Antitrust Law Daily Wrap Up, ANTITRUST—D. Nev.: Noerr-Pennington doctrine could be defense to steel framing manufacturer’s claims against competitors, (Mar 13, 2015)

By Linda O’Brien, J.D., LL.M.

The Noerr-Pennington doctrine was a potential valid affirmative defense by a group of steel framing manufacturers to a competing manufacturer’s claims that the group violated antitrust laws by conspiring to cause the competitor to lose significant market share in the nationwide market for nonstructural steel framing products, the federal district court in Las Vegas has decided. Thus, the group’s motion for leave to file an amended answer was granted (ClarkWestern Dietrich Building Systems LLC v. AllSteel & Gypsum Products, Inc., March 11, 2015, Foley, G.).

ClarkWestern Dietrich Building Systems (ClarkDietrich) manufactures nonstructural steel framing products, steel studs, and tracks, which are used to create interior walls of office buildings, hotels, warehouses, stores, and other commercial buildings. Allsteel & Gypsum Products, Inc., Consolidated Fabricators Corp., Craco Manufacturing, Inc., Custom Stud, Inc., Design Shapes in Steel, Inc., Frametek Steel Products, Inc., and United Metal Products, Inc. are competitors of ClarkDietrich in the market for nonstructural framing products and members of the Steel Stud manufacturers Association, Inc. (SSMA), the trade association for steel framing product manufacturers.

In the development of the SSMA’s compliance program to set forth industry standards, SSMA members adopted technical requirements that ClarkDietrich’s nonstructural steel products could not comply with. ClarkDietrich filed suit against the group of competitors, alleging claims for restraint of trade, intentional interference with prospective economic advantage, common law civil conspiracy, unjust enrichment, and violations of Section 1 of the Sherman Act and the Racketeering Influenced and Corrupt Organizations Act (RICO). ClarkDietrich contended that the new requirements lacked any technical, scientific, engineering, or safety basis and were imposed to ensure that ClarkDietrich’s products would not certified by the SSMA thereby eliminating ClarkDietrich as a competitor. The defendants moved for leave to file an amended answer to the complaint.

Noerr-Pennington doctrine. The court determined that the Noerr-Pennington doctrine could be asserted as an affirmative defense with respect to the plaintiff’s Sherman Act claims relating to civil actions between the parties. The Noerr-Pennington doctrine immunizes companies from liability for efforts taken to influence government action. ClarkDietrich alleged that the SSMA sought to intimidate a trade association of purchasers of nonstructural steel framing products into supporting the new requirements by threatening litigation. Since the plaintiff made the allegation as part of its factual basis for its Sherman Act conspiracy claim, the Noerr-Pennington doctrine could provide a valid defense. Thus, the defendant’s motion seeking leave to file first amended answer was granted.

The case is No. 2:14-cv-01319-RFB-GWF.

Attorneys: Anthony Cillo (Cohen & Grigsby, PC), and Dominic Surprenant (Quinn Emanuel Urquhart & Sullivan, LLP) for ClarkWestern Dietrich Building Systems LLC. Gregory D. Brunton (Reminger Co., LPA), and Leland E. Backus (Backus-Carranza) for Allsteel & Gypsum Products, Inc., Consolidated Fabricators Corp., Craco Manufacturing, Inc., Custom Stud, Inc., and Design Shapes in Steel, Inc.

Companies: ClarkWestern Dietrich Building Systems LLC; Allsteel & Gypsum Products, Inc.; Consolidated Fabricators Corp.; Craco Manufacturing, Inc.; Custom Stud, Inc.; Design Shapes in Steel, Inc.

Cases: Antitrust NevadaNews