In re Florida Cement and Concrete Litigation [Indirect Purchaser Action]

Filing 256

ORDER denying #197 Motion for Class Certification. Signed by Judge Cecilia M. Altonaga on 1/3/2012. (ps1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

In re FLORIDA CEMENT AND
CONCRETE ANTITRUST LITIGATION

MASTER DOCKET NO. 09-23493-CIVALTONAGA/Bandstra

(INDIRECT PURCHASER ACTION)
______________________________________/

ORDER
THIS CAUSE came before the Court on Indirect Purchaser Plaintiffs’ Motion for Class
Certification (“Motion”) [ECF No. 197], filed on September 21, 2011. Defendants, Cemex, Inc.
(“Cemex”), Florida Rock Industries, Inc. (“Florida Rock”), VCNA Prestige Ready-Mix Florida
(“Prestige”), Inc., and Tarmac America LLC (“Tarmac”) (collectively, “Defendants”), filed their
Joint Opposition to the Motion (“Response”) [ECF No. 228] on November 16, 2011, and Plaintiffs
filed their Reply [ECF No. 242-1] on December 13, 2011. The Court has carefully considered the
parties’ written submissions, oral arguments presented on December 19, 2011, and applicable law.
I. BACKGROUND
This case concerns an alleged price-fixing conspiracy in the Florida concrete industry. 1
Specifically, Plaintiffs claim Defendants were involved in an unlawful conspiracy among verticallyintegrated cement companies to fix, raise, stabilize, or maintain prices of, and allocate customers
and markets for, ready-mix concrete (“Concrete”)2 in the State of Florida. (See Fifth Amended
Consolidated Compl. (“Compl.”) ¶¶ 1–8, 60 [ECF No. 146]). Plaintiffs allege that as a result of this
A full background of this litigation can be found in the Court’s previous Orders. See, e.g., In re Fla.
Cement & Concrete Antitrust Litig., 746 F. Supp. 2d 1291, 1297–1305 (S.D. Fla. 2010).
1

2

Concrete is a mixture of cement, aggregate (sand, gravel, and crushed stone), and water. (See Compl.
¶ 61). The strength of Concrete is determined by the amount of water added, and is measured in pounds per
square inch (“psi”). (See id. ¶ 63).

Case No. 09-23493-CIV-ALTONAGA/Bandstra

conspiracy, Plaintiffs suffered economic loss as they were forced to pay artificially-inflated prices
for Concrete throughout the State of Florida. (See id. ¶ 5). In their Complaint, Plaintiffs bring
claims pursuant to Section 1 of the Sherman Act, 15 U.S.C. § 1, and under the Florida Deceptive
and Unfair Trade Practices Act (“FDUTPA”), Florida Statutes §§ 501.201, et seq.
Pursuant to Federal Rule of Civil Procedure 23, Plaintiffs seek to certify a class consisting
of:
All persons or entities who indirectly purchased Concrete from one or more of the
Defendants or their co-conspirators in the State of Florida for their own use and not
for re-sale at any time during the period from on or about February 11, 2008 to the
present (the “Class Period”). Excluded from the Class are [sic] anyone who
purchased structures, including completed homes, containing concrete, if those
purchases did not specifically break out the cost of Concrete. Also excluded are
Defendants and their subsidiaries, parents, or affiliates, and Defendants’ coconspirators, whether or not named as a Defendant in this Complaint.
(Mot. 9). At the December 19 hearing, Plaintiffs clarified that this class only includes persons or
entities who indirectly purchased Concrete using a “cost plus contract.” 3 (See Tr. of Dec. 19, 2011
Hr’g (“Hr’g Tr.”) 16:12–14 [ECF No. 255]). Defendants oppose certification of this class on
several grounds.
II. LEGAL STANDARD
“The class action is ‘an exception to the usual rule that litigation is conducted by and on
behalf of the individual named parties only.’” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541,
2550 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700–01 (1979)). “Questions concerning
class certification are left to the sound discretion of the district court.” Cooper v. Southern Co., 390
F.3d 695, 711 (11th Cir. 2004), overruled on other grounds, Ash v. Tyson Foods, Inc., 546 U.S. 454,
457 (2006) (citing Armstrong v. Martin Marietta Corp., 138 F.3d 1374, 1386 (11th Cir. 1998)).
With this “great power comes great responsibility; the awesome power of a district court must be
A cost plus contract is defined as one in which “the contractor is paid an amount equal to costs plus
specific overhead and profit.” (Reply 8 (internal quotation omitted)).
3

