John River Cartage, Inc. v. Louisiana Generating, LLC, NRG Energy, Inc. and Headwaters Resources, Inc. ( 2020 )

STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
NO. 2020 CA 0162
JOHN RIVER CARTAGE, INC.
VERSUS
l
LOUISIANA GENERATING, LLC; NRG ENERGY, INC.; AND HEADWATERS
RESOURCES, INC.
Judgment Rendered:
MAR 0 4 2020
Appealed from the
Eighteenth Judicial District Court
In and for the Parish of Pointe Coupee
State of Louisiana
Case No. 44406
Honorable Alvin Batiste, Jr., Judge Presiding
Jason L. Melancon Counsel for Plaintiff/Appellant,
Robert C. Rimes John River Cartage, Inc.
R. Lee Daquanno, Jr.
Baton Rouge, Louisiana
and
Frank Tomeny, III
Baton Rouge, Louisiana
Jeffrey N. Boudreaux Counsel for Defendants/ Appellants,
William L. Caughman, III Louisiana Generating, LLC and NRG
Jessica C. Engler Energy, Inc.
Baton Rouge, Louisiana
Richard F. Zimmerman, Jr. Counsel for Defendant/ Appellant,
Baton Rouge, Louisiana Headwaters Resources, Inc.
and
Andrew J. Tuck, Pro Hac Vice
Lee A. Deneen, Pro Hac Vice
Atlanta, Georgia
and
R. Bryan Barnes, Pro Hac Vice
Columbia, South Carolina
and
Keith L. Richardson
Baton Rouge, Louisiana
BEFORE: McDONALD, THERIOT, AND CHUTZ, JJ.
CHUTZ, J.
In this antitrust litigation, all parties appeal the trial court' s judgment, which
granted defendants' motions for partial summary judgment on the issue of
plaintiff' s per se antitrust claims under La. R. S. 51: 122 and dismissed those claims
with prejudice, denied defendants' motions for partial summary judgment as to
plaintiff' s antitrust monopoly claim under La. R.S. 51: 123 and plaintiff' s
conversion claims, and denied plaintiff' s motion for partial summary judgment on
the issues of the antitrust mode of analysis and joint venture. For the following
reasons, we affirm.
FACTUAL BACKGROUND
In Louisiana, there are three primary power companies operating coal -
burning power plants: Entergy Gulf States, Inc. ( Entergy), which operates the
Nelson Power Station in Westlake, Louisiana; Cleco Power, LLC ( Cleco), which
owns and operates the Rodemacher Power Station near Boyce, Louisiana, Dolet
Hills Power Station near Mansfield, Louisiana, and the Madison 3 Unit in Lena,
Louisiana; and Louisiana Generating, LLC ( LaGen), a subsidiary of NRG Energy,
Inc. ( NRG) and the majority owner and operator of the Big Cajun II fossil fuel
steam -generating plant in New Roads, Louisiana.
As a result of burning coal, these plants produce byproducts called coal
combustion products ( CCPs). These CCPs include fly ash, bottom ash, and
economizer ash. These CCPs are marketable for different uses depending on their
characteristics. C- 618 fly ash, a powdered fly ash that has never been hydrated,
can be used in the concrete industry as a replacement for cement. When fly ash is
exposed to water ( hydrated), it hardens, and the resulting hydrated fly ash can be
used as an aggregate in applications such as soil stabilization and the formation of
roadbeds.
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The Nelson, Rodemacher, and Dolet Hills Power Stations and Big Cajun II
produce C- 618 fly ash. The Madison 3 Unit, which is a circulating fluidized bed
CFB) plant, produces a different type of ash other than that used in the concrete
industry.
The normal coal -burning process used to generate electricity requires that
CCPs be removed as they accumulate. Thus, coal -burning plants will contract with
third parties for the removal and marketing, or, if not sold, the storage, of the CCPs
they produce. As such, Entergy, Cleco, and LaGen have entered into marketing
agreements for the removal, marketing, sale, and storage if necessary of CCPs on
their plant sites.
With regard to Big Cajun II, Big River Industries, Inc. ( Big River) held an
exclusive marketing agreement for the removal, marketing, sale, and, if not sold,
storage of CCPs produced at Big Cajun II for many years when Big Cajun II was
owned and operated by Cajun Electric Power Cooperative, Inc. ( Cajun Electric).
Similarly, after LaGen became the owner and operator of Big Cajun II in 2000,
LaGen entered into an Exclusive Marketing Agreement with Big River.
The agreement between LaGen and Big River was amended several times
over the years. The last contract executed between LaGen and Big River, a January
299 2009 Exclusive Marketing Agreement, provided that Big River was granted the
total responsibility for identification of uses, promotion, sales and delivery of Fly
Ash, Bottom Ash, and other CCPs" produced at Big Cajun II (the LaGen/ Big River
Agreement). Moreover, Big River was also responsible for transporting all non -
marketed CCPs from the area where they were temporarily placed by LaGen to
LaGen' s onsite ash storage pond and to manage those stockpiled CCPs. Big River
was compensated based on a contractually established percentage of gross sales
less transportation costs for the various forms of CCPs, with Big River
guaranteeing the sale of a certain quantity of CCPs each year. Pursuant to the
0
LaGen/Big River Agreement, Big River was required to make a guaranteed per -ton
payment for any shortfall in the guaranteed sales quantities of CCPs.
Meanwhile, at the time when Big Cajun II was still owned and operated by
Cajun Electric, Big River began to experience a problem with an overabundance of
hydrated ash on the Big Cajun II premises. Thus, on August 1, 1998, Big River
entered into an agreement, the term of which was extended over the years, with
plaintiff, John River Cartage, Inc. ( JRC) to address the excess ash not sold to the
outside market (the JRC/ Big River Agreement).
Pursuant to the JRC/ Big River Agreement, JRC agreed to purchase and to
remove a specified minimum tonnage of hydrated fly ash and bottom ash at a price
set forth therein. JRC was responsible for all costs associated with the recovery,
loading, processing, and transportation of the hydrated fly ash and bottom ash from
the ash disposal ponds onsite. JRC also agreed to purchase excess powdered fly
ash at a higher set price.
The JRC/ Big River Agreement further acknowledged that Big River held the
exclusive marketing agreement for the marketing and sale of all fly ash and bottom
ash produced from the Big Cajun II operations and that the JRC/ Big River
Agreement was made " expressly subject to the terms and conditions" of the
LaGen/ Big River Agreement. Further, JRC acknowledged that the LaGen/Big
River Agreement could be amended " without prior notice or the consent of JRC.
As a result of the JRC/ Big River Agreement, JRC set up equipment on the
Big Cajun II plant site and began the removal of the hydrated fly ash and bottom
ash, which it processed into its product called " Grey Stone." Grey Stone is an
aggregate material, manufactured with fly ash, black bottom ash, brown bottom
ash, and water, which JRC marketed and sold for use in roadbeds and erosion
control projects. As JRC produced its Grey Stone product, it stockpiled the
product on the Big Cajun II site until such time that the material was sold and
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transported off the premises. Pursuant to the JRC/Big River Agreement, JRC
made payment of the contractual sum for the CCPs utilized when the product left
the Big Cajun II premises. JRC also on occasion sold excess powdered fly ash
within the state of Louisiana, but could do so only with Big River' s express
permission.
