City of Tuscaloosa v. Harcros Chemicals, Inc., 95-6234

• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Citation: 158 F.3d 548
• Docket Number: No. 95-6234,95-6234
• Parties: 1998-2 Trade Cases P 72,307, 12 Fla. L. Weekly Fed. C 217 CITY OF TUSCALOOSA; Municipal Utilities Board of Albertville, et al., Plaintiffs-Appellants, Auburn Water Works Board; Jasper Water Works and Sewer Board, Inc., et al., Plaintiffs-Intervenors-Appellants, v. HARCROS CHEMICALS, INC.; Jones Chemicals, Inc., et al., Defendants-Appellees.
• Decision Date: 23 October 1998

Page 548

158 F.3d 548 1998-2 Trade Cases P 72,307, 12 Fla. L.
Weekly Fed. C 217 CITY OF TUSCALOOSA; Municipal Utilities Board of
Albertville, et al., Plaintiffs-Appellants,
Auburn Water Works Board; Jasper Water Works and Sewer
Board, Inc., et al., Plaintiffs-Intervenors-Appellants,
v.
HARCROS CHEMICALS, INC.; Jones Chemicals, Inc., et al.,
Defendants-Appellees. No. 95-6234. United States Court of Appeals,
Eleventh Circuit. Oct. 23, 1998.
Rehearing Denied Feb. 9, 1999.

Page 553

Julia Boaz-Cooper, L. Vastine Stabler, Walston, Stabler, Wells, Anderson & Bains, Birmingham, AL, T. Dudley Perry, Montgomery, AL, John C. Hall, Clarence M. Small, Deborah Alley Smith, Rives & Peterson, Birmingham, AL, for Plaintiffs-Appellants.

John M. Johnson, Wynn M. Shuford, Lightfoot, Franklin, White & Lucas, Birmingham, AL, for Plaintiffs-Intervenors-Appellants.

Patricia A. Conners, Asst. Atty. Gen., Tallahassee, FL, for Amicus Curiae States of FL, and others.

Stanley A. Cash, Huie, Fernambuco & Stewart, Birmingham, AL, David E. Everson, Jr., Stinson, Mag & Fizzell, P.C., Kansas City, MO, for Harcros Chemicals.

James C. Barton, Robert S. Vance, Jr., Johnston, Barton, Proctor, Swedlaw & Naff, Birmingham, AL, for Jones Chemical.

J. Mark White, Birmingham, AL, Joel Summer, Van Waters & Rogers, Kirkland, WA, Keith E. Rounsaville, Trenam, Kemker, Scharf, Barkin, Frye & O'Neill, P.A., Tampa, FL, for Van Waters & Rogers.

Tad G. Long, Bradley, Arant, Rose & White, Birmingham, AL, for Industrial Chemicals.

Andrew P. Campbell, Leitman, Siegal, Payne & Campbell, Birmingham, AL, for P.B. & S. Chemical.

Charles David Deep, Deep & Womack, Henderson, KY, for P.B. & S. Chemical.

Appeal from the United States District Court for the Northern District of Alabama.

Before TJOFLAT and COX, Circuit Judges, and WELLFORD ^*, Senior Circuit Judge.

TJOFLAT, Circuit Judge:

In the instant case, thirty-nine Alabama municipal entities brought suit in the United States District Court for the Northern District of Alabama, alleging that five defendant chemical companies engaged in a conspiracy to fix prices for repackaged chlorine in Alabama in violation of both federal and state antitrust law. The plaintiffs also asserted claims for fraud under Alabama law. In a memorandum opinion, the district court ruled much of the plaintiffs' evidence inadmissible and granted summary judgment to all five defendants on the antitrust claims and the fraud claims. See City of Tuscaloosa v. Harcros Chems., Inc., 877 F.Supp. 1504 (N.D.Ala.1995). We review the district court's evidentiary rulings, reversing in part and affirming in part. We then review the district court's summary judgment rulings. We reverse the district court's entry of summary judgment with regard to three of the five defendants on the antitrust claims, and remand for further proceedings. We also vacate the district court's entry of summary judgment on most of the fraud claims, and remand for further proceedings.

I.

A.

The plaintiffs and plaintiffs-intervenors in this case are thirty-nine Alabama municipal entities that purchase repackaged chlorine for the treatment of drinking water, sewage, and swimming pools. Repackaged chlorine is liquid chlorine that has been pressurized and stored in containers for delivery to, and use by, chlorine consumers. The five defendant corporations are chemical companies

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that repackage or distribute chlorine in Alabama. ¹

At the core of the plaintiffs' claims are their allegations that the defendants colluded with each other to set prices for repackaged chlorine distribution contracts. During the period of the alleged collusion, many Alabama municipal entities purchased chlorine by auction. ² An entity seeking to purchase chlorine would solicit sealed bids from companies that had submitted bids in the past. Once the bids were received, the buyer would publicly open the bids and announce what each competitor had bid. The buyer would then award its contract to the lowest bidder. The plaintiffs allege that the defendants submitted sealed bids based on "list prices" previously determined amongst themselves, and in this way allocated the repackaged chlorine contracts as they wished.