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‘exercised within the framework of [Federal Rule of Civil Procedure] 23.’” Klay v. Humana, Inc.,
382 F.3d 1241, 1251 (11th Cir. 2004) (quoting Castano v. Am. Tobacco Co., 84 F.3d 734, 740 (5th
Cir. 1996)). Thus, to be entitled to class certification, the party seeking certification must have
standing and must meet each of the requirements specified in Federal Rule of Civil Procedure 23(a),
as well as the requirements of at least one subsection of Federal Rule of Civil Procedure 23(b). See
Klay, 382 F.3d at 1250.
Rule 23(a) “ensures that the named plaintiffs are appropriate representatives of the class
whose claims they wish to litigate.” Wal-Mart, 131 S. Ct. at 2550. Under Rule 23(a), the party
seeking class certification has the burden of showing that the four requirements of numerosity,
commonality, typicality, and adequacy of representation are satisfied. Rule 23(a) provides as
follows:
One or more members of a class may sue on behalf of all only if (1) the class is so
numerous that joinder of all members is impracticable, (2) there are questions of law
or fact common to the class, (3) the claims and defenses of the representative parties
are typical of the claims or defenses of the class, and (4) the representative parties
will fairly and adequately protect the interests of the class.
FED. R. CIV. P. 23(a).
The class must also satisfy one of the three additional requirements of Rule 23(b). Plaintiffs
assert a class is appropriate under Rules 23(b)(2) and 23(b)(3).

Rule 23(b)(2) provides that

certification is appropriate where: “the party opposing the class has acted or refused to act on
grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory
relief is appropriate respecting the class as a whole.” FED. R. CIV. P. 23(b)(2). Alternatively, Rule
23(b)(3) provides that certification is available if the Court finds “that the questions of law or fact
common to class members predominate over any questions affecting only individual members, and
that a class action is superior to other available methods for fairly and efficiently adjudicating the

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controversy.” FED. R. CIV. P. 23(b)(3).
In examining whether the party seeking certification has satisfied the requirements of Rule
23, the Eleventh Circuit has counseled that “[a]lthough the trial court should not determine the
merits of the plaintiffs’ claim at the class certification stage, the trial court can and should consider
the merits of the case to the degree necessary to determine whether the requirements of Rule 23 will
be satisfied.” Valley Drug Co. v. Geneva Pharms., Inc., 350 F.3d 1181, 1188 n.15 (11th Cir. 2003).
Indeed, the Supreme Court recently acknowledged that “‘sometimes it may be necessary for the
court to probe behind the pleadings before coming to rest on the certification question,’ and that
certification is proper only if ‘the trial court is satisfied, after a rigorous analysis, that the
prerequisites of Rule 23(a) have been satisfied.’” Wal-Mart, 131 S. Ct. at 2551 (quoting Gen. Tel.
Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982)) (internal citations omitted). “Frequently that
‘rigorous analysis’ will entail some overlap with the merits of the plaintiff’s underlying claim. That
cannot be helped.” Id.
III. ANALYSIS
A. Rule 23(a)
As stated, Plaintiffs must first satisfy the four requirements of Rule 23(a): (1) Numerosity;
(2) Commonality; (3) Typicality; and (4) Adequacy. The Court examines each requirement in turn.
1. Numerosity
With regard to the numerosity requirement, Plaintiffs must establish the class is so numerous
that joinder of all members is impracticable. See FED. R. CIV. P. 23(a)(1). As a general rule, a
group of more than 40 satisfies the numerosity requirement of Rule 23, a group of fewer than 21
does not, and the numbers in between are subject to judgment based on additional factors. See Vega
v. T-Mobile USA, Inc., 564 F.3d 1256, 1267 (11th Cir. 2009). “To meet this requirement, plaintiffs

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need not prove the exact size of the proposed class, but rather need demonstrate only that the
number is exceedingly large, and joinder impracticable.” In re Infant Formula Antitrust Litig., No.
MDL 878, 1992 WL 503465, at *3 (N.D. Fla. Jan. 13, 1992) (citing Anderson v. Bank of the South,
N.A., 118 F.R.D. 136, 145 (M.D. Fla. 1987)). Essentially, a plaintiff seeking to certify a class must
make a showing with factual support that the numerosity will be satisfied. Vega, 564 F.3d at 1267.
In this action, the proposed class is to include thousands of Concrete purchasers throughout
the State of Florida who purchased Concrete indirectly from Defendants.

(See Mot. 11–12).

Plaintiffs maintain that because the class numbers in the thousands and because the members of the
class are geographically dispersed, joinder is impracticable. (See id.). Defendants do not contest
this assertion. Based on the foregoing, the Court finds Plaintiffs’ proposed class satisfies the
requirement of numerosity.
2. Commonality
The second requirement for maintaining a class action under Rule 23 is that “there are
questions of law or fact common to the class.” FED. R. CIV. P. 23(a)(2). Rule 23(a)(2) “‘does not
require that all the questions of law and fact raised by the dispute be common’ . . . or that the
common questions of law or fact ‘predominate’ over individual issues.” Vega, 564 F.3d at 1268
(quoting Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1557 (11th Cir. 1986)). Rather, “[t]he
commonality requirement demands only that there be ‘questions of law or fact common to the
class.’”

Id. (quoting FED. R. CIV. P. 23(a)(2)).