On January 20, 2011, LaGen entered into an Exclusive Marketing
Agreement with Headwaters Resources, Inc. ( HRI) for the marketing, sale, and
delivery of CCPs produced at Big Cajun II (the LaGen/HR1 Agreement). LaGen
and Big River then agreed that the LaGen/Big River Agreement terminated
effective January 21, 2011, and LaGen gave Big River thirty days from that date to
remove its property and equipment from the site.
Big River then notified JRC that Big River had lost its contract with LaGen
and, thus, JRC needed to remove all of its equipment from the Big Cajun II site.
JRC removed its equipment but was not able to remove the stockpiled Grey Stone.
At the time LaGen awarded HRI the LaGen/HRI Agreement for Big Cajun
II in 2011, IM also held exclusive marketing agreements with Entergy for the
Nelson Power Station and with Cleco for the Rodemacher and Dolet Hills Power
Stations, and the Madison 3 Unit. Thus, HRI was the exclusive marketing agent of
1
all sources of C- 618 fly ash produced in Louisiana from 2011 until 2014. Once
HRI took over the exclusive marketing agreement for Big Cajun II in 2011, there
was an initiative by HRI to increase fly ash prices previously paid by former Big
River customers to a level HRI considered to be the " competitive price."
Following the termination of the LaGen/ Big River Agreement and the
resulting termination of the JRC/ Big River Agreement, JRC could not sustain its
business and eventually ceased all business operations.
In 2014, HRI' s competitor, Charah, became the exclusive marketing agent for the
Rodemacher Power Station and Madison 3 Unit.
PROCEDURAL HISTORY
On January 26, 2012, JRC filed a petition seeking damages from IM and
NRG and LaGen ( hereinafter collectively referred to as NRG/LaGen). 2 JRC filed
several amending petitions, ultimately filing a First Amended Master Petition for
Damages, wherein JRC sought compensatory and treble damages from HRl and
NRG/LaGen due to their alleged: ( 1) wrongful conversion and conspiracy to
commit conversion of JRC' s stockpiled inventory of Grey Stone; ( 2) violations of
the Louisiana Unfair Trade Practices and Consumer Protection Law (" LUTPA"),
La. R.S. 51: 1401, et M.;and ( 3) violations of Louisiana' s antitrust law, including
a conspiracy to restrain trade by fixing prices of C- 618 fly ash marketed in
Louisiana in violation of La. R.S. 51: 122, and a conspiracy to monopolize the C-
618 fly ash market in Louisiana in violation of La. R.S. 51: 123. 3
With regard to its antitrust claims, JRC alleged that F RI and Cleco, Entergy,
and NRG/LaGen had entered into a horizontal conspiracy in restraint of trade.
First, it alleged that HRl, as the common and exclusive marketing agent for Cleco,
Entergy, and NRG/LaGen, operated a hub -and -spoke conspiracy on behalf of these
power companies by setting uniform prices, taking orders, and allocating
customers and production territory for coal ash they produced. Additionally, JRC
averred that Cleco, Entergy, and NRG/LaGen knew or should have known that
EM was simultaneously representing their collective competitive business
interests from 2011 through 2014. Thus, JRC alleged that a per se illegal
2JRC referred to NRG and LaGen collectively in its First Amended Master Petition, and
NRG and LaGen together filed pleadings below and in this appeal.
3l previous petitions, JRC had contended that HRI and NRG/LaGen had attempted to
restrain trade and monopolize " the CCP market" or the market for " CCPs and related products."
However, in its First Amended Master Petition for Damages, it more narrowly contended that
these defendants had engaged in antitrust violations with regard to " Louisiana' s C- 618 fly ash
industry."
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horizontal price- fixing agreement could be inferred from the parallel behavior of
these various entities. 4
Alternatively, JRC alleged that URI and NRG/LaGen entered into a vertical
price-fixing conspiracy when they executed the LaGen/ HRI Agreement. With
regard to this alleged conspiracy, JRC alternatively alleged that this vertical price-
fixing conspiracy was subject to the per se mode of analysis, the " quick look"
approach, or the full rule -of r-eason analysis.
With regard to its monopoly claims, JRC averred that HRI and NRG
officials conspired to create the monopoly that HRI ultimately exerted following
the LaGen/HRI Agreement and that they conspired to monopolize and did
monopolize the C- 618 fly ash market in violation of La. R.S. 51: 123.
JRC further alleged that HRI and NRG/LaGen were solidarily liable for
JRC' s damages resulting from their concerted and collective actions, which
constituted intentional and willful acts.
JRC filed a motion for partial summary judgment on the issues of per se
antitrust mode of analysis and joint venture, seeking a declaration that: ( 1) HRI had
entered into joint venture agreements with Cleco, Entergy, and NRG/LaGen;
and/ or (2) the per se antitrust mode of analysis was applicable to this matters
4A noted by the trial court in its written reasons for judgment, neither Cleco nor Entergy
are parties to this litigation.
5JRC' s motion for partial summary judgment was actually filed prior to the filing of its
First Amended Master Petition for Damages. The motion was scheduled for hearing together
with exceptions of no cause of action filed by HRI and NRG/LaGen with regard to JRC' s
previous " Master Petition for Damages." Following that hearing, the trial court sustained the
exceptions of no cause of action related to all of JRC' s antitrust claims under La. R.S. 51: 122
and 51: 123, dismissing those claims without prejudice, subject to JRC' s right to amend within
thirty days. Accordingly, it also denied as moot JRC' s motion for partial summary judgment.
JRC then filed its First Amended Master Petition for Damages, and HRI and NRG/ LaGen again
filed exceptions of no cause of action.
However, on appeal of the trial court' s subsequent judgment sustaining those exceptions
of no cause of action and dismissing JRC' s antitrust claims with prejudice, this court reversed the
judgment sustaining the exceptions of no cause of action and also vacated the earlier judgment
denying JRC' s motion for partial summary judgment as moot. In doing so, this court noted that
because the trial court' s rulings with respect to the exceptions of no cause of action had been
reversed, JRC' s motion for partial summary judgment on the issues of per se antitrust mode of
analysis and joint venture was " ripe for judicial determination." Thus, this court remanded the
matter with instructions that the trial court " consider and rule on JRC' s motion for partial
8
Defendant F RI also filed a motion for partial summary judgment, seeking
dismissal of JRC' s antitrust claims under both La. R.S. 51: 122 and 51: 123. 6 In
support of its motion, HRI contended that it was entitled to dismissal of JRC' s
antitrust claims against it as follows: ( 1) JRC could not establish antitrust injury
because its alleged injuries did not flow from the claimed anticompetitive conduct;
2) HRI' s alleged conduct was subject to the rule of reason because JRC has
identified nothing more than a series of vertical agreements; and ( 3) JRC' s rule of
reason and monopoly claims fail because the market alleged by JRC— the 50 -mile
radius extending from Big Cajun II—was not the relevant market.
