate that each company independently was aware that pursuing the other's customers could result in reciprocal behavior that would lead only to reduced revenues without any corresponding gain in quantities sold ÷ Avoiding the initiation of a price war that likely would result from the pursuit of each other's customers on price would be in the rational independent business interest of each Defendant.

Continuing discussion of the letter, defense attorneys contrast plaintiffs' assertion of a so-called cover-up of anticompetitive practices against an acknowledgement that Prestige management permitted the letter's author to discuss alleged illegal conduct with the Department of Justice. The cover-up allegations reveal that the entirety of Plaintiffs' claims of an industry-wide conspiracy are based on the rank speculation of a disgruntled former employee of a single Defendant ÷ That the Complaints are rife with bare allegations and bald conclusions, notwithstanding the cooperation of this purported whistleblower, is perhaps the most persuasive evidence that Plaintiffs are engaged in a fishing expedition, hoping to leverage costly discovery into a lucrative settlement of an otherwise frivolous claim based only on pleadings that are devoid of any plausible inferences of conspiracy.

A schedule issued in late-March, including a potential jury trial date of April 2012, suggests the court has reserved ample time to review the Motion to Dismiss.