As the Supreme Court recently explained,

“[c]ommonality requires the plaintiff to demonstrate that the class members have suffered the same
injury.” Wal-Mart, 131 S. Ct. at 2551 (internal quotations and citation omitted). In other words,
their claims “must depend upon a common contention” that is “capable of classwide resolution —
which means that determination of its truth or falsity will resolve an issue that is central to the

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validity of each one of the claims in one stroke.” Id. at 2545.
Plaintiffs allege a price-fixing conspiracy: that beginning on February 11, 2008, Defendants,
who together control more than 75% of Florida’s Concrete industry, engaged in a conspiracy to fix,
stabilize, and maintain prices of Concrete sold in Florida. In cases containing allegations of pricefixing, courts have consistently held that the nature of the antitrust conspiracy action compels a
finding that common questions of fact and law exist. See, e.g., In re Infant Formula, 1992 WL
503465, at *4 (“By the very nature of a conspiracy antitrust action, common questions of fact and
law exist.”); In re Carbon Dioxide Antitrust Litig., 149 F.R.D. 229, 232 (M.D. Fla. 1993) (same); In
re Dynamic Random Access Memory (DRAM) Antitrust Litig., No. M 02-1486-PJH, 2006 WL
1530166, at *3 (N.D. Cal. June 5, 2006) (“[T]he very nature of a conspiracy antitrust action
compels a finding that common questions of law and fact exist.”) (citations omitted).
Likewise, here, the Court finds common questions of law and fact are implicated. Many of
the issues in the instant action involve the Defendants’ alleged conspiracy and the manner in which
it may have affected the class as a whole. For example, questions such as whether the Defendants
conspired to fix the prices for Concrete, the identity of each member in the conspiracy, and the time
period during which the conspiracy existed — which could involve review of numerous documents
going back years and testimony of Defendants’ principals — would be better handled in one trial
rather than in many trials. As the court reasoned in In re Commercial Tissue Products, “[i]f each
class member proceeded individually, each would have to prove the existence and impact of the
identical conspiracy to fix prices.

Obviously, individual actions designed to prove identical

elements would completely destroy any notions of judicial economy.” 183 F.R.D. 589, 593 (N.D.
Fla. 1998) (internal quotation marks and citation omitted).
The Eleventh Circuit has explained that the commonality requirement is a “relatively light

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burden.” Vega, 564 F.3d at 1268. Given that common questions of fact and law exist among class
members, the burden is met in this case, and the commonality prong of the Rule 23(a) analysis is
satisfied.

Whether these common issues predominate will be discussed with regard to Rule

23(b)(3).
3. Typicality
The typicality prong requires that “the claims or defenses of the representative parties are
typical of the claims or defenses of the class.” FED. R. CIV. P. 23(a)(3). “A class representative
must possess the same interest and suffer the same injury as the class members in order to be typical
under Rule 23(a)(3).” Cooper v. Southern Co., 390 F.3d 695, 713 (11th Cir. 2004) (quoting Murray
v. Auslander, 244 F.3d 807, 811 (11th Cir. 2001)). “‘[T]ypicality measures whether a sufficient
nexus exists between the claims of the named representatives and those of the class at large.’”
Cooper, 390 F.3d at 713 (quoting Prado-Stetman ex rel. Prado v. Bush, 221 F.3d 1266, 1279 (11th
Cir. 2000)). Plaintiffs maintain this requirement is satisfied because the named Plaintiffs’ claims
derive from the same alleged price-fixing conspiracy and are based on the same legal theories as
those of absent class members. (See Mot. 14–16). In contrast, Defendants contend neither of the
two remaining named Plaintiffs — Jane Kerrigan and Gables of Vero Beach (“GVB”) –– is
representative or typical of the putative class members. (Resp. 46–49).
With regard to Plaintiff Jane Kerrigan, Defendants assert she is not representative of the
class for three reasons. First, Kerrigan purchased Concrete from Couch Ready Mix, an entity not
named as a Defendant, and of which Cemex is only a passive minority owner. (See id. 46–47; Hr’g
Tr. 35:17–36:9). Thus, she has not been harmed by any of Defendants and lacks standing.
Resp. 47).

(See

Second, Kerrigan purchased Concrete in the Northwest area of Florida, or the

Panhandle, an area in which, as transaction data shows — and even the Direct Purchaser Plaintiffs

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concede –– Defendants did not operate. (See Mot. Ex. 1, Expert Report of Dr. Janus Ordover
“Ordover Report” 5 n.9). Defendants maintain that because Kerrigan purchased in an area that is
not part of the conspiracy, she lacks standing. (See Resp. 47). Third, there is no evidence that
Kerrigan utilized a cost plus contract, as required by the class definition. (See id.). After careful
review of the record and the parties’ written and oral arguments, the Court agrees with Defendants’
observations regarding Plaintiff Kerrigan, and finds she does not satisfy the typicality prong of the
analysis.4
With regard to the other remaining named Plaintiff, GVB, Defendants contend it also fails to
satisfy the typicality requirement.