Likewise, NRG/LaGen filed a motion for partial summary judgment,
seeking dismissal of JRC' s antitrust claims, averring that those claims should be
dismissed because: ( 1) JRC had not suffered an antitrust injury; and ( 2) even if
JRC could establish an antitrust injury, it had not alleged and could not prove a
horizontal conspiracy between NRG, LaGen, and HRI or any agreement among
those parties to restrain trade.'
Following a hearing on the motions, the trial court, by judgment dated
December 4, 2019, denied JRC' s motion for partial summary judgment; granted in
part HRI' s and NRG/LaGen' s motions for summary judgment as to JRC' s per se
antitrust claims under La. R.S. 51: 122; and denied in part those motions as to
summary judgment." John River Cartage, Inc. v. Louisiana Generating, LLC, 2018- 1611 ( La.
App. Pt Cir. 12/ 19/ 18), 2018 WL 6629472 * 6 ( unpublished), writs denied, 2019- 0122, 2019-
0111 ( La. 4/ 15/ 19), 267 So. 3d 1122, 1129.
On remand, JRC moved to reset its motion for partial summary judgment.
6Defendants HRI and NRG/LaGen also filed motions for partial summary judgment,
seeking dismissal of JRC' s conversion and conspiracy to commit conversion claims, contending
that JRC could not establish that it owned the Grey Stone product it accused them of converting.
7I its memorandum in support of its motion, NRG/ LaGen further stated that it joined in
HRI' s motion for partial summary judgment as to JRC' s antitrust claims and adopted HRI' s
arguments.
9
JRC' s monopoly claim under La. R.S. 51: 123. 8
JRC appealed the trial court' s December 4, 2019 judgment, challenging,
through six assignments of error, those portions of the judgment denying its motion
for partial summary judgment and granting HRI' s and NRG/LaGen' s motions for
partial summary judgment as to JRC' s per se antitrust claims, dismissing those
claims with prejudice.' HRI and NRG/LaGen also appealed the trial court' s
December 4, 2019 judgment, each contending through two assignments of error
that the trial court erred in denying their motions for partial summary judgment as
to JRC' s monopoly claims.
LEGAL PRECEPTS
Summary Judgment
A motion for summary judgment is a procedural device used when there is
no genuine issue of material fact for all or part of the relief prayed for by a litigant.
A summary judgment is reviewed on appeal de novo, with the appellate court using
the same criteria that govern the trial court's determination of whether summary
judgment is appropriate; i.e., whether there is any genuine issue of material fact,
and whether the movant is entitled to judgment as a matter of law. Beer Indus.
League ofLouisiana v. City ofNew Orleans, 2018- 0280 ( La. 6/ 27/ 18), 251 So. 3d
The burden of proof rests with the mover. La. C. C. P. art. 966( D)( 1). When
the mover will bear the burden of proof at trial, the mover has the burden of
showing that no genuine issue of material fact remains. Only when the mover
makes this showing does the burden shift to the opposing party to present evidence
sAs to HRI' s and NRG/LaGen' s motions for partial summary judgment seeking dismissal
of JRC' s conversion claims, in its written reasons, the trial court found that genuine issues of
material fact remained as to those claims. Accordingly, in its December 4, 2019 judgment, the
trial court also denied those motions. Neither HRI nor NRG/ LaGen has appealed that portion of
the judgment, and, thus, the conversion claims are not before us.
As set forth in La. R.S. 51: 135, all interlocutory judgments in cases involving antitrust
claims shall be appealable within five days and shall be heard and determined within twenty days
after the appeal is lodged.
10
demonstrating a material factual issue remains. Action Oilfield Services, Inc. v.
Energy Management Company, 2018- 1146 ( La. App. 1st Cir. 4/ 17/ 19), 276 So. 3d
538, 541- 542. If, however, the mover does not resolve all material issues of fact,
the burden never shifts to the opposing party. In that situation, the opposing party
has nothing to prove in response to the motion for summary judgment, and
summary judgment should be denied. See Hat' s Equipment, Inc. v. WHM,
L.L.C., 2011- 1982 ( La. App. 1st Cir. 5/ 4/ 12), 92 So. 3d 1072, 1076.
Nevertheless, if the mover will not bear the burden of proof at trial on the
issue raised in the motion, the mover's burden on the motion does not require it to
negate all essential elements of the adverse party's claim, action, or defense, but
rather to point out to the court the absence of factual support for one or more
elements essential to the adverse party's claim, action, or defense. Thereafter, the
burden is on the adverse party to produce factual support sufficient to establish the
existence of a genuine issue of material fact or that the mover is not entitled to
judgment as a matter of law. La. C. C. P. art. 966( D)( 1). Because it is the
applicable substantive law that determines materiality, whether a particular fact in
dispute is material can only be seen in light of the substantive law applicable to the
case. Pumphrey v. Harris, 2012- 0405 ( La. App. 1st Cir. 11/ 2/ 12), 111 So. 3d 86,
Conspiracy in Restraint of Trade Pursuant to La. R.S. 51: 122
Louisiana Revised Statutes 51: 122( A) provides, " Every contract,
combination in the form of trust or otherwise, or conspiracy, in restraint of trade or
commerce in this state is illegal." This statute is virtually identical to Section 1 of
the Sherman Antitrust Act, 15 U.S. C. § 1, et seq., and federal analysis of the
Sherman Antitrust Act is persuasive, though not controlling. 10 HPC Biologicals,
10The Louisiana statute applies to intrastate commerce, whereas the Sherman Antitrust
Act applies to interstate commerce and foreign trade. See La. R.S. 51: 121, La. R.S. 51: 122, &
15 U.S. C. § 1.
11
Inc. v.
UnitedHealthcare of Louisiana, Inc., 2016- 0585 ( La. App. 1St Cir.
5/ 26/ 16), 194 So. 3d 784, 792- 93.
The federal and state antitrust laws were intended to be sweeping in breadth,
encompassing every conspiracy, contract, or combination that restrains trade.
Louisiana Power & Light Co. v. United Gas Pipe Line Co., 493 So. 2d 1149,
1154- 55 & n. 12 ( La. 1986). Not every business arrangement that restrains trade in
some manner is illegal, however. Rather, La. R.S. 51: 122 has been interpreted to
prohibit only those agreements or conspiracies that unreasonably restrain trade.
See Reppond v. City of Denham Springs, 572 So. 2d 224, 230 ( La. App. 1St Cir.
1990), and Clary v. State Farm Mutual Automobile Ins. Co., 2016- 168 ( La. App.
3rd Cir. 11/ 23/ 16), 204 So. 3d 1102, 1113, writs denied, 2017- 0209, 2017- 0197
La. 2/ 15/ 17), 215 So. 3d 702, 703. Thus, to establish an antitrust violation, a
plaintiff must show both the existence of a conspiracy to restrain trade and that the
intended restraint on trade is unreasonable. See Nafrawi v. Hendrick Medical
Center, 676 F. Supp. 770, 774 ( N.D. Tex. 1987).
As to the existence of an agreement to restrain trade, the plain language of
La. R.S. 51: 122 requires a plurality of actors. A " contract," a " combination," and a
conspiracy" each suggests the participation of more than one person or entity.
Louisiana Power & Light Co., 493 So. 2d at 1155. In determining whether the
restraint of trade is unreasonable, three methods or modes of analysis have been
developed for evaluating the reasonableness of a restraint on trade: the rule -of -
reason analysis, the per se analysis, and the " quick look" analysis. Craftsmen
Limousine, Inc. v. Ford Motor Co., 363 F. 3d 761, 772 ( 8th Cir. 2004).
