## Facts

- Alabama municipalities and water authorities bought repackaged chlorine for drinking water, sewage treatment, and pools.
- Defendants were five sellers of repackaged chlorine in Alabama: Harcros Chemicals, Jones Chemicals, Van Waters & Rogers, PB & S Chemical, and Industrial Chemicals.
- Municipal purchases were often made through sealed bids or negotiated contracts; bid results were typically disclosed, allowing competitors to learn pricing.
- Plaintiffs alleged that from about 1984 to 1990 defendants agreed to fix prices, allocate customers/markets, and rig bids for municipal chlorine contracts.
- Plaintiffs sought treble damages and injunctive relief under federal and state antitrust law and pursued Alabama-law fraud claims based on alleged misrepresentations or concealment of collusion.
- Plaintiffs relied largely on (1) economic/statistical expert analyses of bidding and pricing patterns, (2) a declaration and testimony reporting alleged collusive statements, and (3) market-structure evidence describing an oligopolistic, transparent bidding environment.
- Defendants moved for summary judgment and to exclude plaintiffs’ expert opinions and hearsay evidence, including a declaration by Barbara Krysti.

## Issues

1. Whether plaintiffs produced admissible evidence permitting a reasonable inference of an agreement to fix prices, allocate markets, or rig bids in violation of Sherman Act § 1 and analogous state antitrust law, rather than independent conduct in an oligopoly.
2. Whether plaintiffs’ economic/statistical expert opinions were admissible under Federal Rule of Evidence 702 reliability standards.
3. Whether hearsay statements offered through declarations and testimony were admissible under the Federal Rules of Evidence.
4. Whether the remaining admissible evidence was sufficient to support Alabama-law fraud claims tied to alleged concealment or misrepresentation of collusive conduct.

## Decision

- The court excluded substantial portions of plaintiffs’ expert testimony as unreliable under Rule 702 standards.
- The court struck the Krysti declaration and excluded related hearsay statements as inadmissible.
- After these evidentiary rulings, the court granted summary judgment to all defendants on federal and state antitrust claims, holding that the remaining evidence did not permit a reasonable inference of an unlawful agreement.
- The court also granted summary judgment to defendants on the Alabama fraud claims due to insufficient evidentiary support once the conspiracy theory lacked triable proof.

## Legal Principles

- A Sherman Act § 1 claim requires evidence of an agreement; parallel pricing or bidding, standing alone, is insufficient, especially in an oligopoly.
- To infer conspiracy from circumstantial evidence, plaintiffs must present evidence that tends to exclude the possibility of independent action (often described as “plus factors” beyond conscious parallelism).
- Expert testimony is admissible only if it is based on reliable methods and will assist the trier of fact; courts may exclude opinions that lack methodological support or do not reliably distinguish lawful interdependent conduct from collusion.
- Out-of-court statements offered for their truth are inadmissible unless a hearsay exception or a valid non-hearsay theory applies; party-opponent admissions require an adequate foundation regarding the speaker and scope of authority.
- Fraud claims premised on concealed collusion fail absent sufficient evidence that the collusive scheme occurred and that actionable misrepresentation or concealment can be proven.

## Conclusion

The court excluded plaintiffs’ central expert analyses and key hearsay evidence, then held that the remaining proof showed, at most, parallel conduct consistent with lawful behavior in a concentrated, price-transparent market; it therefore entered summary judgment for defendants on both the antitrust and fraud claims.


City of Tuscaloosa v. Harcros Chems., Inc., 877 F. Supp. 1504 (N.D. Ala. 1995)