Following investigations of the chlorine industry in the Southeast by the United States Department of Justice and the State of Florida, ³ Alabama's former Attorney General requested authority from a number of Alabama municipal entities to bring an antitrust action against chlorine companies on their behalf. His successor, however, changed course and declined, on behalf of the state, to participate in the proposed litigation. See Harcros, 877 F.Supp. at 1511 n. 19.

Fifteen Alabama municipal entities then decided to proceed independently and brought this action in July 1992. Numerous other municipal entities intervened, and several original plaintiffs withdrew from the case. The complaints filed by the final thirty-nine plaintiffs, ⁴ as amended, presented four counts. The first count alleged that the defendants had engaged in a conspiracy to fix prices, allocate customers or markets, and rig bids in violation of section 1 of the Sherman Act, 15 U.S.C. § 1 (1994). ⁵ The second count asserted that the defendants had engaged in a conspiracy to monopolize the chlorine

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market in Alabama in violation of section 2 of the Sherman Act, 15 U.S.C. § 2 (1994). ⁶ The plaintiffs sought treble damages as relief on these federal antitrust claims pursuant to section 4 of the Clayton Act, 15 U.S.C. § 15 (1994), and requested a permanent injunction preventing future collusion pursuant to section 16 of the Clayton Act, 15 U.S.C. § 26 (1994). ⁷

The third count of the complaints asserted that the defendants conspired to restrain trade in violation of Alabama Code § 8-10-1 et seq. (1993). The plaintiffs sought actual damages and $500 in statutory liquidated damages for each instance of injury or damage resulting from the alleged conspiracy pursuant to Alabama Code § 6-5-60 (1993). ⁸ The fourth count of the plaintiffs' complaints asserted fraud claims under Alabama law. See Ala.Code § 6-5-100 et seq. (1993). The plaintiffs sought compensatory and punitive damages for these claims.

After discovery, the defendants moved to exclude the testimony of two of the plaintiffs' three expert witnesses, and to exclude several pieces of evidence that they asserted were inadmissible hearsay. The defendants also moved for summary judgment.

The district court, in a lengthy memorandum opinion, excluded the purported hearsay testimony, see Harcros, 877 F.Supp. at 1518-21, 1538, and much of the plaintiffs' expert testimony. See id. at 1524-30, 1532. The

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district court then granted summary judgment for the defendants on all claims. See id. at 1521-24, 1532-38. The plaintiffs now appeal, asserting that the district court improperly excluded their proffered evidence and that summary judgment was erroneously entered.

B.

We first review the district court's rulings on the admissibility of the purported hearsay evidence. Rulings on the admissibility of evidence are reviewed for abuse of discretion. See Walker v. NationsBank of Fla. N.A., 53 F.3d 1548, 1554 (11th Cir.1995) ("The admissibility of evidence is committed to the broad discretion of the district court, and the decision to exclude certain evidence will be reversed only upon a clear showing of abuse of discretion."); see also Hines v. Brandon Steel Decks, Inc., 886 F.2d 299, 302 (11th Cir.1989) (applying abuse of discretion standard to hearsay admissibility determination). "A district court by definition abuses its discretion when it makes an error of law." Koon v. United States, 518 U.S. 81, 100, 116 S.Ct. 2035, 2047, 135 L.Ed.2d 392 (1996). Thus, when the district court misinterprets the Federal Rules of Evidence or controlling case law, our review is plenary. Cf. Joiner v. General Elec. Co., 78 F.3d 524, 529 (11th Cir.1996), rev'd on other grounds, 522 U.S. 136, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997).

The factual findings of the district court that underlie its decisions regarding the admissibility of the purported hearsay evidence--such as its findings regarding whether a statement was made in furtherance of a conspiracy, or whether a particular document is a regular business record--are reviewed for clear error. See United States v. Bazemore, 41 F.3d 1431, 1434 (11th Cir.1994); United States v. Turner, 871 F.2d 1574, 1581 (11th Cir.1989). A finding of fact is clearly erroneous when, after reviewing the entirety of the evidence, the reviewing court "is left with the definite and firm conviction that a mistake has been committed." Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)).

After reviewing the district court's rulings on the admissibility of the purported hearsay evidence, we turn to that court's rulings on the admissibility of the plaintiffs' expert testimony. The Supreme Court recently has clarified the standard of review applicable to appellate consideration of determinations regarding the admissibility of expert testimony. See General Elec. Co. v. Joiner, 522 U.S. 136, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997), rev'g 78 F.3d 524, 529 (11th Cir.1996). In Joiner, the Court noted that a district court's evidentiary rulings are reviewed for abuse of discretion. See id. at ----, 118 S.Ct. at 517. The Court then held that Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), did not alter this long-standing rule in the specific context of expert testimony, and in fact did not address the standard of appellate review of such rulings at all. See Joiner, 522 U.S. at ----, 118 S.Ct. at 517. The Court went on to note that a court of appeals should apply this abuse of discretion standard of review uniformly, without regard to whether...