In particular, Defendants note GVB purchased Concrete

indirectly “in or around May 2008” for repairs on its property. (Compl. ¶¶ 16–17). Although the
purchase falls within the defined class period, Plaintiffs’ own expert Dr. Hal Singer’s analysis has
concluded there was no impact from the alleged conspiracy prior to October 2008. (See Resp. 48
(citing Dep. of Hal J. Singer, Nov. 3, 2011 [ECF No. 245-2] (“Singer Dep.”) 222:19–223:2)).
Therefore, Defendants suggest GVB is not an appropriate Plaintiff. (See id.; Hr’g Tr. 36:15–37:12).
The Court agrees with Defendants. Because GVB’s Concrete purchase predates the date on
which even Plaintiffs’ own expert claims there was any impact from the conspiracy, GVB cannot be
considered to have claims typical to those of absent class members, nor could it adequately
represent the class. Both Plaintiffs’ Motion and the Complaint focus on an alleged $25 price
increase that was put in place “between August 4, 2008 and September 12, 2008.” (Mot. 6; see
Compl. ¶ 92). The Court cannot discern how GVB, whose Concrete purchase occurred several
months prior to that period, could have been affected by the alleged increase. Accordingly, GVB
fails to satisfy the typicality prong of the Rule 23(a) inquiry.
4

At the December 19 hearing, Plaintiffs seemed to concede this point, focusing their argument on the other
named Plaintiff, Gables of Vero Beach. (See, e.g., Hr’g Tr. 72:1–8).

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4. Adequacy
The final requirement of Rule 23(a) is that “the representative parties will fairly and
adequately protect the interests of the class.” FED. R. CIV. P. 23(a)(4). The Eleventh Circuit has
described the adequacy prong of a class certification analysis as follows:
Rule 23(a)(4) requires that the representative party in a class action “must
adequately protect the interests of those he purports to represent.” Philips v.
Klassen, 502 F.2d 362, 365 (D.C. Cir. 1974). This “adequacy of representation”
analysis “encompasses two separate inquiries: (1) whether any substantial conflicts
of interest exist between the representatives and the class; and (2) whether the
representatives will adequately prosecute the action.” In re HealthSouth Corp.
Securities Litigation, 213 F.R.D. 447, 460–61 (N.D. Ala. 2003). If substantial
conflicts of interest are determined to exist among a class, class certification is
inappropriate.
Valley Drug Co., 350 F.3d at 1189. An adequate class representative must be one willing to
vigorously litigate the action on behalf of the class. Clausnitzer v. Fed. Express Corp., 248 F.R.D.
647, 657 (S.D. Fla. 2008). In the present action, because neither Kerrigan nor GVB satisfies the
typicality prong of the Rule 23(a) analysis, it necessarily follows they cannot adequately prosecute
the action. Thus, for the reasons articulated above, Plaintiffs fail to satisfy this prong as well.
In sum, Plaintiffs fail to satisfy the typicality and adequacy prongs of the Rule 23(a)
analysis; on this basis alone the Motion must be denied. Nonetheless, the Court will conduct a brief
analysis of the remaining portions of the Rule 23 inquiry.
B. Rule 23(b)
In addition to establishing the elements of Rule 23(a), Plaintiffs must also show they satisfy
at least one of the conditions of Rule 23(b). See Klay, 382 F.3d at 1250. As stated, Plaintiffs assert
a class is appropriate under both Rule 23(b)(2) and Rule 23(b)(3).
i. Rule 23(b)(2)
Rule 23(b)(2) provides that certification is appropriate where “the party opposing the class

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has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief
is appropriate respecting the class as a whole. . . . ” FED. R. CIV. P. 23(b)(2). Where “a plaintiff
seeks damages in addition to equitable relief, injunctive class certification is only appropriate if the
money damages are incidental to the requested injunctive or declaratory relief.” DWFII Corp. v.
State Farm Mut. Auto. Ins. Co., 271 F.R.D. 676, 686 (S.D. Fla. 2010) (internal quotations and
citations omitted); see also Vega, 564 F.3d at 1265 n.8; Holmes v. Continental Can Co., 706 F.2d
1144, 1155 (11th Cir. 1983) (noting hybrid or Rule 23(b)(2) class action is not appropriate where
the “appropriate relief relates exclusively or predominantly to monetary damages”) (internal
quotation and citation omitted); Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir.
1998); Coastal Neurology, Inc. v. State Farm Mut. Auto. Ins. Co., 271 F.R.D. 538, 546 (S.D. Fla.
2010). This is because Rule 23(b)(2) “‘does not extend to cases in which the appropriate final relief
relates exclusively or predominantly to money damages.’” Agan v. Katzman & Korr, P.A., 222
F.R.D. 692, 701 (S.D. Fla. 2004) (quoting Swanson v. Mid Am, Inc., 186 F.R.D. 665, 669 (M.D. Fla.
1999)).
Money damages are “incidental” only when class members would be “automatically
entitled” to them once class-wide litigation is established. Coastal Neurology, 271 F.R.D. at 546;
see Allison, 151 F.3d at 415; Swanson, 186 F.R.D. at 669 (“Incidental means that the monetary
damages flow directly from liability to the class as a whole on the claims forming the basis of the
injunctive or the declaratory relief.”) (internal quotation omitted).

