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MEMORANDUM OPINION
Plaintiffs in the above-styled cause are public entities organized and located in Alabama that purchase repackaged chlorine for the treatment of drinking water, sewage, and swimming pools. Defendant chemical com
Experts for opposing parties have characterized the chlorine industry as an oligopoly selling a homogeneous product to an inelastic market on an ongoing basis.
Plaintiffs allege that a relatively small group of firms engaged in a price-fixing conspiracy with respect to price in sealed bid auctions for municipal chlorine procurement in Alabama from 1984 to 1990. Most of the defendants are relatively large, publicly held, for-profit corporations. They repackage chlorine into one-ton and 150-pound cylinders for use in water treatment and other industrial applications. The defendants enjoy substantial nonmunicipal business. They buy raw chlorine at similar prices from a small group of upstream chemical manufacturers and face similar costs and inelastic demand. Rivalry between suppliers is continuous and ongoing, with the same group of firms, usually joined by “outsiders,”
It is plaintiffs’ contention that defendants implemented their pricing agreement by confining pricing to a few individuals. Joe Ragusa
Defendant Harcros Chemicals, Inc. [hereinafter Harcros],
Defendant Van Waters & Rogers, Inc. [hereinafter Van Waters]
Defendant Industrial Chemicals, Inc. [hereinafter Industrial], a chlorine distributor for defendants Jones and PB & S, is organized under the laws of the State of Alabama with its principal place of business in Alabama.
Defendant Jones Chemicals, Inc. [hereinafter Jones] is a chlorine repackager organized under the laws of the State of New York with its principal place of business in New York.
Defendant PB & S Chemical Company, Inc. [hereinafter PB & S] is a chlorine re-packager
Plaintiffs allege the defendants have conspired across state lines to violate federal and state antitrust laws to restrain trade in or affecting interstate commerce by fixing prices, allocating markets, and rigging bids for the sale of repackaged chlorine to public entities, including the plaintiffs, in the state of Alabama. 15 U.S.C. §§ 1, 2; 15 U.S.C. § 26; and Ala.Code § 6-5-60 (1993). The complaint contends that a horizontal arrangement to restrain trade existed among chlorine repackagers/distributors in Alabama during the 1980’s for the purpose of establishing higher prices than would otherwise prevail.
Specific allegations follow:
1. The defendants violated section one of the Sherman Act by exchanging price information for the sale of repackaged chlorine to Alabama public entities;12 allocating contracts or winning bids in geographic markets; refusing to deal with the plaintiffs; and submitting complementary, noncompetitive, or identical bids to public entities; and
2. The defendants fraudulently concealed their illegal conspiracy by submitting prearranged, complimentary losing bids for the supply of repackaged chlorine, giving the illusion of free market competition;13 conducting secret activities in furtherance of the conspiracy; confining knowledge of the conspiracy to a small number of key officials of the defendants; and testifying falsely under oath about their bid rigging scheme during an investigation and prosecution of civil actions by the Attorney General of Florida.
In an effort to prove their ease plaintiffs have outlined seven structural conditions that facilitated the conspiracy: 1) Presence of oligopoly makes price conspiracy easier to accomplish; 2) Product homogeneity simplifies a collusive price agreement; 3) Sealed bidding makes collusion more likely because a cheater cannot hide a price cut; 4) Inelastic demand for chlorine facilitates collusion; 5) Static demand of purchases of chlorine by Alabama public entities establishes their demand in the 1980’s was stable and predictable; 6) High barriers to entry in the repackaging industry make conspiracy plausible; and 7) Conspirators’ similar costs make chlorine conspiracy plausible.
An intervenor complaint was filed October 7, 1992, and amended October 19, 1992. On December 7,1992, the complaint was amended to add additional defendants. During the period of discovery the court granted motions to dismiss complaints filed on behalf of several plaintiffs and dismissed Mayo Chemical Company as a defendant. The parties now stand as listed in the style of the case.
