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Florida Antitrust plaintiffs watch sun set on their class action quest

Plaintiffs alleging a price-fixing and market-allocation conspiracy among four major Florida ready mixed producers began the new year with a court order detouring the hospitable path they sought to injunctive relief and damages.

The order raises litigation burdens and costs in In Re Florida Cement and Concrete Antitrust Litigation, which has proceeded since early 2010 in U.S. District Court for the Southern District of Florida, Miami. The case has shrunk from a five-year scope and 10-defendant pool to one alleging a 2008–2009 conspiracy among Cemex Inc., Florida Rock Industries, VCNA Prestige Ready-Mix Florida Inc., and Tarmac America LLC. Central to plaintiffs’ allegations are price increases the latter three producers implemented after Cemex announced a $25/yard bump effective October 2008.

Judge Cecilia Altonaga denied motions to certify as class actions suits for Direct Purchaser and Indirect Purchaser plaintiffs, spanning small contractors and their customers. Her order is laden with technical discussion and antitrust case precedent; that aside, the facts of ready mixed concrete production, sales and delivery do not seem to align with standards plaintiffs must meet to enjoy a class action’s economy of scale.

“Denial of class certification is generally considered a major win for the defense because it effectively ends the class action and places plaintiffs in a position to litigate their claims individually,” says Andrew Friedman, a partner in the Antitrust Competition Policy and Trade Regulation practice of Patton Boggs LLP, Washington, D.C. “Class actions help streamline costs to plaintiffs' counsel by consolidating evidentiary matters for what may be hundreds of individual claims. Also, if most individual plaintiffs do not have large dollar claims, class actions can help attract counsel when individual claims do not carry much incentive for plaintiffs' lawyers, particularly when faced with a large corporate defendant.”

Judge Altonaga discusses the “common impact” a class of plaintiffs needs to demonstrate for a price-fixing conspiracy. She concurs with findings of defendants’ Washington, D.C.-based expert, Janusz Ordover, who examined price lists and transaction data from the alleged conspiracy window. He concluded that “not only did price changes vary substantially across Defendants, time, product, geographies, and customers, but also that a large fraction of sales were made at lower or the same prices as before the [per-yard increase] announcements.” The judge also cites Dr. Ordover’s contention that the Concrete industry in Florida “includes thousands of unique product mixes, distinct local geographic markets, and separate customer agreements,” necessitating individualized inquiry to assess whether any class member paid more as a result of the purported conspiracy.

“There are significant differences between the market for Concrete throughout the different geographic regions of Florida, between large-volume and small-volume purchasers, and between customers who have long-standing relationships with suppliers and those who do not,” Judge Altonaga concludes. “The price of concrete is affected by numerous other individual factors including the specific mix of the Concrete and the proposed end-use. Given the diversity of the Concrete market throughout Florida, Plaintiffs have not satisfied their burden of showing that the alleged antitrust impact is susceptible to common proof at trial.”

After issuing the order, she stayed all case proceedings and advised plaintiffs of filings that could enable them to pursue an Eleventh Circuit Court review. Regardless of the filings or case outcome, the judge and defendants’ counsel should be credited with entering into the federal court record a substantive, current take on the laws of ready mixed concrete commerce.