In the present action, in which

the Plaintiffs seek both monetary and injunctive relief, they fail to demonstrate that the money
damages are merely “incidental” to the injunctive relief. A finding of class-wide liability in this
case would not “automatically” entitle class members to a fixed, uniform damages recovery. See
Allison, 151 F.3d at 415.

Instead, the calculation of money damages would require an

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individualized determination regarding the amount by which each class member was injured as a
result of the alleged conspiracy. Moreover, as Plaintiffs acknowledge, even the direct purchaser
Plaintiffs concede the alleged conspiratorial conduct has ceased. (See Hr’g Tr. 72:14–16). For
these reasons, the Court does not find injunctive relief is the primary relief sought in this case.
ii. Rule 23(b)(3)
Rule 23(b)(3) requires finding both (1) “that the questions of law or fact common to class
members predominate over any questions affecting only individual members,” and (2) “that a class
action is superior to other available methods for fairly and efficiently adjudicating the controversy.”
FED. R. CIV. P. 23(b)(3); see also Vega, 564 F.3d at 1277. These requirements are known as
predominance and superiority. See Behrend v. Comcast Corp., 655 F.3d 182, 190 (3d Cir. 2011).
Predominance “is perhaps the central and overriding prerequisite for a Rule 23(b)(3) class.”
Id. at 1278. “Common issues of fact and law predominate if they ‘ha[ve] a direct impact on every
class member’s effort to establish liability and on every class member’s entitlement to injunctive
and monetary relief.” Klay, 382 F.3d at 1255 (quoting Ingram v. Coca-Cola Co., 200 F.R.D. 685,
699 (N.D. Ga. 2001)) (alteration in original). “Where, after adjudication of the classwide issues,
plaintiffs must still introduce a great deal of individualized proof or argue a number of
individualized legal points to establish most or all of the elements of their individual claims, such
claims are not suitable for class certification under Rule 23(b)(3).” Id. Here, Defendants oppose
certification, asserting Plaintiffs cannot prove common impact on the class members and that the
calculation of damages for each class member would require an individualized factual
determination.
1. Common Impact
“The fact of injury or ‘impact’ is an essential element of the antitrust claims that requires

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proof that . . . Plaintiffs suffered some injury that was caused by Defendants’ antitrust violations.”
In re Terazosin Hydrochloride, 220 F.R.D. 672, 696 (S.D. Fla. 2004). “In an overcharge case,
impact is shown through proof that: (1) Defendants charge more than they would have but-for their
antitrust violation; and (2) class members made some purchases at the illegally inflated or stabilized
price.” Id. “[T]he question at [the] class certification stage is whether, if such impact is plausible in
theory, it is also susceptible to proof at trial through available evidence common to the class.” In re
Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 325 (3d Cir. 2008).
Plaintiffs acknowledge that, being indirect purchasers, they have a “double burden” at trial;
they must first prove common impact on direct purchasers who bought Concrete from the
Defendants, and then show that impact was passed through to the indirect purchaser class. (Hr’g Tr.
6:17–22; see also Mot. 7); Ill. Brick Co. v. Illinois, 431 U.S. 720, 732–33 (1977) (noting that in
indirect purchaser actions “[t]he demonstration of how much of the overcharge was passed on by
the first purchaser must be repeated at each point at which the price-fixed goods changed hands
before they reached the plaintiff.”). Plaintiffs maintain they will prove impact on a class-wide basis
at trial by “(a) showing that the direct purchasers (general contractors, wholesalers, and other
concrete intermediaries) who bought Concrete from the Defendants paid higher prices on average
than prices that would have prevailed absent the alleged conspiracy; and (b) demonstrating that the
direct purchasers passed this increase in their costs on, in whole or in part, to the Indirect Purchaser
Class in the form of higher prices.” (Mot. 7). After careful review, however, the Court finds
Plaintiffs fail to satisfy either level of their burden.
i. Impact on Direct Purchasers
First, with regard to the impact on the direct purchasers, Plaintiffs do not establish that
impact is susceptible to proof through common evidence. Plaintiffs assert they will prove common

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impact through evidence such as “qualitative economic opinions, the structure of the Concrete
market, the fungibility of the product, Defendants[’] collusive communications with one another,
Defendants[’] pricing behavior and other facts.” (Mot. 26). In support of their assertion, they
proffer the opinion of Dr. Hal J. Singer (“Dr. Singer”). (See Class Certification Report of Hal J.
Singer, Ph.D. (“Singer Report”) [ECF No. 199-1]).