Based on the allegations set forth, plaintiffs seek compensatory damages for defen
On August 22, 1994, Industrial filed a motion for summary judgment. Jones and Van Waters joined Industrial’s motion. On August 25, 1994, PB & S filed a motion for summary judgment, followed by a motion by Hareros the next day. These motions are now before the court, as well as motions to exclude proffered expert testimony of Dr. Robert F. Lanzillotti,
I. CASE HISTORY
Prior to the institution of this suit the United States Justice Department convened a grand jury to investigate the chlorine industry, subpoenaing thousands of documents from the defendants in this ease and from others. Numerous witnesses were questioned. After a lengthy investigation, the Justice Department dropped its investigation and returned the documents to their owners.
A 1989 investigation of the chlorine industry by the Florida Attorney General resulted in the filing of two federal antitrust suits: the “peninsula” case filed in Jacksonville, Florida, and the “panhandle” case filed in Pensacola, Florida. After reading summary judgment briefs and hearing oral arguments in the “panhandle” ease, Judge Vinson announced he would grant defendants’ motion for summary judgment. At that point the State of Florida agreed to settle both eases for partial recovery of its litigation expense.
Aside from the testimony of plaintiffs’ experts, there is no direct evidence of any conspiracy. Dr. Lanzillotti himself testified he had no information there had been any meetings or direct communications, i.e. notes, letters or telephone calls, between any of the defendants concerning the pricing or allocation of chlorine or anything that would be considered conspiratorial.
Plaintiffs maintain defendants had ample opportunity to conspire at annual meetings hosted by chlorine suppliers and at various chlorine committee meetings. The allegation that defendants spoke frequently by telephone is unsubstantiated.
III. EXPERT TESTIMONY
Since there is no direct evidence of conspiracy, expert testimony must be carefully scrutinized. In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. —, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), the Court held that the Federal Rules of Evidence provide the standard for admitting expert scientific testimony in a federal trial.
Fed.R.Evid. 402 is the baseline for interpreting the federal rules:
All relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, by Act of Congress, by these rules, or by other rules prescribed by the Supreme Court pursuant to statutory authority. Evidence which is not relevant is not admissible.
In Daubert the Court defined “relevant evidence” as “that which has ‘any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.’ ” 509 U.S. at —, 113 S.Ct. at 2794, 125 L.Ed.2d at 479. The Court went on to discuss the reliability factor of expert evidence in the following manner:
A “reliability assessment does not require, although it does permit, explicit identification of a relevant scientific community and an express determination of a particular degree of acceptance within that community.” ... Widespread acceptance can be an important factor in ruling particular evidence admissible, and “a known technique that has been able to attract only minimal support within the community,” ... may properly be viewed with skepticism (citations omitted).
509 U.S. at —, 113 S.Ct. at 2797, 125 L.Ed.2d at 483.
In speaking for the Court Mr. Justice Blackmun suggests the following factors, considered by the Court in the instant case, to be considered in a Fed.R.Evid. 104(a) inquiry:
1) Whether the theory or technique can be and has been tested;
2) Whether the theory or technique has been subjected to peer review and publication;
3) The known or potential rate of error or the existence of standards; and
4) Whether the theory or technique used has been generally accepted.
Id, at —, 113 S.Ct. at 2796-97, 125 L.Ed.2d at 483.
The Supreme Court has interpreted Fed. R.Evid. 702 as imposing two distinct requirements for the admissibility of scientific expert evidence: 1) the evidence must be reliable
A. Lanzillotti
At the request of attorneys representing various public entities in Alabama, Dr. Lanzillotti prepared his May 20, 1994, report on the “Alabama Chlorine Litigation” — “an economic analysis of market structure and competitive behavior of repackagers of containerized chlorine (Cl) in 2000# and 150# cylinders, in Alabama over the period 1980 to date.” Report of Robert F. Lanzillotti on the Alabama Chlorine Litigation, May 1994, p. 1. Lanzillotti defined his task in the May 1994 report in the following manner:
to determine whether repackagers of chlorine engaged in a scheme to fix prices or allocate customers among themselves, as outlined in the Complaint. In my opinion, the totality of the evidence adduced so fat-in the litigation supports the conclusion that such a conspiracy did, in fact, operate during the 1980s.
Lanzillotti Report, p. 7.
