815 F.3d 43
1st Cir.2016Background
- Five nonunion steel-erector companies sued Local Union No. 7 (Local 7) alleging LMRA unfair-labor-practice violations and Sherman Act antitrust claims arising from Local 7's Market Recovery Program (MRP) and related conduct.
- The MRP (in the 2000–2006 CBA) collected deductions from union-signatory erectors and used "target money" to subsidize union bids on projects targeted as likely to draw nonunion competition.
- Plaintiffs alleged Local 7 used picketing, site pressure, and project alerts to coerce fabricators/general contractors to replace nonunion erectors (Ajax, DFM) with higher-priced union signatories on four focal projects.
- After an earlier remand (ASE I), plaintiffs tried LMRA claims at trial limited to four projects; the jury found for Ajax and DFM and awarded specified damages.
- The district court later granted summary judgment to Local 7 on the Sherman Act claims, concluding plaintiffs failed to show anticompetitive harm to the market; both sides appealed.
- The First Circuit affirmed: it upheld the LMRA jury verdict and damages and affirmed summary judgment for Local 7 on the antitrust claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| LMRA liability (§8(b)(4)) — did Local 7 coerce fabricators into agreements to stop doing business with plaintiffs? | Local 7 used coercion (picketing, threats, project alerts) to pressure fabricators to cancel subcontracts and hire union signatories, creating implied §8(e) agreements. | The fabricators/general contractors, not Local 7, made the choice; evidence is insufficient to show coercion sufficient to imply §8(e) agreements. | Affirmed jury verdict for plaintiffs: record supported reasonable inference that Local 7's pressure induced fabricators to oust plaintiffs on the four projects. |
| Damages under LMRA — were awards excessive or duplicative? | Plaintiffs seek lost profits and additional manpower costs (wages/inefficiencies) after displacement. | Damages are excessive, based on "lost man hours" fiction, and risk double recovery (profit included twice). | Affirmed award: jury's damages within permissible range; evidence supported additional manpower-cost theory and no clear double recovery. |
| Sherman Act §1 — group boycott / per se treatment? | Union and signatory contractors conspired (via MRP, project alerts, subsidies) to boycott nonunion erectors and foreclose market; seek per se or quick-look treatment. | Conduct is vertical or independent competitive responses; no horizontal agreement among fabricators, general contractors, or signatory erectors to warrant per se treatment. | Affirmed summary judgment for Local 7: plaintiffs failed to show horizontal concerted action required for per se boycott; evidence demonstrated independent, vertical, and limited project-specific conduct. |
| Sherman Act §2 / predatory pricing / monopolization | MRP subsidies and Davis–Bacon interactions permitted below-cost bidding/predation and threatened monopolization. | Plaintiffs offered insufficient, incoherent evidence of below-cost pricing or a plausible recoupment theory; burden rests with plaintiffs. | Affirmed: Section 2 claims failed for lack of coherent evidence and analysis; predatory-pricing theory inadequately developed and effectively waived. |
Key Cases Cited
- Am. Steel Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 536 F.3d 68 (1st Cir. 2008) (prior remand describing issues and limits of statutory labor exemption)
- Am. Needle, Inc. v. Nat'l Football League, 560 U.S. 183 (2010) (Section 1 requires concerted action; distinguishes horizontal vs vertical restraints)
- NYNEX Corp. v. Discon, Inc., 525 U.S. 128 (1998) (per se rule in boycott context limited to horizontal agreements among competitors)
- Connell Constr. Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616 (1975) (nonstatutory labor exemption and circumstances where union-employer agreements may give rise to antitrust claims)
- Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993) (elements for predatory-pricing claim: below-cost pricing and dangerous probability of recoupment)
- Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield of R.I., 373 F.3d 57 (1st Cir. 2004) (rule-of-reason framework and burden for showing anticompetitive effects)
- Euromodas, Inc. v. Zanella, Ltd., 368 F.3d 11 (1st Cir. 2004) (requirement that plaintiffs show prima facie concerted action to defeat summary judgment)
- Trigano v. Bain & Co., Inc., 380 F.3d 22 (1st Cir. 2004) (standard for overturning jury verdict; verdict must not rest on mere scintilla)