Plaintiffs maintain Dr. Singer’s Report

demonstrates (1) “that the characteristics of the industry and pricing data indicate that Defendants’
conspiracy would be effective in raising the prices of Concrete in Florida” and (2) that “[a]ny price
increase that Defendants agreed upon affected the prices paid by all direct purchasers.” (Mot. 27).
Contrary to Plaintiffs’ contention, Dr. Singer’s initial Report states that he “cannot give a final
conclusion on whether impact can be shown with common methods and evidence.” (Singer Report.
¶ 2).5
Furthermore, to the extent Plaintiffs’ position is based on the existence of list prices used by
Defendants, Plaintiffs fail to demonstrate that those list prices represent common evidence of
impact. Plaintiffs’ argument with respect to the list prices is based on regression and correlation
analyses contained within Dr. Singer’s Supplemental Report, which are then relied on in Dr.
Singer’s Reply Report [ECF No. 242-8]. (See Reply 6). These analyses are not contained in his
initial Report, nor do Plaintiffs rely on them in their Motion. Plaintiffs now seek to introduce Dr.
Singer’s new analyses and opinions without affording Defendants an adequate opportunity to
respond. Plaintiffs attempt to introduce the regression and correlation analyses by couching them as
5

Although Dr. Singer filed an untimely Supplemental Report [ECF No. 216], in which he purportedly
conducts some regression analysis on this issue, the Court previously ordered that Dr. Singer’s opinions be
limited to those offered in his “preliminary” report. (See Nov. 17, 2011 Order [ECF No. 226]). Specifically,
the Court ruled that “[i]f a proposed corrected or completed report or opinion prejudices Defendants,
Plaintiffs may not supplement or correct the Report or opinion.” (Id. 20). Notwithstanding the Court’s
Order, Plaintiffs’ Reply repeatedly cites to the new analyses contained in the Supplemental Report.
Consistent with the Court’s previous Order, the Court will disregard any new opinions or analyses contained
in the Supplemental Report that prejudice Defendants in any way.

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evidence responding to Dr. Ordover’s Report. Nonetheless, these new regressions and correlation
analyses clearly “exceed what can reasonably be called ‘rebuttal evidence.’”6 Home Design Servs.,
Inc. v. Hibiscus Homes of Fla., Inc., No. 603CV1860ORL19KRS, 2005 WL 2465020, at *5 (M.D.
Fla. Oct. 6, 2005); see also In re Graphics Processing Units Antitrust Litig., 253 F.R.D. 478, 501
(N.D. Cal. 2008) (striking five regressions contained in expert’s reply declaration, which were not
included in the expert’s initial report, as procedurally improper). As the court in In re Graphics
commented, including this type of analysis for the first time in a reply declaration is “a clear-cut
form of sandbagging and [i]s simply unfair.” In re Graphics, 253 F.R.D. at 501.
The new analyses should have been presented in Dr. Singer’s initial Report. Dr. Singer
laments that he could not conduct these sorts of analyses at the time of his initial Report because he
was not afforded an opportunity to question Defendants regarding their data. (See Singer Report ¶ 2
n.3). However, as the Court found in the November 17 Order, Dr. Singer’s inability to obtain the
relevant information and conduct those analyses was entirely the result of Plaintiffs’ own conduct.
(See generally Nov. 17 Order). In the Order, the Court placed the burden on Plaintiffs to persuade
the Court that any supplement to Dr. Singer’s Report would not prejudice Defendants. Plaintiffs
have failed to carry that burden. It was “Plaintiffs’ own delays and inefficiencies” that resulted in
Dr. Singer’s inability to provide a timely, complete opinion regarding common impact (id. 16), and
the Court is unwilling to allow Plaintiffs to benefit from their conduct to the prejudice of
Defendants. Because these new opinions go beyond the scope of rebuttal evidence and clearly
prejudice Defendants, 7 the Court will not rely on these supplemental analyses. Thus, Plaintiffs’

In contrast, the portions of Dr. Singer’s Report that address the purported flaws in Dr. Ordover’s analysis
are accurately described as rebuttal evidence and have been considered by the Court.
6

Plaintiffs contend Defendants have suffered no prejudice by the filing of Dr. Singer’s Supplemental
Report because Dr. Ordover “had over six weeks after receiving the supplemental report to respond to Dr.
Singer.” (Reply 7). This same argument was presented by Plaintiffs in their response to Defendants’ Motion
7

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only evidence of common impact on direct purchasers is Dr. Singer’s preliminary opinion, which is
inconclusive on this issue.
After careful review of the evidence that is properly presented by Plaintiffs, the Court does
not find they have shown the impact on direct purchasers is susceptible to proof by common
evidence.8
ii. Impact on Proposed Class Members
Second, even if Plaintiffs had established that impact on direct purchasers could be shown
through common evidence, they fail to establish that an overcharge was passed down to all indirect
purchasers included in the class. Plaintiffs contend Dr. Singer’s Report establishes that the “price
increase to direct purchasers were [sic] passed through into higher prices on the indirect purchasers
who are members of the class.” (Mot. 27 (citing Singer Report ¶¶ 64–82)). But Dr. Singer offers
to Preclude Supplementation, and was rejected by the Court in the November 17 Order. (See Nov. 17 Order
9–11, 17–19). In that Order, the Court found the late filing of the supplemental report “extremely prejudicial
in this case because of the nature of the suit and the unique scheduling restrictions,” noting that “[e]ach day
that has gone by without a full and complete opinion and report is a day that Defendants have not been able
to fully and accurately prepare their response.” (Id. 17). As the Court explained, Plaintiffs consistently
delayed in obtaining the relevant information and providing it to Dr. Singer; in fact, their dilatory behavior
began with their late retention of Dr. Singer — four months after they received Defendants’ data and two
months before the report and class-certification motion were due. (See id. 14).
Defendants also argue Plaintiffs’ assertion –– that common evidence can be used to show impact on direct
purchasers — is flawed because
8