In determining defendants were engaged in cartels and other collusive arrangements, Lanzillotti outlined basic common economic characteristics: 1) “[C]artel occurrence is most common in markets with few sellers [two to six firms] (emphasis added).” Lanzillotti Report, p. 9. 2) High concentration appears to be most conducive to cartelization efforts. 3) Conditions are most conducive to cooperation among sellers in industries selling products that are standardized or homogeneous — as repackaged liquid chlorine. 4) The elasticity of demand for a product may also constitute a condition conducive to collusion. 5) In markets in which cost components
[E]eonomic analysis and empirical studies indicate that the structural conditions most conducive to collusive activities are those involving a relatively small number of sellers selling homogeneous products with relatively inelastic and predictable demand and a market setting relatively free of rapid technological change in the nature of products, advertising, styling, etc. Moreover, the nature of the sales process, sealed competitive bidding, introduces a complication that induce [sic] sellers to resort to various collusive arrangements in order to achieve their common objectives. The liquid chlorine industry, notably the activities of repackagers/distributors fits these market conditions and product characteristics very closely; hence, it is not surprising to discover the presence of collusive activities.
Lanzillotti Report, p. 11.
In reaching a conclusion that the defendants were engaged in a conspiracy, Dr. Lanzillotti chose as his market study the
Based on his analysis of the Southeast operation generally, and Alabama specifically, Dr. Lanzillotti opined:
The information currently available relative to the Southeast discloses that prices of containerized chlorine to these public entities in Alabama during the period in question were not determined by free and open competition among suppliers. In consequence, public entities paid higher prices than would have prevailed in a truly competitive market.
Lanzillotti Report, p. 1.
Dr. Lanzillotti identified and isolated the product and its relevant geographic markets, noting the following:
[TJotal demand ... is “inelastic” with respect to price, i.e., dollar sales tend to increase less-than-proportionately with reductions in price. ... Hence, given a market structure consisting of only a few major sellers, economic analysis tells us that the prices of a homogeneous [i.e., “fungible”] product like chlorine, price cuts by one seller normally will be followed by other competitors.”
Lanzillotti Report, p. 2.
Lanzillotti opines that from 1984 through 1990, based on straight economic analysis and empirical pricing data, the price-cost margin reflected in the Alabama chlorine industry was noncompetitive. Non-bid customers typically paid list price.
In the case of Harcros, bids were determined primarily by branch managers. Factors considered in calculating bid amounts were distance between the company and municipality, the number of available cylinders, the cost of the product, and the prices in the market. Upon determining the price, managers contacted regional vice president Joseph Ragusa for approval of the recommended bid. The responsibility of deciding the amount of the bid was primarily with the district manager.
Lanzillotti places importance on written comments by Joseph Ragusa on memoranda received from one Harcros salesperson and forwarded to the remaining members of his sales staff (typically 10 to 15 people). Lanzillotti cited as an example of conspiratorial behavior Mr. Ragusa’s January 1985 memorandum, and attached copy of McKesson Chemical’s price list for chemicals sold in Texas and Oklahoma to his salespeople, in which he asked Harcros salespeople to be on the lookout for price lists in their areas. “I have heard that their sales people will not be allowed to deviate from these list prices without a manager’s approval. If they stick to this plan, it can benefit all of us as each chemical distributor faces the same problems — rising costs such as insurance, E.P.A., etc., and low margins must be improved.”
As evidence the defendants were exchanging price information, plaintiffs refer to two memoranda written by Mr. Ragusa in April 1985 in which he mentions a new Jones price list.
As further examples of a pricing conspiracy, Lanzillotti noted Ragusa’s comments: “Arida & Dixie still have not discovered the new world,” and “Ed Morgan at Arkla still in dark.”
According to Lanzillotti cross-elasticity of demand helps identify the relevant product market for antitrust purposes. Products that have a high cross-elasticity of demand are considered similar or identical products for purposes of economic analysis. Lanzillotti stated: “[I]t is my judgment that the relevant product for purposes of this Complaint is clearly liquid, containerized chlorine (Cl) used for treatment of water and sewage. There are no close substitutes.” Lanzillotti Report, p. 3.
