Jackpot awaits lawyers in price-fixing litigation

March 30, 2009
Attorneys for concrete purchasers who say they were victims of a price-fixing scheme have waged a tenacious legal battle over the last four years. And now they're ready to cash in.

This month, they asked federal court Judge Sarah Evans Barker to approve $8.13 million in attorney's fees—a sum representing one-third of the $24.4 million they've collected in settlements with three concrete firms.

Individual plaintiffs who say they overpaid for concrete because of the scheme didn't return calls or declined to comment. But their attorneys don't expect clients to make a fuss, saying the fees are in line with other payouts in similarly complex class actions around the country.

"I can tell you that of the many, many class members we have spoken to, all of them have been very gracious in their comments about our hard work, and all of them hope we get the full fees we have requested," said Irwin Levin, managing partner of Cohen & Malad in Indianapolis.

Heavy hitters

Levin, 54, is co-counsel in the case with Stephen Susman, 66, of Susman Godfrey in Houston. Both are heavy hitters nationally in class action litigation accustomed to collecting millions of dollars in contingency fees. Just last fall, Levin and his firm won a $16.5 million settlement for the Indiana Department of Insurance in a lawsuit stemming from the collapse of a health insurance trust. That deal, struck with an Alabama-based insurer, yielded more than $6 million in fees.

Levin and his colleagues in the price-fixing case argue that the court should distribute amounts raised so far, rather than waiting months or years for the outcome of litigation against the three remaining defendants—Greenfield-based Irving Materials, Fishers-based Builder's Concrete & Supply and Noblesville-based Beaver Materials.

Already settling were Bridgeview, Ill.-based Prairie Material Sales Inc., Indianapolis-based AmericanConcrete Co. and Shelbyville-based Shelby Materials. The bulk of the money—$19 million—came from Prairie, now part of Pontiac, Ill.-based Southfield Corp.

Under the settlement-distribution plan filed by Levin and Susman, concrete purchasers would receive $14.2 million after payment of attorney's fees and $1.9 million in litigation expenses.

"It's time for people victimized by the conspiracy to get some of their money back," Levin said. "We are very proud of this distribution."

But attorneys for the companies that haven't settled don't share his enthusiasm.

They say in a new court filing that it is premature to distribute settlement money, since Judge Barker hasn't even ruled yet on whether to certify the plaintiffs as a class. They also suspect some of the expenses the attorneys want reimbursed actually are for costs unrelated to the three settlements.

Legal brawl

That the two sides are squabbling over fees and expenses should surprise no one. The legal teams have brawled over almost all aspects of the case since its filing on June 30, 2005, one day after the federal prosecutors announced what they called one of their biggest anti-trust investigations in history.

That probe triggered a torrent of criminal convictions and settlements—the largest with Irving Materials, which paid $29 million. Total fines topped $35 million, and nine concrete-industry executives received prison sentences.

Prosecutors have said officials with Irving and other firms colluded on pricing for more than $700 million in ready-mixed concrete sold in the Indianapolis area over at least four years. Investigators say participants in the conspiracy would meet behind a Fishers horse barn to set prices.

Denying liability

In court papers, Levin argues that the remaining defendants are in an untenable position of trying to avoid paying up despite the convictions and plea agreements in the criminal cases.

"The defendants sing the same tired song repeated by most conspiracy participants, claiming that few, if any, customers actually were harmed by their repeated agreements ... to fix prices," Levin said in a filing.

But the attorneys for the remaining defendants contend they are on solid legal footing, claiming the conspiracy did not result in the overcharging of customers. They say their expert testimony is at odds with the plaintiffs', and the court must resolve that "battle of the experts" before ruling on class certification.

"If plaintiffs truly hear in this 'the same old song,' it is the acoustic result of having their heads in the sand," G. Daniel Kelley Jr., an Ice Miller partner representing Irving Materials, said in a filing.

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