(1) the concrete industry in Florida includes thousands of unique product mixes that
suppliers market and sell to different segments of the construction industry within distinct
local geographic markets, and prices differ widely across these variables; and (2) even
within each mix category, segment, or geographic region, customers differentiate between
suppliers and negotiate the price of ready-mix concrete on the basis of a number of factors,
including quality, service, timing, location, and their relationships with each supplier.
(Resp. 22). Defendants claim there are a number of factors present that influence the determination of
Concrete prices, and thus an individualized inquiry of impact is necessary. This argument is more fully
discusser in Defendants’ Joint Opposition to Direct Purchaser Plaintiffs’ Motion for Class Certification
[ECF No. 346]. It is unnecessary to conduct an in-depth analysis related to this argument, however, as
Plaintiffs’ position is flawed for the numerous other reasons addressed here. Notably, this argument was
considered by the Court in its Order denying plaintiffs’ motion for class certification in the Direct Purchaser
Action, and was found to be persuasive. See Case No. 09-23187, ECF No. 373.

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no methodology for determining whether pass-through actually occurred; instead, he simply
assumes that for indirect purchasers who bought pursuant to a cost plus contract, “the pass through
rate would typically be one hundred percent.” (Singer Dep. 169:13–24). He bases his assumption
on the fact that if all terms of a cost plus contract are carried out, then pass through should occur.
(See id. 170:23–171:15). However, as Dr. Singer acknowledges, parties to such contracts do not
always fully implement their terms, so even among those Plaintiffs who had a cost plus contract
there is no guarantee the increased Concrete costs were actually passed through to them by the
direct purchasers. (See id. 171:16–172:2). In other words, that a contract originally contemplated
pass through does not mean the contract was in fact enforced or that it was not modified orally at a
later date. Dr. Singer’s assumption of a 100% pass-through rate simply disregards these very real
possibilities. As a result, the entire basis for Dr. Singer’s opinion is grounded on a faulty premise.
See In re Fresh Del Monte Pineapples Antitrust Litig., No. 1:04-md-1628, 2008 WL 5661873, at *6
(S.D.N.Y. Feb. 20, 2008) (rejecting expert’s damages analysis where the expert did not perform any
detailed empirical analysis of pass through, but instead based his conclusion on limited data and an
assumed uniform pass through rate).
Furthermore, the record evidence actually indicates that direct purchasers did not
consistently pass on increases in Concrete prices to indirect purchasers. In fact, several general
contractors and Concrete subcontractors have testified and submitted sworn declarations stating
they were unable to pass on any increased Concrete costs to the end users. (See Resp. 2 (citing Mot.
Exs. 6–10); see also Singer Dep. 190:3–191:9, 193:4–21). They note that even when cost plus
contracts were used, they generally could not pass on any Concrete cost increases during the time of
the alleged conspiracy because of the poor state of the construction market. (See Mot. Ex. 10, Decl.
of Lloyd Hollingsworth (“Hollingsworth Decl.”) ¶¶ 11–12; Mot. Ex. 26, Decl. of Murray Rice

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(“Rice Decl.”) ¶¶ 4–5). This testimony tends to show that any alleged overcharge was often
absorbed by the direct purchasers before reaching the class members. Dr. Singer offers no opinion
to rebut this evidence. Consequently, the Court would need to conduct an individualized inquiry to
determine whether the alleged overcharge was in fact passed on to each putative class member.
In addition, as Defendants note and Dr. Singer acknowledges, many cost-plus contracts
contain a guaranteed maximum clause, which, if triggered, could result in the Concrete cost not
being passed through to indirect purchasers. (See Hr’g Tr. 46:4–22; Singer Dep. 182:2–24). Dr.
Singer himself points out that the only way to know if a guaranteed maximum provision was
triggered, thus preventing pass-through, is to look at every individual contract. (See Singer Dep.
182:17–24) (“Q: How would you know if a guarantee maximum was triggered so that pass-through
was limited? A: I think the only way that you know is if the price after the concrete cost increase
exceeded the maximum. Q: How would you figure that out? A: You have to look at the contract.
Q: For every contract?

A: If that’s what your objective was, yes, you’d have to do that.”).