In discussing price differentials Lanzillotti noted acknowledgments by various personnel of defendants. Joseph Ragusa
In addressing the concepts of price fixing” (which can take the form of bid rigging), “collusion,” and “conspiracy to restrain trade,” Lanzillotti said: “Competitors who agree among themselves to rotate the winning bid, to bid purposely “low’, [sic] or to bid in some other collectively determined and artificial fashion to allocate customers or territories are engaged in price-fixing under the antitrust laws.” Lanzillotti Report, p. 7.
Dr. Lanzillotti contends the following factors convinced him the defendants participated in bid rigging in the repackaged chlorine market in Alabama.
(1) signaling with complementary [sic] bids to nonincumbencies as a means of securing an agreement to raise the market price; (2) refusal to bid certain public entities; (3) a pattern of “courtesy” or “complimentary” [noncompetitive bids]; (4) frequency of identical or essentially identical bidding; (5) bidding at straight “book” or “list” price with an apparent [if not express] expectation of not winning the bid; and (6)*1516 the very sharp contrast between (a) prices in Alabama and the southeast in general and (b) peninsular Florida (and other sub-markets affected by non-conspirator Allied)32 throughout the period under review.
Lanzillotti Report, p. 15.
Dr. Lanzillotti reached the following “ultimate conclusion:”
Defendants were using explicit price signals through bids not intended to win contracts in order to reach an agreement to bid (and quote) higher prices, while always honoring one another’s incumbencies. This is, in my opinion, explicit price fixing, since essentially there is no doubt about either the price or the intended winner of any contract (or, at least, of any contract over which the Defendants have control).
Lanzillotti Report, pp. 24-25.
B. McClave
In conjunction with Dr. Lanzillotti’s analysis, Dr. McClave performed an analysis of Dr. Lanzillotti’s geographic markets and the product from data of bids and related data for repackaged chlorine sold to municipalities in either one-ton or 150-pound cylinders, or both. From his analysis Dr. McClave concluded vendors’ collusive behavior affected the market at least as early as 1984 and continued through 1990. The conclusion of his May 20, 1994, report for the “Alabama Chlorine Case” states the following:
Conspirators honored one another’s incumbencies with great regularity throughout that period, and used price signals when bidding into non-incumbencies to communicate proposed moves to new and higher price levels. In fact, analysis of available data throughout the Southeastern market indicates that signs of noncompetitive behavior were prevalent throughout the market during that period, with exceptions only where Allied was an active bidder, or a threat to bid. The result was that public entities throughout the southeastern market in general, and in the Alabama sub-market in particular, paid significantly higher prices for liquid chlorine than they would have paid in a competitive market environment.
Report of James T. McClave for the Alabama Chlorine Case, May 1994, p. 14.
Dr. McClave did not prepare the database used in his analysis, but accepted the one prepared by Dr. Lanzillotti, embracing Lanzillotti’s definition of the relevant product, geographic markets and submarkets. All of his analyses focus “on the sale of repackaged liquid chlorine to public entities in the Southeastern market,” particularly “the geographic sub-market consisting of Alabama and Florida panhandle municipalities that let bids on an annual basis.” McClave Report, p. 3. He further divided the submarket into “northern” and “southern” submarkets.
While Dr. McClave concluded the top eight vendors in the market had stable market shares — a sign of collusive behavior — then-stable market shares were not sufficient to establish collusion. He therefore examined their bidding behavior, beginning with an analysis of the “incumbency” rate, the percentage of customers whose business is won by the same vendor from one year to the next. “[Hjigh incumbency rates during a period of suspected collusive behavior, as compared with another period believed to be more competitive, support the inference of collusion during the suspicious period.” McClave Report, p. 5. McClave concluded that incumbency was at the heart of the bidding behavior of the defendants. In discussing the incumbency rates for the Alabama sealed bid submarket (not including the Florida panhandle), McClave called attention to the following:
Note that in 1981 and 1982, the rates are below 50%, meaning that more than half the bid entities were won by different vendors in each of those two years. In 1983 the incumbency rate jumps to 64%, drops back to 50% in 1984, then increases to 78%, in 1985. The incumbency rate peaks in 1986 at 90%, meaning that only 10% turnover in suppliers occurred throughout*1517 the year. In 1987, the rate remains extremely high at 83%. The incumbency rate never recedes below 50% again, although it returned to 75% in 1990.