The rule -of r-eason analysis, which is used to analyze the reasonableness of
most trade -restraining agreements, requires the factfinder to determine whether the
questioned practice imposes an unreasonable restraint on competition
by
considering a variety of factors, including specific information about the relevant
12
business, its condition before and after the restraint was imposed, and the restraint' s
history, nature, and effect. State Oil Co. v. Khan, 522 U.S. 3, 10, 118 S. Ct. 275,
279, 139 L. Ed. 2d 199 ( 1997).
Unlike the rule -of r-eason analysis, the per se analysis does not allow inquiry
into the intent behind the restraint, its procompetitive justifications, or its actual
effect on competition. Instead, where a restraint is deemed per se unreasonable, a
conclusive presumption of illegality applies." Craftsmen Limousine, Inc., 363
F. 3d at 773.
As a general rule, horizontal agreements, those involving coordination
between competitors at the same level of a market structure, are considered to be
per se unreasonable, whereas vertical agreements, created between parties at
different levels of a market structure, are analyzed under the rule -of r-eason
analysis. Van Hoose v. Gravois, 2011- 0976 ( La. App. 1St Cir. 7/ 7/ 11), 70 So. 3d
1017, 1022.
Monopoly Pursuant to La. R.S. 51: 123
Louisiana Revised Statutes 51: 123 provides, in part, that "[ n] o person shall
monopolize, or attempt to monopolize, or combine, or conspire with any other
person to monopolize any part of the trade or commerce within this state." As an
economic matter, monopoly power exists where prices can be raised above the
levels that would be charged in a competitive market. To establish a claim for
monopoly, a plaintiff must establish that: ( 1) the defendant possessed monopoly
I to third method of analyzing whether a conspiracy is unreasonable is the abbreviated
quick look" analysis under the rule of reason, which is applied when " an observer with even a
rudimentary understanding of economics could conclude that the arrangements in question
would have an anticompetitive effect on customers and markets." California Dental Assn v.
Fed. Trade Comm' n, 526 U. S. 756, 770, 119 S. Ct. 1604, 1612, 143 L. Ed. 2d 935 ( 1999). The
quick -look approach does not require an elaborate industry analysis. Rather, when the restraint
is not per se unreasonable, but the likelihood of anticompetitive effects is obvious, the proponent
of the restraint must show some competitive justification for it. Thus, once the restraint is
deemed facially anticompetitive, the burden shifts to its proponent for justification on
procompetitive grounds. Realcomp H, Ltd. v. Fed. Trade Comm' n, 635 F. 3d 815, 825 ( 6``h Cir.),
cert. denied, 565 U. S. 942, 132 S. Ct. 400, 181 L. Ed. 2d 257 ( 2011).
13
power in a clearly defined economic and geographic region ( the relevant market);
and ( 2) the defendant had the specific purpose or intent to exercise or maintain that
power, as distinguished from growth or development as a consequence of a
superior product, business acumen, or historic accident. Plaquemine Marine, Inc.
v. Mercury Marine, 2003- 1036 ( La. App. 1st Cir. 7/ 25/ 03), 859 So. 2d 110, 119-
20.
Monopoly power is defined as the ability to control prices or to exclude
competition from the market, and the relevant market is the area of effective
competition within which the defendant operates. Id. It includes a geographic
market, which is the section of the country in which sellers of a particular product
operate, as well as a product market, which encompasses the differences among
various commodities and the willingness of buyers to substitute one product for
another. Failure to define the market in which the monopoly is allegedly exercised
is fatal to a monopolization claim. Id. at 120.
DISCUSSION
From a review of the pleadings and memoranda filed herein, JRC' s basic
theories of antitrust violations can be summarized as follows. HRI, operating at
the marketing and sales level of the Louisiana CCPs market, facilitated a scheme
among Cleco, Entergy, and NRG/LaGen, competing producers of CCPs at the
production level of the Louisiana CCPs market, to restrain trade within that
market. This scheme was accomplished by first eliminating competition in the
Louisiana CCPs market by replacing Big River, NRG/LaGen' s prior exclusive
marketing agent, with HRI, which already operated as the exclusive marketing
agency for Cleco and Entergy. Thereafter, HRI, operating as the common and
exclusive sales agency for all three of these competing power companies, refused
to deal with JRC by refusing to sell hydrated fly ash or excess powdered fly ash to
JRC, thereby preventing JRC from continuing its production and sale of Grey
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Stone in the secondary CCPs market. With Big River and JRC effectively
removed from the Louisiana CCPs market, ERI, as the common and exclusive
sales agency for Cleco, Entergy, and NRG/LaGen, and representing their collective
business interests, stabilized Louisiana' s CCPs market by imposing uniform price
increases and controlling output.
JRC contends that this alleged conspiracy among ERI, Cleco, Entergy, and
NRG/LaGen constitutes a horizontal restraint on trade that, under the per se
antitrust mode of analysis, is deemed per se unreasonable in violation of La. R. S.
51: 122. Alternatively, JRC alleges that the conspiracy in restraint of trade was a
vertical price- fixing conspiracy between HRI and NRG/LaGen. Finally, JRC
alleges that these actions constituted a conspiracy to monopolize in violation of La.
R. S. 51: 123.
The various motions for partial summary judgment addressed in the trial
court' s December 4, 2019 judgment focus on different aspects of these claims.
Denial of JRC' s Motion for Partial Summary Judgment on the Issues of Per
Se Antitrust Mode of Analysis and Joint Venture
JRC' s Assignments of Error Nos. 1 and 6)
While JRC alternatively alleged in its First Amended Master Petition for
Damages both a horizontal conspiracy and a vertical conspiracy in restraint of
trade, in its motion for partial summary judgment, JRC focused on the horizontal
conspiracy, seeking judgment declaring: ( 1) that ERI had entered into joint venture
agreements with Cleco, Entergy, and NRG/LaGen; and/or ( 2) that, given the law
affecting joint venture, common and exclusive sales agency, or hub -and -spoke
conspiracies, the per se antitrust mode of analysis was applicable to this matter.
In support of its motion, JRC alleged that when ERI entered into exclusive
marketing agreements with Cleco, Entergy, and NRG/LaGen, M entered into
separate joint ventures for the sales of CCPs with each of these power companies.
Additionally, it contended that the per se antitrust analysis applied to the alleged
15
conspiracy herein under three alternative theories: ( 1) HRI, as a common member
of separate horizontally competing joint ventures with NRG/LaGen, Entergy, and
Cleco, engaged in prohibited antitrust violations by fixing prices, allocating market
territory, and refusing to deal with JRC on behalf of the three horizontal joint
ventures; or ( 2) NRG/LaGen, Entergy, and Cleco delegated pricing, ordering, and
production/market allocation to HRI as their common and exclusive sales agency,
with the known and express purpose of fixing and stabilizing CCP commodity
prices; or ( 3) HRI and NRG/LaGen, Entergy, and Cleco entered into a hub -and -
spoke conspiracy by use of a common sales agency to carry out the unlawful
scheme of fixing and stabilizing CCPs prices. JRC further averred that each of the
three alternatively alleged arrangements between HRI and the power companies
resulted in a horizontal restraint of trade, thus requiring application of the per se
antitrust mode of analysis.
