## Facts

- Thirty-nine Alabama municipal entities bought repackaged chlorine for drinking-water, sewage, and pool treatment.
- Five chemical companies purchased bulk chlorine, repackaged it into smaller containers, and sold it to the municipalities primarily through sealed-bid or negotiated contracts.
- Bid and contract pricing was publicly disclosed, allowing competitors to observe each other’s prices in a market with few sellers and repeated bidding.
- The municipalities alleged that from about 1984 to 1990 the sellers conspired to fix prices, allocate customers/territories, and rig bids for municipal contracts, violating federal and Alabama antitrust law.
- Plaintiffs relied largely on circumstantial proof (“plus factors”) such as parallel bidding/pricing, alleged interfirm communications, and market structure conducive to coordination.
- Plaintiffs offered expert testimony: an economist opined the outcomes fit collusion more than competition; a statistician used econometric modeling to estimate overcharges attributable to the alleged conspiracy.
- Plaintiffs also asserted Alabama fraud claims based on alleged misrepresentations or concealment connected to bidding and contracting.

## Issues

1. Whether the district court abused its discretion under Rule 702 and *Daubert* by excluding substantial portions of plaintiffs’ economic and statistical expert testimony.
2. Whether the district court incorrectly excluded portions of the non-expert record as hearsay, including evidence potentially admissible as party-opponent or co-conspirator statements.
3. Whether, on the properly admissible record, plaintiffs produced sufficient evidence for a reasonable jury to find an agreement violating Sherman Act § 1 (and parallel state antitrust claims).
4. Whether summary judgment was properly granted on Alabama fraud claims given the evidence and state-law elements.

## Decision

- Affirmed in part and reversed in part the evidentiary rulings; the district court applied an overly rigid approach in excluding key portions of the statistical and other evidence.
- Reversed summary judgment on the antitrust claims as to three defendants because admissible circumstantial and expert evidence created a triable issue on agreement.
- Affirmed summary judgment on the antitrust claims as to two defendants because the evidence remained insufficient to infer their participation in an unlawful agreement.
- Vacated summary judgment on most fraud claims and remanded for further proceedings, requiring a more targeted analysis under Alabama law.

## Legal Principles

- Rule 702/*Daubert* review is flexible and case-specific; exclusion of expert testimony is improper where recognized economic or statistical methods are reliably applied and can assist the factfinder.
- Antitrust agreements may be proven through circumstantial evidence, including economic and statistical proof; plaintiffs are not limited to direct documentary or eyewitness evidence.
- Mere parallel conduct in an oligopoly, without more, does not establish a Sherman Act § 1 agreement; parallelism combined with “plus factors” can permit an inference of conspiracy.
- In conspiracy litigation, some statements may be admissible as party-opponent admissions or co-conspirator statements, and categorical hearsay exclusions can improperly remove probative evidence.
- State-law fraud claims based on contracting and bidding practices require element-by-element analysis; alleged collusion-related misrepresentations or suppression may support fraud liability if the required elements are shown.

## Conclusion

The Eleventh Circuit held that the district court excluded too much probative expert and related evidence and, after correcting those errors, concluded that the municipalities raised a genuine fact issue of antitrust conspiracy against three defendants (but not two), while also reviving most fraud claims for further proceedings on remand.


City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548 (11th Cir. 1998)