McClave Report, p. 5.
McClave found a similar pattern existed in the “northern” and “southern” submarkets. Tie bids occurred on only eight percent of the 1981 contracts, jumping to 75 percent by 1983. Tie bids occurred in about 90 percent of the 1986 and 1987 contracts, falling to zero percent by 1992. He concluded: “The incumbency and tie bid rates in the Alabama chlorine sub-market are indicative of collusive behavior.” McClave Report, at 6.
One aspect of plaintiffs’ alleged collusion took place in the sealed bids conducted by municipalities. McClave opines the reason municipalities conduct sealed bid auctions is to obtain, within their requirements and specifications, the lowest price for repackaged chlorine. He noted the pattern of competitive behavior began to disappear in 1983, with prices rising steadily from May onward. The incumbency rate jumped to 80 percent, meaning that only two bids turned over during 1983. McClave opined that higher, less dispersed bids are “atypical of competitive markets.” He cited the following:
By 1985, all bidders are acting in concert. The “going” price is $400 per ton, a price from which VW & R33 never deviates. By September, everyone is bidding at this level. In 1986 the bid level moves to $450 per ton, and everyone is in line. Only where there is concern that the tie bid might not go to the incumbent does the incumbent bid slightly below the established price, as in Okaloosa (FL).
McClave Report, p. 8.
McClave cites the best examples of price signaling appeared in the 1987 “southern” submarket. Chemicals, Inc., a Jones distributor (not a defendant) signaled at $500.00 per ton in its January bid to Panama City, Florida. Van Waters responded with its signal at the same level in its April bid to Mobile, a Jones incumbency. Mayo (not a defendant) won Tuscaloosa at that level in September with Jones, Van Waters and Harcros all bidding $500.00 per ton or higher. By 1988, $500.00 per ton was firmly established. Although signals of $550.00 per ton began, McClave concluded defendants were unable to establish the $550.00 figure because of the entrance of Apperson into the market. Contract turnover remained quite low and the incidence of tie bidding quite high.
McClave accounts for Van Waters submitting 39 bids in the southern sub-market during the 1984-1990 period without winning a single bid as a prime example of “complementary” bidding: giving the appearance of more competition to the entity letting the bid, and serving as effective price signals in markets in which it has incumbencies.
McClave found the “northern” submarket showed relatively coordinated bidding behavior as early as 1982 or 1983, moving to $260.00 per ton in 1983. By 1987 the $500.00 level was reached. Disintegration of the coordinated price began in 1988 when Van Waters took the Gadsden contract from Harcros by bidding $450.00, and Mayo took Birmingham from Industrial by bidding $466.00 per ton. The incumbency rate dropped to under 60 per cent. In 1989 Van Waters bid $334.00 to retain Gadsden, and Industrial bid $340.00 to reclaim Birmingham.
Having accepted Lanzillotti’s economic analysis of chlorine repackaging costs and their effect on price, McClave focused on price/cost and bid relationships over the period from 1981 through 1992. He concluded winning bid prices did not follow the cost trend: “Note that the pattern of the price-cost relationship, particularly the dramatic separation of price from cost beginning in 1984, holds throughout the Southeastern market, except where Allied is active. This supports the conclusion that the effects of the collusive behavior were manifested throughout the Southeastern market.” McClave Report, p. 11.
After concluding defendants had been engaged in collusive behavior in bidding and pricing, McClave provided an econo-metric model to estimate the “but for” competitive price of chlorine.
Summaries of data have been submitted in conjunction with the reports of Lanzillotti and McClave. Fed.R.Evid. 1006 permits admission of such summaries.
