ATLANTA (CN) — An attorney for a now-defunct construction equipment distributor asked an 11th Circuit panel on Tuesday to revive an antitrust lawsuit against three equipment dealers who it says colluded to shut the distributor out of the North American sales market.
International Construction Products LLC, which imported Chinese-manufactured Lonking heavy construction equipment, accused Ring Power Corporation and two other dealers of pressuring online auctioneer IronPlanet to end its contract with ICP.
The dealers allegedly believed that the used Caterpillar equipment they were auctioning would be devalued by ICP’s deal to sell new equipment to consumers over IronPlanet’s platform.
In a September 2018 lawsuit, ICP alleged that Ring Power, Thompson Tractor Company Inc. and Ziegler Inc. threatened to withhold their equipment from the auction site unless IronPlanet terminated its relationship with the company.
An attorney for the distributor told a three-judge panel of the Atlanta-based appeals court on Tuesday that IronPlanet “acquiesced to the threats” and ended its March 2014 agreement with his client after just one month.
ICP argues a Florida federal judge unfairly ruled in favor of the dealers last year and required that evidence of their involvement in the alleged conspiracy had to be unambiguous.
U.S. District Judge T. Kent Wetherell II ruled no reasonable jury could find the dealers entered into an agreement to exclude ICP as a potential competitor and to pressure IronPlanet into cutting its relationship with the distributor short.
According to court documents, IronPlanet has said it ended the deal with ICP because the partnership had generated only one sale.
Arguing on behalf of ICP, attorney Kannon Shanmugam of Paul Weiss Rifkind Wharton & Garrison urged the panel to reverse Wetherell's ruling.
“The district court seems to require we either have smoking gun evidence of the conspiracy or evidence that the defendants engaged in parallel conduct.. In fact, what we really have here is both,” Shanmugam said. “I think it’s pretty clear from the case law that where defendants share the same ends, they don’t have to use the same means.”
Shanmugam pointed to a “flurry of phone calls” from Frank Fowler, a Ring Power executive, to other dealers in the days and hours before IronPlanet took ICP off its platform as circumstantial evidence of the conspiracy.
In his ruling, Wetherell made note of the cozy relationship between the auction site and the equipment dealers. Both Ring Power and Thompson Tractor Co. had existing business relationships with IronPlanet and Ring Power was also a minority shareholder of the site, according to the order.
But Wetherell found that the dealers’ communications with IronPlanet “do not contain any express or implied threats and … amount to nothing more than mere inquiries and expressions of concern about the impact of IronPlanet’s deal with Plaintiff on the heavy construction equipment industry.”
An attorney for Ring Power, Gerald Giurato of Murphy & Anderson, told the 11th Circuit judges that phone calls between Fowler and IronPlanet CEO Greg Owens days before ICP was removed from the site were not unusual.
“Fowler and Mr. Owens talked regularly,” Giurato said. “Ring Power was an investor in IronPlanet… There were 74 investors in IronPlanet. They were interested in what was happening at the time, they wanted to know what was happening with their investment.”
Attorney Jeremy Heep of Troutman Pepper, who represents Thompson Tractor Co., echoed Giurato's arguments, telling the panel that phone calls between his client and Ring Power were simply part of a “pro-competitive business transaction.”
But the actual content of the calls between the various parties is unclear. Members of the panel questioned whether the conversations were merely expressions of concern or evidence of a pressure campaign.
Senior U.S. District Judge Harvey Schlesinger, a George H.W. Bush appointee sitting by designation from the Middle District of Florida, asked whether it was ICP’s responsibility to establish what the calls were regarding.
“Just because there were calls doesn’t mean you can let a jury speculate on what the calls were about,” the judge said. “What if the telephone calls were about are we going to play golf on Saturday? Does that give enough for a jury to speculate that they were colluding?”
Shanmugam argued this is a classic example of a situation where a jury could draw inferences based on the evidence to find that the calls were made in furtherance of the conspiracy.
The attorney also pointed to emails sent to IronPlanet indicating that a deal to auction Thompson Tractor equipment would remain in a “holding pattern” unless the auction site issued a statement regarding the deal with ICP.
Asked by Donald Trump-appointed U.S. Circuit Judge Elizabeth Branch how this evidence was linked to show a “concerted action,” Shanmugam replied that a jury should decide whether the evidence shows coordination.
Schlesinger and Branch were joined on the panel by U.S. Circuit Judge Britt Grant, another Trump appointee.
The 2018 lawsuit filed by ICP was preceded by a 2015 lawsuit against Caterpillar in Delaware federal court. In September, a Delaware federal judge refused to find in favor of Caterpillar and ruled that a jury could find it had pressured IronPlanet to end its business relationship with ICP.
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