NEW YORK Nucor Corp. did not violate antitrust laws by bidding on assets of a bankrupt competitor 11 years ago, a U.S. appeals court has ruled.
Gulf States Reorganization Group Inc. (GSRG), a then-newly formed company that wanted to enter the hot-rolled market by purchasing assets of bankrupt Gulf States Steel Corp., could not prove that Nucor was acting to be a monopoly player, the U.S. Court of Appeals for the 11th Circuit said this week.
The original litigation dates back to 2002, when GSRG sued Charlotte, N.C.-based Nucor shortly after Gadsden Industrial Park LLC, a corporation formed by Nucor and Casey Equipment Corp., won the assets of Gulf States Steel, according to court documents (amm.com, June 15, 2007). GSRG alleged that Nucor sold the assets overseas so it wouldnt have competition in the southeastern United States.
The appeals court had ruled in 2006 that GSRG sufficiently alleged injury and reversed the dismissal of its complaint by the U.S. District Court for Alabama. On remand, GSRG abandoned claims that Nucor was being a monopolist, according to appeals court documents. During discovery, Nucor requested and was granted summary judgment, which GSRG appealed.
"GSRGs proposed relevant product marketblack hot-rolled coil steeldid not account for the fact that manufacturers of pickled and oiled steel could, without much difficulty or cost, switch their production to that of black hot-rolled coil steel," the appeals court ruling said. "Therefore, the district court reasoned, GSRG did not define a proper product market."
The appeals court noted that if Nucor reduced supply in the hot-rolled coil market as a means to inflate prices, manufacturers of pickled and oil products could easily forgo the extra process to capitalize on the higher prices, which means Nucor could not obtain monopoly power in the Southeast.
A spokeswoman for Nucor, as well as representatives of Casey Equipment and GSRG, could not be reached for comment.