Richter Concrete Corp. v. Hilltop Basic Resources, C-1-76-512.

• Court: United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
• Citation: 547 F. Supp. 893
• Docket Number: No. C-1-76-512.,C-1-76-512.
• Parties: RICHTER CONCRETE CORP., Plaintiff, v. HILLTOP BASIC RESOURCES, INC., et al., Defendants.
• Decision Date: 07 April 1981

547 F. Supp. 893

RICHTER CONCRETE CORP., Plaintiff, v. HILLTOP BASIC RESOURCES, INC., et al., Defendants.

No. C-1-76-512.

United States District Court, S. D. Ohio, W. D.

April 7, 1981.

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Gene I. Mesh, Cincinnati, Ohio, for plaintiff.

Jacob K. Stein, Murray S. Monroe, Cincinnati, Ohio, for defendants.

OPINION AND ORDER

HOGAN, Senior District Judge.

This is a private antitrust action brought by the Richter Concrete Corp. against Hilltop Basic Resources, Inc., a former producer of ready-mix concrete, and the Marquette Cement Co., a former supplier of cement to, among other companies, Hilltop. Jurisdiction is pursuant to 28 U.S.C. § 1337, as the plaintiff alleges violations of 15 U.S.C. §§ 1 and 2.

Trial was commenced to a jury on October 6, 1980, and at the close of plaintiff's case both defendants moved for directed verdicts pursuant to Rule 50, Federal Rules of Civil Procedure. After full hearing on the motions, and after considering the evidence in the case, the Court concluded that defendants' motions were well taken and granted them. This Opinion and Order supplements the Court's ruling from the bench.^*

I.

The Court is well aware that summary procedures, including directed verdicts, should be used "sparingly in complex antitrust litigation where motive and intent play leading roles ..." Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962). However, where a plaintiff fails to come forward with enough evidence "to support a reasonable finding in his favor, a district court has a duty to direct a verdict in favor of the opposing party." Chrisholm Brothers Farm Equipment Co. v. International Harvester Co., 498 F.2d 1137, 1139-40 (9th Cir. 1974); Mowery v. Standard Oil Co. of Ohio, 463 F.Supp. 762 (N.D.Ohio), affirmed, 590 F.2d 335 (6th Cir. 1976). The standard to be applied in determining the appropriateness of a directed verdict in an antitrust case is —

"... whether or not, viewing the evidence as a whole, there is substantial evidence present that could support a finding, by reasonable jurors, for the nonmoving party. `Substantial evidence is more than a mere scintilla.' The evidence must be examined in the light most favorable to the nonmovant, and there can be no weighing of evidence. Finally plaintiff is entitled to the benefit of all reasonable inferences that may be drawn from its evidence."

Chrisholm, 498 F.2d at 1140; Mowery, 463 F.Supp. at 765.

Applying this standard to the present case, the Court finds both defendants are entitled to directed verdicts on all counts of the complaint.

II.

Count I of plaintiff's complaint, arising under § 2 of the Sherman Act, alleges that:

"Defendants Hilltop and Marquette have attempted and conspired to monopolize the manufacture and delivery of readymix concrete in the Greater Cincinnati Metropolitan Area. In furtherance of said attempts and said conspiracy, defendant Hilltop has engaged in predatory pricing of ready-mix concrete, and has forced plaintiff Richter and other competing contractors either to lose contracts to defendant Hilltop or to take them at a loss, by submitting contract bids at unreasonably low figures. Defendant Marquette has enabled and encouraged said predatory actions of Hilltop by various means, including the making of an agreement dated December 17, 1964, pursuant to which Marquette agreed to cover one-half of any pre-income tax losses that might be suffered by Hilltop, and also agreed to assist Hilltop's acquisitions of new equipment and expansion of operations, by guaranteeing certain loans made to Hilltop by the First National Bank of Chicago and the Northwestern Mutual Life Insurance Company up to the total amount of $3,000,000.00.

"Such acts were done by the defendants for the purpose of forcing plaintiff Richter and other competitors out of the business of manufacturing, selling and delivering ready-mix concrete in the Greater Cincinnati Metropolitan Area, and enabling defendants to enjoy the profits of a monopoly position in such business."