In denying JRC' s motion, the trial court concluded in written reasons for
judgment that JRC had failed to submit any factual support of a joint venture
between HRI and Cleco, Entergy, or NRG/LaGen or of a horizontal conspiracy to
restrain trade among these various entities. Thus, the court further reasoned that
because JRC had failed to set forth facts to establish the existence of a conspiracy,
there was no need to address the various theories alleged by JRC as requiring
application of the per se antitrust mode of analysis.
On appeal, JRC contends in its sixth assignment of error that the trial court
legally erred when it " defied" this court' s instruction in the prior appeal in John
River Cartage, Inc. v. Louisiana Generating, LLC, 2018- 1611 ( La. App. 1St Cir.
12/ 19/ 18), 2018 WL 6629472 at * 6 ( unpublished), writs denied, 2019- 0122, 2019-
0111 ( La. 4/ 15/ 19), 267 So. 3d 1122, 1129, " by refusing to categorize the unlawful
common selling agency alleged herein as a jurisprudentially recognized form of
per se illegal horizontal agreement." However, as set forth in footnote 5 above, in
16
the prior appeal in this matter, this court, having reversed and vacated the trial
court' s rulings on defendants' exceptions of no cause of action, noted that JRC' s
motion for partial summary judgment, which the trial court had denied as moot,
was " ripe for judicial determination." Thus, this court remanded the matter for the
trial court to " consider and rule on JRC' s motion for partial summary judgment,"
John River Cartage, Inc., 2018 WL 6629472 at * 6, which is precisely what the
trial court did when it denied JRC' s motion, finding that JRC had not proved its
entitlement to summary judgment in its favor. Thus, we reject JRC' s contention
that the trial court defied any prior instruction in our prior decision.
Moreover, in light of our conclusion, as more fully discussed below, that the
trial court properly dismissed JRC' s per se antitrust claims on HRI' s and
NRG/LaGen' s motions for partial summary judgment, we find it unnecessary to
address JRC' s contention in assignment of error number one that the trial court
erred in failing to categorize the alleged unlawful common selling agency as a per
se illegal horizontal agreement. Accordingly, we decline to address this issue and
affirm the portion of the trial court' s December 4, 2019 judgment denying JRC' s
motion for partial summary judgment.
Trial Court' s Partial Grant of HRI' s and NRG/LaGen' s Motions for Partial
Summary Judgment and Resulting Dismissal of JRC' s Per Se Antitrust
Claims under La. R.S. 51: 122
JRC' s Assignments of Error Nos. 2, 3, 4 & 5)
Next we turn to JRC' s challenge to the portion of the trial court' s judgment
granting in part HRI' s and La/Gen' s motions for partial summary judgment and
dismissing JRC' s per se antitrust claims. At the outset, we address JRC' s
contention that the trial court erred in deciding the issue of conspiracy on partial
summary judgment where JRC had not been given a fair opportunity for discovery
on this issue. The requirement in La. C. C. P. art. 966( A)(3) that a summary
judgment should be considered only after " an opportunity for adequate discovery"
17
has been construed to mean that there is no absolute right to delay action on a
motion for summary judgment until discovery is complete; rather, the requirement
is only that the parties have a fair opportunity to carry out discovery and to present
1st
their claim. Primeaux v. Best Western Plus Houma Inn, 2018- 0841 ( La. App.
Cir. 2/ 28/ 19), 274 So. 3d 20, 32. Additionally, trial courts in Louisiana have broad
discretion when regulating pre-trial discovery, which discretion will not be
disturbed on appeal absent a clear showing of abuse. Id.We note that JRC' s action has been pending since January of 2012. As early
as September of 2015, TRC amended its petition to assert antitrust violations
involving an alleged conspiracy in restraint of trade, again amending its petition in
August of 2017, to allege that the horizontal conspiracy involved FRI, Cleco,
Entergy, and NRG/LaGen. Moreover, HM first sought dismissal of these antitrust
claims in a motion for summary judgment it filed in February of 2017, thus
affording JRC ample notice that this issue would be before the trial court.
Accordingly, we find no clear abuse of the trial court' s discretion in declining to
delay ruling on this issue.
Turning to the merits of this claim, to satisfy the elements of conspiracy, a
plaintiff must show that the defendants engaged in concerted action, meaning a
conscious commitment to a common scheme designed to achieve an unlawful
objective. See HPC Biologicals, Inc., 194 So. 3d at 793. Moreover, to establish a
per se unreasonable horizontal conspiracy, a plaintiff must establish that the
conspiracy involved coordination between competitors at the same level of a
market structure. See Van Hoose, 70 So. 3d at 1022. Independent parallel
conduct, or even conduct among competitors that is consciously parallel, does not
alone establish the contract, combination, or conspiracy. Camsoft Data Systems,
Inc. v. Southern Electronics Supply, Inc., 2018- 1609 ( La. App. 1St Cir. 12/ 3/ 18),
18
276 So. 3d 1053, 1059, writs denied, 2018- 02088, 2018- 02018 ( La. 2/ 11/ 19), 263
So. 3d 1151, 1153.
Because JRC would have the burden of proof at trial to establish the
existence of a horizontal conspiracy, F RI and NRG/LaGen only had to point to the
absence of factual support for one element of that claim. In support of their
motions, they asserted in part that there was an absence of factual support for an
essential element of a per se antitrust violation under any of the theories JRC
alleged, because there is no evidence of the existence of any agreement or
conspiracy among Cleco, Entergy, and NRG/ LaGen. We find that MU and
NRG/LaGen met that initial burden.
Thus, once FM and NRG/LaGen successfully pointed to the lack of
evidence of Cleco or Entergy engaging in any concerted actions with NRG/LaGen
in furtherance of an alleged horizontal scheme in restraint of trade or of any
knowledge or acquiescence by Cleco or Entergy to such a scheme, the burden
shifted to JRC. JRC then had to produce factual support sufficient to establish the
existence of a genuine issue of material fact as to a horizontal conspiracy in
restraint of trade or that HRI and NRG/LaGen were not entitled to judgment as a
matter of law. La. C. C. P. art. 966( D)( 1).
On appeal, JRC contends in its second and fifth assignments of error that it
did produce factual support to establish the existence of genuine issues of material
fact regarding: ( 1) an unlawful horizontal conspiracy among the power companies
through either: ( a) direct evidence of an unlawful common sales agency
conspiracy, or ( b) circumstantial evidence of a hub -and -spoke conspiracy
coordinated by their common sales agency; or ( 2) a horizontal conspiracy by virtue
19
of a joint venture between HRI and Entergy and between HRI and Cleco,
12
respectively.
A. Joint Venture
Addressing JRC' s joint venture claim first, JRC avers that the trial court
erred in dismissing its per se antitrust claims where it demonstrated the existence
of genuine issues of material fact as to the existence of joint ventures between HRI
and Cleco, HRI and Entergy, and HRI and NRG/LaGen. Under this theory, JRC
posits that because HRI was a common member of individual joint -venture
partnerships with Cleco and Entergy, HRI' s actions in inviting NRG/LaGen to join
in a price- fixing and market -territory -allocation scheme were taken in the capacity
of a pure, non -vertical, direct competitor, thus constituting horizontal action in
restraint of trade.