IV. HEARSAY TESTIMONY
Other than plaintiffs’ proffered expert testimony, their additional evidence is in the form of hearsay testimony: (A) the Casassas’ testimony about what Mr. Jones, their social acquaintance, told them; (B) a handwritten note written by an unidentified person interpreting Mr. Caine’s statement that Industrial had submitted a “complimentary” bid, plus Mr. Caine’s affidavit; and (C) the statement of Barbara Krysti that her husband Lloyd Krysti told her Joe Ragusa of Hareros was conspiring with his competitors to fix chlorine prices before bids were submitted.
A. Loraine and Peter Casassa
In an effort to prove the conspiracy, plaintiffs have provided the affidavits of Loraine and Peter Casassa, former social acquaintances and occasional golfing partners of Robert Jones, deceased.
Out of court statements by alleged co-conspirators must be made “during the course and in furtherance of the conspiracy.” Fed.R.Evid. 801(d)(2)(E). Our circuit succinctly outlined the time when an out of court statement by a co-conspirator is admissible against a defendant when it said:
The Supreme Court has clarified the analysis for determining when a coconspirator’s statement is made in furtherance of a conspiracy under Rule 801(d)(2)(E). Bourjaily v. United States, 483 U.S. 171,*1519 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987). Before admitting a coconspirator’s statement over an objection that the statement does not qualify under Rule 801(d)(2)(E), a district court must be satisfied that the party offering the testimony has proved by a preponderance of the evidence that the declarant and the defendant were involved in an existing conspiracy and that the statement was made during the course and in furtherance of the conspiracy.
United States v. Byrom, 910 F.2d 725, 734 (11th Cir.1990). See 2 J. Strong, McCormick on Evidence, § 259, at 165 (4th ed. 1992) (The statement or declaration of a co-conspirator must have been made while the conspiracy was in progress and must have constituted a step in furtherance of the venture); 2 J. Strong, McCormick on Evidence, § 259, at 167 (4th ed. 1992) (“Preliminary questions of fact with regard to declarations of coconspirator are governed by Federal Rule 104(a)
The Advisory Committee’s Notes on Admissions under Fed.R.Evid. 801(d)(2) state: “The limitation upon the admissibility of statements of co-conspirators to those made ‘during the course and in furtherance of the conspiracy’ is the accepted pattern. While the broadened view of agency taken ... might suggest wider admissibility of statements of co-conspirators, the agency theory of conspiracy is at best a fiction and ought not to serve as a basis for admissibility beyond that already established. ... The rule is consistent with the position of the Supreme Court in denying admissibility to statements made after the objectives of the conspiracy have either failed or been achieved.” (emphasis added).
Even were Mr. Jones’s statements admissible exceptions to the hearsay rule, they are not binding on Jones Chemical. Other than the Casassas’ testimony, plaintiffs have laid no foundation to prove that the conversation took place or if it did that Jones was speaking for the company. The court assumes plaintiffs want the Casassas’ statements admitted on an alter ego theory, but they have offered nothing to suggest to the court the corporate shield should be pierced. They have failed to prove the statements were made in Florida or what the Florida alter ego law is. Furthermore, they have failed to introduce evidence of the alter ego law in any state. Since the federal court is sitting in Alabama, the court has the right to apply Alabama law. In Alabama the president of a corporation is not the “alter ego” of the corporation. To be the “alter ego” the person must be the “general superintendent” or “manager.” While Mr. Jones may have acted in one or both of those capacities, plaintiffs have introduced no evidence to that effect. “A person who holds the office of president of a corporation is not assumed, in the absence of evidence to the contrary, to have any authority to act or speak for the corporation.” C. Gamble, McElroy’s Alabama Evidence, § 195.01(7), at 522 (4th ed. 1991) (citing Jerome H. Sheip, Inc. v. Baer, 210 Ala. 231, 97 So. 698 (1923)). In an action against a corporation, the declarations or admissions of its president cannot be received to establish a liability against it. Henry & Co. v. Northern Bank of Alabama, 63 Ala. 527, 537 (1879). Accordingly, anything Mr. Jones may have said is not binding on Jones Chemical.