Count I embraces two distinct claims. The first is a claim that Hilltop attempted to monopolize the production and distribution of ready-mix concrete in the Greater Cincinnati market area. The second claim is that Marquette and Hilltop conspired together for Hilltop to achieve that end. We think Count I must be so separated because plaintiff cannot logically assert that Marquette attempted to monopolize a business in which it did not even engage — the production and sale of ready-mix concrete. But the fact that Marquette was not itself engaged in the production and sale of ready-mix concrete does not perforce exclude any claim that it conspired with another company that was so engaged — in this case, Hilltop — to monopolize this particular market. See Cape Cod Food Products v. National Cranberry Association, 119 F.Supp. 900, 909 (D.Mass.1954). We therefore view Count I as presenting allegations of attempted monopolization against Hilltop alone, and of conspiracy to monopolize against both Hilltop and Marquette.

As proof of these and plaintiff's other claims discussed below, plaintiff introduced evidence which, when viewed in the light most favorable to it, tended to establish the events and circumstances discussed hereafter.

During the years 1961 through 1963, the Richter Concrete Corp. was the largest producer of ready-mix concrete in the Cincinnati area, with a percentage market share of approximately 31%. The Hilltop Concrete Co. was a company comprised of several divisions. Hilltop's Greater Cincinnati ready-mix concrete division was the second largest producer in the area, with a percentage market share of approximately 31%.^** The Marquette Cement Co. was a large corporation headquartered in Chicago which supplied cement to various ready-mix concrete producers in the Cincinnati area, including both Richter and Hilltop.

On January 28, 1964, the company referred to as Old Richter was organized and chartered as a wholly owned subsidiary of the Stewart Sand & Material Co., itself a wholly-owned subsidiary of the Mississippi River Fuel Corporation. The Mississippi River Fuel Corp. was a large, conglomerate, New York Stock Exchange-listed corporation which had recently entered the cement production industry in competition with Marquette. On January 31, 1964, Old Richter acquired all of the assets of the Richter Concrete Corporation and certain assets of the Richter Transfer Co., including all its mixer trucks used in the ready-mix concrete business.

The competitive situation, then, in late January, 1964, was this: Hilltop was a relatively small, closely held corporation facing as its principal competitor, Richter, a company having the backing and financial resources of a large national corporation. Marquette, which up until Richter's acquisition by the Mississippi River Fuel Corp. had supplied cement to both Richter and Hilltop, stood to lose Richter as a cement customer-the largest ready-mix concrete producer in the Cincinnati area. On the other hand, Richter appeared to have greatly expanded its capacity for dominance in the Cincinnati market area, and the River Fuel Corp. had in Richter a major "captive customer" for its cement.

Following the River Fuel Corporation's acquisition of Richter, Hilltop and Marquette entered into negotiations designed to strengthen their respective market positions in the Cincinnati area. Hilltop devised a five year growth program of capital improvement and market expansion, and was in need of financing to implement it. Specifically, Hilltop sought to acquire new sources of aggregates, an existing concrete plant in Covington, Kentucky, a new plant site in Cincinnati, fifteen new mixer trucks in each of the five years of the program, construction of a new concrete plant in Dayton, Ohio, and maintenance of equipment operating efficiency through a systematic program of replacement. Hilltop estimated that it would need, in addition to internally generated capital, some $3,000,000 in long term loans. Hilltop projected that if the five-year program was implemented it could attain, through market expansion and internal expansion, the following percentage market shares:

                1964               30%           (actual)
                1965               40%          (projected)
                1966               42%                "
                1967               43%                "
                1968               43%                "
                1969               44%                "
                1970               44%                "
                1971               45%                "
                1972               45%                "
                1973               45%                "
                1974               45%                "
                

Marquette, in turn, was eager to ensure the survival of Hilltop as a steady customer in Cincinnati for its cement. The parties intended that Marquette assist Hilltop in obtaining financing, and that Hilltop purchase a certain percentage of its cement requirements from Marquette.

The fruit of these negotiations was the crucial agreement between Hilltop and Marquette dated December 17, 1964. The agreement provided:

WHEREAS, Hilltop is engaged in the business of producing and selling aggregates and ready mix concrete in the marketing area of Southwestern Ohio and Northern Kentucky, comprising an important market for cement sold by Marquette; and

WHEREAS, Hilltop has prepared, and plans to proceed in accordance with, a Five Year Growth Program, a copy of which is attached hereto, made a part hereof and marked Exhibit A; and

WHEREAS, Hilltop, in order to proceed with its Five Year Growth Program, needs assistance in obtaining certain of the necessary funds to finance the said program; and

WHEREAS, River Cement Company, a competitor of Marquette, is in the process of constructing a new cement plant from which it proposes to ship cement into the said marketing area and has acquired, directly or indirectly, control of

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