Jensen Enterprises Inc. v. Oldcastle Precast, Inc., et al.

Counsel for Oldcastle retained Cornerstone Research and Dr. Gregory Rosston of Stanford University to address issues of market definition, liability, and damages.

Retained by Folger Levin & Kahn

On February 23, 2009, Judge Susan Illston (U.S.D.C., Northern District of California) granted summary judgment in favor of the defendants Oldcastle Precast, Inc. (Oldcastle), Pacific Bell Telephone Company, SBC Services, Inc., and Nevada Bell Telephone Company (together, AT&T). The plaintiff, Jensen Enterprises Inc. (Jensen), a competitor of Oldcastle, alleged that Oldcastle and AT&T had colluded to create an improper and anticompetitive arrangement whereby Oldcastle gained monopoly power over precast concrete vault sales related to the AT&T wireline network.

Counsel for Oldcastle retained Cornerstone Research and Dr. Gregory Rosston of Stanford University to address issues of market definition, liability, and damages.

Judge Susan Illston granted summary judgment in favor of the defendants Oldcastle Precast, Inc.

According to the plaintiff, Oldcastle’s alleged monopoly power manifested itself in increased volume and in AT&T’s alleged practice of paying developers less than the price developers paid for the vaults. Dr. Rosston opined that most of the plaintiff’s allegations, even if true, would not result in antitrust harm to the plaintiff. Furthermore, Dr. Rosston demonstrated through an in-depth analysis of company data that Oldcastle did not charge developers monopoly prices and that the lack of monopoly prices was contrary to the plaintiff’s claims that AT&T’s policies harmed competition. Dr. Rosston’s analysis showed that there was in fact no evidence of harm to customers or competition.

In her ruling rejecting the plaintiff’s claims, Judge Illston, relying heavily on the U.S. Supreme Court’s decision in NYNEX Corp. v. Discon, Inc., stressed that allegations of antitrust harm must be founded in harm to competition and not just to a competitor. Judge Illston concluded that without elevated prices there was no evidence of injury to competition even if Oldcastle had increased its sales volume and AT&T had underpaid developers. Also, Judge Illston ruled that Jensen could not prove antitrust injury, reasoning that “[i]f AT&T had designated Oldcastle as its exclusive supplier while fully reimbursing developers and contractors—an arrangement that Jensen says would have been legal and without antitrust implications—Jensen still would have suffered the same harm (lost profits) due to its legal exclusion from the market.”