ALERT - Federal District Court Dismisses Antitrust Class Action

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April 26, 2011

Recently, a federal district court dismissed an antitrust class action against five ready-mix concrete manufacturers for failure to sufficiently plead conspiracy. The decision is notable because executives from four of the five defendants had previously plead guilty in criminal antitrust proceedings. In re: Iowa Ready Mix Concrete Antitrust Litigation, Judge Mark Bennett rejected the notion that the criminal guilty pleas enhanced the expectation that discovery might uncover the existence of a broader conspiracy. The court explained that the fundamental problem with the complaint was plaintiffs’ failure to allege “facts supporting the existence of an overall plan to fix prices or that each defendant had knowledge that others were involved in the conspiracy.” 

The decision further strengthens the heightened Twombly pleading standard and may mark the end of class action plaintiffs’ ability to rely exclusively on criminal investigations and guilty pleas to form the basis for civil claims. 

The court also found plaintiffs’ allegations of fraudulent concealment lacking. While the court noted the plaintiffs alleged secret meetings, the court found those allegations “merely conclusory allegations providing no factual enhancement.”

For more information please contact your Briggs and Morgan attorney or a member of our Business Litigation or Trade Regulation sections.