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Holcim And Lafarge Withdrawals Signal Shifting Sands In Florida Antitrust Litigation

An amended complaint in the In Re Florida Cement and Concrete Antitrust Litigation case exhibits a narrower time frame during which plaintiffs allege

Don Marsh

An amended complaint in the In Re Florida Cement and Concrete Antitrust Litigation case exhibits a narrower time frame during which plaintiffs allege federal antitrust law violations among a shrinking defendant pool. Filed July 12 in the U.S. District Court for the Southern District of Florida, Miami, and superseding a January 2010 complaint, the document names 10 defendants representing the cement, ready mixed and block entities behind the Sunshine State's vertically integrated producers Û Cemex, Continental Materials, Florida Rock, Preferred Materials, Tarmac and Votorantim Cementos North America. Each has overlapping presence in certain Florida markets. Absent in the amended complaint are Lafarge North America, Holcim (US) Inc. and Eastern Cement Corp., each named a defendant early on.

Plaintiffs now allege defendants participated in a market-allocation and price-fixing conspiracy dating to 2004; the original complaint alleged a time frame to at least 2000. Plaintiffs support alleged collusion by charting $3-$15/ton cement price increases defendants announced or implemented from 2004-2009, a period marked by residential building volatility; and, ready-mixed price increases throughout 2008 that saw defendants reportedly commanding $100/yard in the face of lower construction volume. Court documents describe such price increases as consciously parallel behavior.

Although the amended complaint offers more detailed instances of price increases than the original, plaintiffs would appear to face the hurdle encountered in defendants' motion to dismiss. Defense counsel began the exhaustive, early-March filing with this argument: The Supreme Court has expressly held that such conscious parallelism is to be expected in concentrated commodity industries like those alleged by Plaintiffs and does not amount to a Sherman Act violation.

Plaintiffs requested dismissal of Lafarge NA in proceedings last month. The plaintiffs came to understand that whatever evidence there is, none of it tied Lafarge to an alleged conspiracy, says Lafarge NA counsel Mark Nelson, partner with Cleary Gottlieb Steen & Hamilton, LLP in Washington, D.C. We see no evidence of conspiracy at all and do not see any merit to the complaint as a whole.

Judge Cecilia Altonaga honored plaintiffs' request and ordered them to file an amended complaint by July 12. In their motion to dismiss, defense counsel challenged allegations against Lafarge NA, Holcim (US) and (now bankrupt) Eastern Cement, especially noting the scope of their Florida business activities compared to defendants with much greater market presence and vertical-integration potential. Within Florida, defense counsel argue, a) Eastern does not have concrete businesses and has traditionally encouraged and promoted independent concrete producers; b) Holcim operates one cement terminal, but no concrete businesses; and, c) Lafarge NA's presence is limited to a Jacksonville cement terminal and four ready mixed plants in the panhandle.