Antitrust Law Daily Wrap Up, ANTITRUST— D.N.J.: Roofing materials distributor allowed to amend antitrust complaint against Firestone and competing distributors, (Apr 7, 2014)

By Edward L. Puzzo, J.D.

A roofing distributor’s Robinson-Patman Act claims against Firestone and competing distributors were timely and sufficiently pleaded to allow amendment of the initial complaint, the federal district court in Newark, New Jersey has ruled (Marjam Supply Company v. Firestone Building Products Company, April 4, 2014, Falk, M.).

Background. Marjam Supply was a distributor of commercial roofing materials manufactured by defendant Firestone. Marjam alleged that, beginning in 2010, Firestone began selling its products to direct competitors of Marjam with rebates, discounts, and special financing it was not willing to offer Marjam, in violation of the Robinson-Patman Act, which prohibits discriminatory pricing of similar goods when such pricing injures competition. In a November 30, 2012 decision, the court allowed the claim to proceed against Firestone, but not against the competing distributors who had benefited from the alleged price discrimination.

Leave to amend sought. Based upon an April 4, 2013 order in Marjam’s ongoing antitrust lawsuit, Marjam had until September 23, 2013 to amend its pleadings or add new parties. Marjam now sought leave to amend its complaint to allege Section 13(f) violations by three competing distributors and a related entity to Firestone. Firestone opposed the motion, on timeliness and futility grounds, noting that it had been over two years since Marjam’s original complaint and that a previous Section 13(f) claim against a competing distributor had already been dismissed.

Timeliness of motion to amend pleadings. The court ruled that Marjam did not unduly delay its motion to amend its pleadings. The court noted that discovery did not open until April 4, 2013, due to Firestone’s motions to dismiss and other pre-trial motions. Further, Marjam only learned of new facts that led to its amended complaint during discovery in July and August 2013, and it had moved to amend within the extended provided for doing so. Thus, the motion to amend the pleadings was timely.

Futility of amending pleadings. The court also ruled that the claims of Section 13(f) violations by competing distributors, contained in the amended complaint, were based on new facts not alleged in the previously dismissed claim against a competing distributor. Those new allegations were that certain competing distributors knowingly induced Firestone to provide favorable rebates and prices not available to Marjam. This differed from the initial complaint, which failed to plead facts which suggested that the competing distributors had any control over the prices and promotions Firestone offered to Marjam. The amended complaint did plead such facts against certain competing distributors. Thus, the amended pleadings were not so “clearly futile” as to require a denial of the motion to amend the pleadings, the court ruled.

The case is Civil Action No. 11-7119 (WJM).

Attorneys: Brett R. Schwartz (Lebensfeld Sharon & Schwartz PC) for Marjam Supply Co. Christopher Viceconte (Gibbons PC) for Firestone Building Products Co., LLC and Firestone Diversified Products, LLC. Douglas Scott Eakeley (Lowenstein Sandler PC) for Allied Building Products Corp. Gerhard P. Dietrich (Ward Greenberg Heller & Reidy, LLP) for Performance Roofing Associates, Inc. and Roofing Specialists, Inc.

Companies: Marjam Supply Co.; Firestone Building Products Co., LLC; Firestone Diversified Products, LLC; Allied Building Products Corp.; Performance Roofing Associates, Inc.; Roofing Specialists, Inc.

Cases: Antitrust NewJerseyNews