B. Woody Caine
The only evidence offered by plaintiffs of participation by Industrial in a conspiracy is the margin note by an unidentified person at the Board of Water and Sewer Commission of the City of Mobile to a May 5, 1987, bid tabulation which reads:
*1520 * This is a complimentary bid41 As per O.W. Caine, Sales Manager, pass contract on to Jones Chem. 4/28/87
The margin notation is erroneous for several reasons. It is the interpretation by an unidentified person of what Mr. Caine said, not what he said. Mr. Caine was not the sales manager; he had no authority over bids. Mr. Welch, the only person at that time responsible for bidding chlorine, had to approve Mr. Caine’s quotation of something other than list price to a buyer. Caine and Welsh never spoke about this 1987 Mobile bid. Therefore, had Mr. Caine said anything about the bid it was an unauthorized statement. Significantly, Dr. Lanzillotti never mentioned the margin notation when asked to list everything that indicated that Industrial was a conspirator. The notation is inadmissible.
Plaintiffs have additionally offered Mr. Caine’s affidavit as evidence that Jones exercised complete control over chlorine bidding by Industrial. Mr. Caine’s affidavit testimony concerning the Jones/Industrial tie bid, however, is ambiguous: 1) He learned of the tie from Joyce Whitworth; 2) William Welch told him Industrial needed to bow out gracefully; 3) Caine told Mrs. Whitworth and the Mobile bid was awarded to Jones. None of his testimony establishes conspiracy. Caine admits in his declaration that Mr. Welch told him “to bow out gracefully, because it would not be to Industrial’s long-range advantage to get into a fight with its supplier over this one bid.” Mr. Caine adds that he “would have recommended doing the same thing.” Although Industrial wanted the Mobile business, it also needed to preserve its source of supply in South Alabama. Fighting with its sole supplier in the supplier’s hometown over this single bid would show bad business judgment.
The other portions of Mr. Caine’s affidavit add nothing. Events setting forth what Industrial and Jones home offices did are inadmissible hearsay. Mr. Caine was not an active participant and had no first-hand knowledge. His memory of events in Jackson, Mississippi, from 1978 through April 1984, has no bearing on the case at bar. Furthermore, recitation of bid procedures followed in New Orleans from April 1984 through October 1985, when he left Industrial’s employment, establish Mr. Caine had no authority over chlorine bids. At best Mr. Caine’s testimony is hearsay. He has no first-hand knowledge of the procedures he recounts.
Neither can the affidavit stand alone. Mr. Caine clarified his October 7, 1994, affidavit by declaration of October 26, 1994. Had the evidence established Mr. Caine had authority over chlorine bids, his subsequent declaration establishes he never intended to suggest knowledge of a conspiracy. His declaration includes significant information not included in his earlier affidavit. “[A]ll bids that were submitted on behalf of Industrial were with the full hope of getting that business and without any knowledge of what Jones might be planning to bid.” His affidavit was not meant as an admission of wrongdoing. “I was never personally involved in any bid-rigging and have no knowledge of Industrial being involved in any bidrigging.” His earlier reference to Industrial’s giving bid information to Jones referred “to the day-to-day contacts between Industrial as a distributor and Jones as a supplier.” “[Tjhose contacts took place as a part of Industrial’s efforts to obtain price support from Jones for long-term chlorine contracts.” “[Cjhlorine distributors need(ed) price support to bid competitively on long-term contracts.”
For the above-cited reasons the court strikes the affidavit of Woody Caine.
C. Barbara Krysti
Plaintiffs have submitted the affidavit of Barbara Krysti, the widow of Lloyd Krysti, a former Harcros employee. By affidavit Mrs. Krysti testifies her husband told her Mr. Joseph Ragusa was “getting together with his competitors and fixing the price of chlorine before bids were submitted.” Not only is no independent source for the information given, Lloyd Krysti did not have the authority to bid chlorine; Joe Ragusa
Y. CASELAW HISTORY
Plaintiffs claim defendants participated in vertical restraints of trade — restraints imposed by the seller on the buyer. Pertinent to the decision of the court today is a series of cases dating to the beginning of the century. In United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919), the court ruled that a manufacturer’s mere advance announcement that it would not sell to price-cutters did not violate the Sherman Act.Additional Information