Steel rebar maker Commercial Metals must face rival's antitrust lawsuit

Commercial Metals

01/07/2024 22:34

By Mike Scarcella
       July 1 (Reuters) - Steel rebar giant Commercial Metals
 CMC.N  must face an antitrust lawsuit that accuses it of
sidelining a potential competitor by frustrating its efforts to
build a mill in Southern California, driving up rebar prices.
    In a ruling unsealed on Friday, U.S. District Judge Haywood
Gilliam Jr. in Oakland, California, denied a request from
Commercial Metals for summary judgment in the 2020 lawsuit from
plaintiff Pacific Steel.
    Gilliam’s order, which also denied Pacific Steel's summary
judgment request, sets the case on course for a trial later this
month. Pacific Steel has alleged that Commercial Metals' conduct
caused rebar purchasers to overpay by $50 million a year.
    Irving, Texas-based Commercial Metals and San Diego-based
Pacific Steel did not immediately respond to requests for
comment on Monday. 
    Commercial Metals has denied any wrongdoing.
    Steel reinforcing bar, or “rebar,” is a key material in the
construction industry that is used to strengthen concrete.
Commercial Metals, a top U.S. manufacturer, recorded net
earnings in fiscal year 2023 of nearly $860 million.
    Pacific Steel, founded in 2014, said it had an agreement
with another company, Danieli Corp, to open a type of rebar mill
in Southern California that would have served most of California
and parts of Arizona, Nevada and Utah.
    The lawsuit alleged Commercial Metals convinced Danieli not
to do business with Pacific Steel, and the project was delayed.
Danieli is not a defendant in the lawsuit. 
    Pacific Steel said Commercial Metals’ agreement with Danieli
amounted to the “exclusion of a substantial, lower-cost
competitor” from setting up a mill.
    Commercial Metals said in a filing that its agreement with
Danieli “addressed only one of many available options for
producing rebar.”
    Pacific Steel and Commercial Metals told the judge last
month that they were “not optimistic" about settling the case
before trial. 
    The case is Pacific Steel Group v. Commercial Metals Co,
U.S. District Court for the Northern District of California, No.
4:20-cv-07683.
    For Pacific Steel: Benjamin Brown of Cohen Milstein Sellers
& Toll; and Christopher Wheeler of Farella Braun + Martel
    For Commercial Metals: Steve Bizar of Dechert; and Bonnie
Lau of Morrison & Foerster

 (Reporting by Mike Scarcella)