A joint venture has been defined as a special combination of two or more
persons, where in some specific venture a profit is jointly sought without any
actual partnership or corporate designation. Coffee Bay Investors, L.L. C. v
W.O.G.C. Company, 2003- 0406 ( La. App. 1St Cir. 4/ 2/ 04), 878 So. 2d 665, 670,
writ denied, 2004- 1084 ( La. 6/ 25/ 04), 876 So. 2d 838. Generally, the essential
elements of a joint venture are the same as those of partnership, i.e., two or more
parties combining their property, labor, skill, etc. in the conduct of a venture for
joint profit, with each having some right of control. Cajun Electric Power
Cooperative, Inc. v. McNamara, 452 So. 2d 212, 215 ( La. App. 1St Cir.), writ
denied, 458 So. 2d 123 ( La. 1984). Thus, joint ventures are governed by the law of
partnership and share the same requisites as follows: ( 1) a contract between two or
more persons; ( 2) the establishment. of a juridical entity or person; ( 3) contribution
12 We note that JRC contends in its fourth assignment of error that the trial court erred in
concluding in its reasons for judgment that JRC could not establish a horizontal agreement
absent first establishing a joint venture. Because this court reviews summary judgments de novo,
we afford no deference to the trial court' s underlying reasoning for its judgment. King v. Allen
Court Apartments, 2015- 0858 ( La. App. 1st Cir. 12/ 23/ 15), 185 So. 3d 835, 839, writ denied,
2016- 0148 ( La. 3/ 14/ 16), 189 So. 3d 1069. Accordingly, we need not address this argument.
20
by all parties of either efforts or resources; ( 4) contribution in determinate
proportions; ( 5) joint effort; ( 6) mutual risk vis- a- vis losses; and ( 7) a sharing of
profits. Cajun Electric Power Cooperative, Inc., 452 So. 2d at 215.
Based on our de novo review of the evidence, we conclude that JRC has
failed to demonstrate a genuine issue of material fact as to several of these
elements. Regarding joint effort, the power companies produce energy, and CCPs
are merely a byproduct of that energy production. Because the accumulation of
these CCPs can impede the energy -production process, these power companies
contracted with HRI to manage these byproducts by transporting them out of the
production and surrounding areas either for marketing and sale or alternatively for
relocation to designated sites on the various plant premises. HRI alone was
responsible for the efforts in transporting the CCPs from the production areas for
sale or placement in other designated areas.
With regard to the element of the sharing of profits, while JRC contends that
Entergy and Cleco shared " net profits with IM, a review of the marketing
agreements of record does not support that contention. Rather, HRI was
compensated for the sale of fly ash and other CCPs under various formulas: a
percentage of gross sales; a fixed per -ton price for CCPs sold; or a combination of
a fixed component, a variable component and a percentage of net proceeds ( sales
revenues minus third -party transportation and handling costs for delivery to
customer only).
Additionally, regarding mutual risk vis-a-vis losses, HRI bore the risk of any
losses it suffered in fulfilling these contractual duties. While HRI was allowed to
account for some of its costs in the calculation of its compensation under the
various agreements, it bore the responsibility of many of the costs associated with
its contractual duties. IM also bore the additional risk in some situations of
required shortfall payments for its failure to sell designated tonnage amounts of
CCPs. Thus, the risk of whether its ultimate calculated compensation under the
various marketing agreements covered or exceeded all of its other costs and
resulted in profits was borne solely by HM, such that JRC cannot demonstrate a
genuine issue of material fact as to this element either.
Accordingly, JRC is unable to carry its burden of demonstrating the
existence of an issue of material fact as to whether the marketing agreements HRI
entered into with Cleco or Entergy, or NRG/LaGen, constituted joint ventures or,
consequently, whether a horizontal conspiracy in restraint of trade existed by virtue
of HRI' s actions as a pure, non -vertical, direct competitor of NRG/ LaGen.
B. Unlawful Common Sales Agency Agreement
Turning next to JRC' s claim of a horizontal conspiracy through the use of a
common sales agency, we note that not all common selling agency agreements
violate antitrust laws. See Virginia Excelsior Mills, Inc. a Federal Trade
Commission, 256 F. 2d 538, 541 ( 4t' Cir. 1958). However, such an agreement does
violate antitrust laws where it is used as a concerted action by two or more
horizontal competitors to accomplish a purpose that could not be lawfully
accomplished " by a direct agreement among the participating producers." Id.In Virginia Excelsior Mills, Inc., the United States Fourth Circuit Court of
Appeals held that an agreement among competing producers to eliminate
competition among themselves was a per se violation of Section 1 of the Sherman
Antitrust Act. The competing producers organized a new corporation, the stock of
which the competing producers owned and the board of directors for which was
selected from among the competing producers. The new corporation then entered
into identical contracts with each producer -stockholder appointing the new
corporation as each producer' s exclusive sales agent. Moreover, by agreement of
the producers, orders were to be allocated among them on the basis of their relative
productive capacities, and no producer would increase its productive capacity.
22
Virginia Excelsior Mills, Inc., 256 F. 2d at 539- 540. As such, the underlying
agreement of these competitors to use a common selling agency to achieve their
unlawful purpose was well established by evidence of a direct agreement or
conspiracy among all of these competitors through the use of a separately created
entity, owned and controlled by the horizontal competitors.
Nonetheless, given the absence of any evidence herein of such direct
agreement among the power companies to use their common sales agency HRI for
an unlawful purpose, JRC contends that it was never obligated to prove the
horizontal agreement by direct communications among the power companies.
Rather, citing United States v. Masonite Corporation, 316 U.S. 265, 275, 62 S. Ct.
1070, 1075- 1076, 86 L. Ed. 1461 ( 1942), JRC asserts that a plaintiff may establish
the existence of a horizontal agreement by offering direct evidence of a common
agent engaging in prohibited conduct for the group of horizontal competitors
pursuant to the " express delegation, acquiescence, or understanding" of the
competing horizontal members. See Masonite, 316 U.S. at 276, 62 S. Ct. at 1076.
Moreover, JRC argues that it presented a genuine issue of fact of a horizontal
conspiracy by offering direct evidence of HRI setting uniform market prices and
controlling output pursuant to contractual delegation and/or acquiescence of Cleco,
Entergy, and NRG/LaGen.
However, based on our de novo review of the evidence submitted, there is no
evidence that HRI controlled output of fly ash or any other CCPs produced by
Cleco, Entergy, or NRG/LaGen. To the contrary, a review of the marketing
agreements of record demonstrates that the power companies controlled their own
energy production levels and their own internal use of CCPs they produced, which,
in turn, determined the quantity of CCPs made available for marketing. The
Entergy marketing agreements for the Nelson Power Station indicate that the
amount of ash available under the marketing agreement would be determined by
23
the operation of Nelson Unit 6, which operation would be controlled by Entergy
in its absolute discretion." Entergy further reserved the right to use any part of
the CCPs produced by Nelson Unit 6. Similarly, the Cleco marketing agreements
contained provisions indicating either that the quantity of ash produced would vary
depending on many factors involved in plant operations, that Cleco made no
guarantee as to quantity of ash that would be made available, or that Cleco would
not alter its power supply to ensure a volume of ash. Cleco also reserved the right
to use CCPs for its own benefit and even reserved the right to donate fly ash
produced at the Dolet Hills Power Station for various purposes. Finally, the
LaGen/HRI Agreement also provided that LaGen expressly made no warranties as
to the quantity of CCPs and reserved the right to use CCPs produced at Big Cajun
11 for its own purposes.