Consequently, this too would require an individualized inquiry.
Lastly, Plaintiffs seem to assert that even if Dr. Singer’s analysis is deficient, the Motion
should be granted because “an illegal price-fixing scheme presumptively impacts all purchasers of a
price-fixed product in a conspiratorially affected market.” (Mot. 26). Numerous courts have held
that “because the gravamen of a price-fixing claim is that the price in a given market is artificially
high, there is a presumption that an illegal price-fixing scheme impacts upon all purchasers of a
price-fixed product in a conspiratorially affected market.” In re Potash Antitrust Litig., 159 F.R.D.
682, 695 (D. Minn. 1995) (citing In re Alcoholic Beverages Litig., 95 F.R.D. 321, 327 (E.D.N.Y.
1982)); In re Catfish Antitrust Litig., 826 F. Supp. 1019, 1041 (N.D. Miss. 1993) (“[I]n an illegal
price fixing scheme, there is a presumption that all purchasers will be impacted/injured by having to

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pay the higher price.”); Behrend, 655 F.3d at 191; In re Potash, 159 F.R.D. at 693; In re NASDAQ
Market-Makers Antitrust Litig., 169 F.R.D. 493, 518 (S.D.N.Y. 1996). Despite this presumption,
however, Plaintiffs cannot demonstrate common impact by merely alleging a price-fixing
conspiracy. See In re Hydrogen Peroxide, 552 F.3d at 321; Robinson v. Tex. Auto. Dealers Ass’n,
387 F.3d 416, 420–21 (5th Cir. 2004) (“There are no hard and fast rules . . . regarding the suitability
of a particular type of antitrust case for class action treatment.”) (internal citation and quotation
marks omitted); In re Commercial Tissue, 183 F.R.D. at 595 (“[A] mere charge of conspiracy does
not mean that common questions predominate.”). Here, Defendants point to a myriad of record
evidence — which Plaintiffs fail to rebut — that overcomes any initial presumption of common
impact.
In sum, Plaintiffs fail to offer any basis to prove through common evidence that either direct
purchasers or indirect purchasers were actually impacted by the conspiracy. Accordingly, the
Motion must be denied.
2. Damages
Even assuming impact could be proven through common evidence, Plaintiffs fail to offer a
viable methodology to calculate damages. “‘[I]n assessing whether to certify a class, the Court’s
inquiry is limited to whether or not the proposed methods [for computing damages] are so
insubstantial as to amount to no method at all . . . [Plaintiffs] need only come forward with plausible
statistical or economic methodologies to demonstrate impact on a class-wide basis.’” Klay, 382
F.3d at 1259 (quoting In re Terazosin Hydrochloride Antitrust Litig., 220 F.R.D. at 698).
“Particularly where damages can be computed according to some formula, statistical analysis, or
other easy or essentially mechanical methods, the fact that damages must be calculated on an
individual basis is no impediment to class certification.” Id. at 1259–60 (footnote call numbers

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omitted).
In order to calculate damages, Dr. Singer proposes a two-step analysis, which he opines will
provide a reasonable estimate of damages for each member of the class. (See Singer Report ¶¶ 84–
102).

First, he proposes to calculate damages to direct purchasers using one of three

methodologies: a regression model, benchmark model, or a NEIO model. (See id. ¶¶ 84–100). He
claims these models would provide the average actual price charged by Defendants to direct
purchasers and the average “but for” price the direct purchasers would have paid absent a
conspiracy. (See id.). Comparing those two average prices, he would obtain an average overcharge
for each sale, and this percentage would be multiplied against all of the sales from Defendants to
direct purchasers during the class period to provide an aggregate “pot” of damages. (Id. ¶¶ 101–02).
Second, Dr. Singer assumes that 100% of the Concrete costs will be passed through to indirect
purchasers, and therefore converts the “pot” of direct purchaser damages to a “pot” of damages for
the indirect purchaser class. (Id. ¶ 101).
Defendants contend this two-step methodology fails for several reasons, the most readily
apparent one being that it would assign damages to indirect purchasers who suffered no harm at all.
(See Resp. 35–37). Specifically, Defendants note that even if Dr. Singer could perform some
analysis to calculate damages to direct purchasers — which he has not yet done –– the second step
of his analysis would necessarily fail because it is based on the faulty premise that 100% of the
increased costs for Concrete would be passed through to indirect purchasers. (See id.). The Court
agrees. As discussed, Dr. Singer did not conduct any empirical analysis to test this premise or to
otherwise determine an appropriate pass-through rate. In fact, he acknowledges that not all costplus contracts will be carried out according to their terms.

(See Singer Dep. 171:16–172:2).

Because the determination as to whether cost increases were in fact passed on to a particular

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indirect purchaser involves an individualized inquiry, the Court cannot find Dr. Singer presents a
plausible methodology for calculating damages on a class-wide basis. Furthermore, Dr. Singer
acknowledges he does not present any formula for determining how to allocate damages among the
indirect purchaser plaintiffs. (See id. 242:3–15). Thus, even assuming he could arrive at an
accurate “pot” of damages to attribute to indirect purchasers, he does not even opine that a method
exists to properly apportion those damages to the class members. Based on the foregoing, Plaintiffs
fail to present a formula by which damages could be calculated on a class-wide basis.
IV. CONCLUSION
A district court is required to conduct a rigorous analysis of the Rule 23 prerequisites before
certifying a class. Having conducted that rigorous analysis, and for the foregoing reasons, it is
ORDERED AND ADJUDGED that the Motion [ECF No. 197] is DENIED.
DONE AND ORDERED in Chambers at Miami, Florida, this 3rd day of January, 2012.

_________________________________
CECILIA M. ALTONAGA
UNITED STATES DISTRICT JUDGE
cc: counsel of record

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