American Contractors Supply, LLC v. HD Supply Construction Supply, Ltd.

989 F.3d 1224
CourtCourt of Appeals for the Eleventh Circuit
DecidedMarch 4, 2021
Docket20-10813
StatusPublished
Cited by2 cases

This text of 989 F.3d 1224 (American Contractors Supply, LLC v. HD Supply Construction Supply, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Contractors Supply, LLC v. HD Supply Construction Supply, Ltd., 989 F.3d 1224 (11th Cir. 2021).

Opinion

USCA11 Case: 20-10813 Date Filed: 03/04/2021 Page: 1 of 35

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 20-10813 ________________________

D.C. Docket No. 1:16-cv-03595-MLB

AMERICAN CONTRACTORS SUPPLY, LLC, Plaintiff-Appellant,

versus

HD SUPPLY CONSTRUCTION SUPPLY, LTD.,

Defendant-Appellee.

__________________________

Appeal from the United States District Court for the Northern District of Georgia _________________________

(March 4, 2021)

Before ROSENBAUM, LAGOA, and ANDERSON, Circuit Judges.

ANDERSON, Circuit Judge: USCA11 Case: 20-10813 Date Filed: 03/04/2021 Page: 2 of 35

This appeal requires us to determine whether Plaintiff-Appellant American

Contractors Supply, LLC (“ACS”), a distributor of tilt-wall equipment, presented

evidence of facts tending to exclude the inference that a competing distributor and

a manufacturer acted independently when the manufacturer terminated further

business with ACS in the Florida market. ACS appeals the entry of summary

judgment against it and in favor of the competitor distributor, Defendant-Appellee

HD Supply Construction Supply, Ltd., known as “White Cap,” on ACS’s Sherman

Antitrust Act and Georgia state law claims, all based on the theory that White Cap

illegally conspired with the manufacturer, Meadow Burke. Because the evidence

in this case is at least “as equally consistent with permissible competition as it is

with an illegal conspiracy,” Helicopter Support Sys., Inc. v. Hughes Helicopter,

Inc., 818 F.2d 1530, 1533 (11th Cir. 1987), we affirm.

I. BACKGROUND

A. The Tilt Industry

ACS and White Cap are both distributors of equipment used in tilt concrete

wall construction in the southeast. “Tilt” or “tilt wall” construction is a method of

building concrete buildings: concrete walls are cast in panels on site, lifted into

place with cranes, and linked together. ACS and White Cap distribute tilt products

and equipment such as the cranes for lifting the wall panels and stilts to hold the

panels up and in place during construction.

2 USCA11 Case: 20-10813 Date Filed: 03/04/2021 Page: 3 of 35

ACS and White Cap were competitors in the Georgia and Florida markets.

In Georgia, there have been a total of three successful distributors of tilt-wall

equipment: ACS, White Cap, and Construction Materials, a company not involved

in this dispute. ACS distributed Meadow Burke-manufactured tilt products and

equipment and enjoyed a 25% share of the Georgia market. White Cap had a

market share of over 35%, and Construction Materials had a market share of about

40%.

In Florida, however, before 2016, only two main distributors operated:

Construction Materials primarily distributed equipment from manufacturer Dayton

Superior, and White Cap—with the largest presence in the state—nearly

exclusively distributed Meadow Burke equipment. White Cap invested in the

Meadow Burke brand in Florida by, for example, co-sponsoring events and

employing over 100 employees with more than 10 years’ experience with Meadow

Burke products. In their respective levels in the market chain, White Cap had over

a 75% share of the Florida market, and Meadow Burke had over a 65% share.

B. ACS’s Entry into the Florida Market

ACS wanted to expand. The location it settled on was Florida, and the

products it settled on were those from Meadow Burke—the manufacturer whose

products ACS sold in Georgia but that only White Cap had sold in Florida. ACS

has described Meadow Burke as a “superior product” when compared with the

3 USCA11 Case: 20-10813 Date Filed: 03/04/2021 Page: 4 of 35

other suppliers’ products, hence its desire for expansion into Florida with Meadow

Burke products.

ACS moved to make the entry into Florida happen by working with Mike

Wolstenholme, Meadow Burke’s Director of Tilt Up.1 ACS Chief Executive

Officer Jason Reuter and General Manager Ron Barteski met with Wolstenholme

at ACS’s Atlanta, Georgia office on April 28, 2016, where the Florida expansion

idea was discussed. Wolstenholme told ACS that Meadow Burke would supply

ACS with its products in the state if ACS opened an office in Tampa, Florida.

After this April meeting, ACS began its entry into the Florida market.

Before establishing ACS’s Florida office, Jason Reuter took steps to secure a bid

with a contractor in Florida; on May 10, 2016, he communicated with contractor

Flagship Tilt-Wall about bidding on its projects. Meadow Burke’s Wolstenholme

had told Jason Reuter to proceed with the bid—for a project to be supplied by

Meadow Burke—despite ACS not having yet opened its Florida office. ACS says

part of the reason it had the opportunity to bid on a Flagship project was because

Flagship complained to Meadow Burke and White Cap that there was a lack of

communication and coordination by White Cap. In other words, ACS saw an

1 Wolstenholme also held the title of Northeast Regional Sales Manager.

4 USCA11 Case: 20-10813 Date Filed: 03/04/2021 Page: 5 of 35

opportunity, perceiving a competitor to be faltering and not fulfilling customer

needs.

On June 22, 2016, Jason Reuter forwarded project drawings to Meadow

Burke’s engineering department to facilitate the Flagship bid. Around that same

time, he updated Wolstenholme on the progress of ACS’s development of a Tampa

office. And on July 1, ACS opened the office.

On July 5, 2016, ACS won the Flagship bid, and ACS notified Meadow

Burke. The Meadow Burke engineering department, which had already been

working on the matter, prepared the bill of materials. White Cap then accidentally

found out about ACS’s winning the bid (with Meadow Burke products) for the

Flagship project in Florida. Lori Dykes at Meadow Burke sent the bill of materials

in an email to Christina Miller, an equipment rental coordinator at White Cap, an

incident that White Cap describes as a clerical error. Miller forwarded the email to

Doug Bartle of White Cap, the White Cap contact for Meadow Burke.

C. Alleged Anticompetitive Conduct

The fallout from the clerical error started when Doug Bartle felt “hurt” after

seeing the bill of materials for a Meadow Burke-supplied project with ACS as the

distributor. He left a voicemail for Meadow Burke’s Lori Dykes and then had a

thirteen-minute phone call with her. After the call, Dykes sent an email on July 13,

2016, to Meadow Burke’s Wolstenholme and Greg Arnett, Meadow Burke’s

5 USCA11 Case: 20-10813 Date Filed: 03/04/2021 Page: 6 of 35

Southern Regional Sales Manager, describing the call with the subject line “John

House”; John House was the sales representative for Dayton Superior, another

supplier of tilt equipment in Florida and Meadow Burke’s primary competitor in

Florida. The email, which ACS labels as a “smoking gun,” read as follows:

Hello Greg and Mike,

I just talked to Bartle and WC is very upset and totally disappointed in MB! They can not believe we let someone else sell Tilt in FL nor can I! John [H]ouse[ 2] is flying in to meet with Doug[3] at [W]hite [C]ap tomorrow to discuss tilt for the Carolina area and I am sure Florida as well.

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989 F.3d 1224, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-contractors-supply-llc-v-hd-supply-construction-supply-ltd-ca11-2021.