Moreover, JRC failed to demonstrate the existence of a genuine issue of
material fact as to the alleged acquiescence by Cleco or Entergy in any such
scheme in a concerted effort to restrain trade. The record demonstrates that HW
contracted with these power companies years or even decades apart. URI ( or its
predecessors) first contracted with Cleco ( and its predecessors) in 1981 with regard
to fly ash and other CCPs produced at the Rodemacher Power Station and
thereafter in 2003 for fly ash produced at the Dolet Hills Power Station. FM (or
its predecessors) first contracted with Entergy ( and its predecessors) in 1986 for
ash marketing services at the Nelson Power Station. By contrast, it did not
contract with NRGlLaGen until 2011.
Further, there is no evidence that either Cleco or Entergy had any knowledge
of M's marketing agreements with each other or with NRG1LaGen, or of URI' s
marketing efforts on behalf of those other entities. Nor is there any evidence that,
in executing these marketing contracts years apart, the power companies agreed to,
or even later acquiesced in, a scheme to fix market prices and control output.
24
Accordingly, we conclude that JRC failed to demonstrate the existence of a
genuine issue of material fact as to an alleged horizontal conspiracy by Cleco,
Entergy, and NRG/LaGen, implemented by HRI as their common sales agency, by
either contractual delegation or acquiescence.
C. Hub -and -Spoke Conspiracy
JRC next contends that it demonstrated a genuine issue of material fact of a
horizontal agreement in restraint of trade by offering circumstantial evidence of a
hub -and -spoke" conspiracy. A hub -and -spoke conspiracy is one in which an
entity at one level of the market structure, the " hub," coordinates an agreement
among competitors at a different level, the " spokes." U.S. v. Apple, Inc., 791
F. 3d 290, 314 ( 2"d Cir. 2015), cert. denied sub nom., U.S. , 136 S. Ct.
1376, 194 L. Ed. 2d 360 ( 2016). A traditional hub -and -spoke conspiracy has three
elements: ( 1) a hub, such as a dominant purchaser; ( 2) spokes, such as competing
manufacturers or distributors that enter into vertical agreements with the hub; and
3) the rim of the wheel, which consists of horizontal agreements among the
spokes. In re Musical Instruments and Equipment Antitrust Litigation, 798 F. 3d
1186, 1192
Where no direct evidence exists for the third element, a horizontal
agreement among the spokes ( or competitors), courts evaluate circumstantial
evidence, called " plus factors," to determine whether a plaintiff' s evidence is more
probative of conspiracy than of conscious parallel behavior. In re Disposable
Contact Lens Antitrust, 215 F. Supp. 3d 1272, 1294 ( M.D. F1. 2016). Plus factors
are economic actions and outcomes that are largely inconsistent with unilateral
conduct, but largely consistent with explicitly coordinated action. Accordingly,
they may raise an inference of conspiracy. Id. at 1294- 1295. These plus factors
include: ( 1) a common motive to conspire, ( 2) evidence showing that the parallel
acts were against the apparent individual economic self- interest of the alleged
25
conspirators, ( 3) evidence of a high level of interfirm communications, and ( 4)
historically unprecedented changes in pricing structure made at the very same time
by multiple competitors for no other discernible reason. Id. at 1295 Apple, Inc.,
791 F. 3d at 315. JR.0 contends on appeal that it presented factual support
demonstrating issues of material fact as to these plus factors and, thus, that
summary judgment dismissing its per se antitrust claims was inappropriate.
First, regarding a common motive to conspire, JRC contends that there was a
common motive to conspire because of excess supply of CCPs and Big River and
M's " historical pricing competition," which " tended to" drive prices of CCPs
downward or neutral. Based upon our de novo review of the summary judgment
evidence, JRC did present some evidence from its economist that the price of
CCPs was generally trending downward from 2008 through 2010.
Secondly, JRC contends that the each power company' s separate marketing
agreement with M was not in the individual company' s economic self-interest
where each " contractually relinquished [ its] right to individually compete for CCPs
sales" by authorizing HRI to centrally manage and control prices and output.
However, JRC presented no evidence that the marketing agreements, entered into
by the power companies years and even decades apart, were against their
individual self -interests. Regarding controlling output, as discussed above, output
of CCPs is determined by energy production levels, which are controlled by the
individual power companies, and the quantity of CCPs made available for
marketing is further dependent upon the power companies' discretionary use of the
CCPs they produce. Additionally, the Cleco contracts of record for the Dolet Hills
Power Station required minimum sales levels of CCPs with penalty payments for
failure to meet those minimums, and the Entergy marketing agreement for the
Nelson Power Station specifically provided that the marketing contractor would
use its best efforts to market all ash delivered under the agreement. ( Emphasis
26
added). These contractual provisions demonstrate that the power companies'
overall objective was simply to remove CCPs from their premises — not, as JRC
suggests, that they conspired through the use of marketing agreements to authorize
HU to control prices against their individual self i-nterests.
As to interfirm communications, JRC points to a letter from HRI to
NRG/LaGen evidencing a possible scheme to raise prices. In the letter, HRI, in an
attempt to gain the NRG/LaGen marketing contract, indicated that HRI managed
all other sources of C- 618 fly ash produced in the State of Louisiana" and that
HRI' s involvement with Big Cajun II " could present significant opportunities for
both companies to increase sales and to maximize pricing of the products."
Regarding the fourth plus factor, JRC did present evidence that the price of
CCPs in Louisiana, while generally trending downward from 2008 through 2010,
leveled off in 2011, just as the LaGen/ IM Agreement was executed, and then
began to rise. Additionally, JRC offered evidence that once HRI entered into the
LaGen/ HRI Agreement, HRI instituted an initiative to raise prices for CCPs
produced by Big Cajun II because HRI believed that the prices previously charged
by Big River were below the " competitive rate. This initiative was further
evidenced by HRI' s email communication to one customer, identified as a former
incrementally raising prices to that customer for an
Big River customer,
unidentified product over a seven- month period from February to September of
2011, shortly after HRI became the marketing agency for NRG/LaGen.
Nonetheless, based on our de novo review of the limited evidence upon
which JRC relies to support the plus factors, we conclude that JRC did not
demonstrate a genuine issue of fact as to whether a horizontal agreement among
the power companies should be inferred. Specifically, while the evidence offered
suggests that CCPs prices were generally trending downward from 2008 to 2010
and thereafter stabilized and began increasing, the graph presented by JRC' s
27
economist is not broken down by prices charged individually by Cleco, Entergy,
and NRG/LaGen. Thus, it is impossible to discern from the graph which of the
power companies may have experienced decreasing prices or whether the upward
trend in prices was a result of an increase in prices " by multiple competitors." See
In re Disposable Contact Lens Antitrust, 215 F. Supp. 3d at 1295.
