In In re Concrete and Cement Additives Antitrust Litigation, the District Court for the Southern District of New York recently dismissed with prejudice claims brought by a proposed class of construction companies and concrete distributors against the world’s largest producers of concrete and cement additives (“CCAs”). The class complaint alleged that executives of the defendants’ French affiliates coordinated a global conspiracy to fix the price of CCAs that allegedly inflated prices worldwide. The court, however, dismissed the class complaint for two main reasons.
First, the plaintiffs failed to allege any agreement to fix prices for CCAs in the United States among the U.S.-affiliate producers of CCAs—as opposed to the French-affiliates and non-party French CCA producer Chryso S.A.S. Although plaintiffs alleged that defendants’ French affiliates regularly communicated about CCA prices, they did not allege any direct evidence that the U.S. defendants reached any agreement about CCA prices in the U.S. Nor did they allege sufficient evidence of “parallel conduct” among the U.S.-affiliate defendants, as their pricing of CCAs was “vastly dissimilar”, changing at different times, in different amounts, and on different CCA products.
Second, the Court rejected class plaintiffs’ argument that they could plead a viable antitrust cause of action stemming from defendants’ French affiliates’ conduct in Europe under the Foreign Trade Antitrust Improvements Act (“FTAIA”). The FTAIA excludes from the reach of U.S. antitrust law conduct occurring abroad unless it has a “direct, substantial, and reasonably foreseeable effect” on domestic (or import) commerce in the U.S.
Here, plaintiffs’ theory was that the French defendants knew their U.S. counterparts would raise U.S. prices in response to European price increases. Otherwise, plaintiffs alleged, large multinational customers could exploit lower prices in other markets through cross-border arbitrage, undermining the allegedly global price-fixing scheme. But the Court rejected that theory as “wholly implausible” because plaintiffs failed to allege that U.S. CCAs were interchangeable with CCAs sold in other countries, that any U.S. customer had ever purchased a CCA from a French supplier, or that any of the U.S. defendants had actually implemented parallel price increases. Indeed, the Court reasoned, plaintiffs’ global-arbitrage theory “would permit the U.S. to extend the reach of its antitrust enforcement regime to any foreign jurisdiction so long as plaintiffs minimally pled a global market for the relevant product.” Such interference with the sovereign interests of other nations, the Court held, “is not what the FTAIA intends or permits.”
The Concrete decision underscores the high bar plaintiffs face when attempting to bring allegations of foreign anticompetitive conduct within the reach of U.S. antitrust law. In such situations, courts will require plaintiffs to allege concrete facts suggestive of a conspiracy to inflate domestic prices within the United States, and not just generalized allegations of a unified global market in which prices anywhere supposedly affect prices everywhere.