Additionally, as discussed above, the language of the various marketing
agreements does not suggest that they were against the individual economic self -
interests of the power companies. And the written communications from HRI to
NRG/ LaGen represent vertical communications between a marketing agency and
one producer, wherein HRI suggested that HRI and NRG/LaGen could maximize
pricing. JRC offered no evidence of any interfirm communications among or
between the horizontal power companies Cleco, Entergy, or NRG/LaGen to
suggest a conspiracy among them, and no communications between HRI and Cleco
or Entergy, much less a high level of such communications. Moreover, the written
communication from HRI to NRG/LaGen and the evidence of HRI' s initiative to
raise prices for CCPs produced by Big Cajun II indicates price changes for that one
CCPs producer alone. Id.Accordingly, JRC failed to carry its burden of demonstrating a genuine issue
of material fact as to whether a horizontal agreement among the power companies
should be inferred. As such, there is likewise no genuine issue of fact as to
whether HRI, Cleco, Entergy, and NRG/LaGen entered into a hub -and -spoke
conspiracy. Having failed to demonstrate an issue of fact as to a horizontal
conspiracy under any of the theories it has advanced, JRC has failed to establish
that HRI and NRG/LaGen are not entitled to summary judgment dismissing JRC' s
per se antitrust claims. Thus, the portion of the trial court' s December 4, 2019
judgment dismissing JRC' s per se antitrust claims is likewise affirmed.
28
Trial Court' s Denial in Part of HRI' s and NRG/LaGen' s Motions for Partial
Summary Judgment Seeking Dismissal of JRC' s
La. R.S. 51: 123 Monopoly Claim
HRI' s and NRG/ LaGen' s Assignments of Error Nos. 1 & 2)
In their appeals of the trial court' s December 4, 2019 judgment, HRI and
NRG/LaGen both contend that the trial court erred in denying in part their motions
for partial summary judgment and refusing to dismiss JRC' s monopoly claims
under La. R.S. 51: 123. HRI and NRG/LaGen each assert that the trial court erred
in failing to grant its motion for summary judgment on the monopoly claims: ( 1)
where JRC did not suffer antitrust injury; and ( 2) where JRC failed to define a
geographic market.
With regard to antitrust injury, a plaintiff suffers an antitrust injury only if its
loss is the type of loss that the claimed antitrust violation is likely to cause. HPC
Biologicals, Inc., 194 So. 3d at 797. " Antitrust injury" is defined as the type of
injury that the antitrust laws were intended to prevent and that flows from that
which makes the defendants' acts unlawful. The requirement of an antitrust injury
ensures that a plaintiff can recover only if the loss stems from a competition -
reducing aspect or effect of the defendants' behavior. Id. A plaintiff must allege a
causal connection between its alleged injury and the anticipated anticompetitive
effect of the specific practice that allegedly violates antitrust law. BRFHH
Shreveport, LLC v. Willis Knighton Medical Center, 176 F. Supp. 3d 606, 626
W.D. La. 2016).
HRI and NRG/LaGen assert that JRC did not suffer antitrust injury because
it did not pay increased prices and, thus, did not suffer the " anticipated
anticompetitive effect" of an alleged monopoly. According to HRI and
NRG/ LaGen, the causal connection here is lacking. They contend that the
anticipated anticompetitive effect of an alleged monopoly is that the monopolist
will raise prices to anticompetitive levels. Asserting that JRC never bought C- 618
29
fly ash directly from LaGen, NRG or HRI and, thus, never paid increased prices,
defendants claim that JRC did not suffer the harm a monopoly is likely to cause.
However, the antitrust injury claimed by JRC is not that it was forced to pay
higher prices for CCPs, but rather that it suffered antitrust injury from HRI' s
refusal to deal with JRC. A unilateral refusal to deal generally is not unlawful.
However, a monopolist' s refusal to deal becomes actionable under the antitrust
laws where the refusal is designed to have an anticompetitive effect, whether to
gain market share, to drive up prices, or to obtain some other illegal goal. Mr.
Furniture Warehouse, Inc. is Barclays American/ Commercial, Inc., 919 F. 2d
1517, 1522 ( 11th Cir. 1, 990), cert. denied sub nom., 502 U.S. 815, 112 S. Ct. 68,
116 L. Ed. 2d 43 ( 1991). Thus, monopolistic or other anticompetitive intent is the
key factor in determining whether an antitrust violation has occurred. See Id.In the instant case, JRC presented evidence suggesting that HRI refused to
deal with JRC once HRI became the marketing agency for NRG/LaGen. However,
questions of material fact remain as to this issue. HRI and NRG/LaGen contend,
nonetheless, that the sole exception to a company' s lawful right to refuse to deal
with its competitors is where a monopolist seeks to terminate a prior voluntary
course of dealing with a competitor. See In re Elevator Antitrust Litigation, 502
F. 3d 47, 52 ( 2nd Cir. 2007). According to HRI and NRG/LaGen, JRC cannot
establish a refusal -to -deal claim because JRC had no preexisting relationship with
HRl or NRG/LaGen.
However, JRC notes that HRI was representing Cleco, Entergy, and
NRG/LaGen as their exclusive marketing agency, for CCPs sales at the time FM
allegedly refused to deal. with JRC. Accordingly, JRC asserts that HRI' s actions
on behalf of all of the power companies would have effectively prevented JRC
from dealing with any of these power companies. Additionally, JRC contends that
a genuine issue of fact remains as to whether it had a prior legally enforceable
30
relationship with NRG/ LaGen. Considering the foregoing and based on our review
of the summary judgment evidence, we conclude that disputed issues of fact
remain as to whether JRC suffered antitrust injury because of a refusal to deal.
With regard to the relevant geographic market, the geographic element of
the relevant market consists of the area in which sellers of the defendants' product
operate and to which buyers can practicably turn to obtain that product. State ex
rel. Ieyoub v. Racetrac Petroleum, Inc., 2001- 0458 ( La. App. 3rd Cir. 6/ 20/ 01),
790 So. 2d 673, 679. Thus, the issue of geographic market is also a fact -intensive
inquiry. Based on our de novo review of the evidence submitted, we likewise
conclude that issues of fact remain as to the relevant geographic market.
Accordingly, HRI and NRG/LaGen were not entitled to dismissal of JRC' s
monopoly claims on summary judgment. As such, the portion of the trial court' s
December 4, 2019 judgment denying in part HRI' s and NRG/LaGen' s motions for
partial summary judgment as to JRC' s monopoly claims is affirmed.
CONCLUSION
For the above and foregoing reasons, the trial court' s December 4, 2019
judgment, denying the motion for partial summary judgment of plaintiff, John
River Cartage, Inc., and granting in part and denying in part the motions for partial
summary judgment filed by defendants, Headwaters Resources, Inc. and Louisiana
Generating, LLC and NRG Energy, Inc., is affirmed. Costs of this appeal are
assessed one- third to John River Cartage, Inc., one- third to Headwaters Resources,
Inc., and one-third to Louisiana Generating, LLC and NRG Energy, Inc.
AFFIRMED.
31