Steel Rebar Maker Commercial Metals Must Face Rival's Antitrust Lawsuit

SEATTLE (Scrap Monster):  Steel rebar giant Commercial Metals must face an antitrust lawsuit that accuses it of sidelining a potential competitor by frustrating its efforts to build a mill in Southern California, driving up rebar prices.

In a ruling, unsealed on Friday, U.S. District Judge Haywood Gilliam Jr. in Oakland, California, denied a request from Commercial Metals for summary judgment in the 2020 lawsuit from plaintiff Pacific Steel.

Gilliam’s order, which also denied Pacific Steel's summary judgment request, sets the case on course for a trial later this month. Pacific Steel has alleged that Commercial Metals' conduct caused rebar purchasers to overpay by $50 million a year.

Irving, Texas-based Commercial Metals and San Diego-based Pacific Steel did not immediately respond to requests for comment on Monday.

Commercial Metals has denied any wrongdoing.

Steel reinforcing bar, or “rebar,” is a key material in the construction industry that is used to strengthen concrete. Commercial Metals, a top U.S. manufacturer, recorded net earnings in fiscal year 2023 of nearly $860 million.

Pacific Steel, founded in 2014, said it had an agreement with another company, Danieli Corp, to open a type of rebar mill in Southern California that would have served most of California and parts of Arizona, Nevada and Utah.

The lawsuit alleged Commercial Metals convinced Danieli not to do business with Pacific Steel, and the project was delayed. Danieli is not a defendant in the lawsuit.

Pacific Steel said Commercial Metals’ agreement with Danieli amounted to the “exclusion of a substantial, lower-cost competitor” from setting up a mill.

Commercial Metals said in a filing that its agreement with Danieli “addressed only one of many available options for producing rebar.”

Pacific Steel and Commercial Metals told the judge last month that they were “not optimistic" about settling the case before trial.

The case is Pacific Steel Group v. Commercial Metals Co, U.S. District Court for the Northern District of California, No. 4:20-cv-07683.

For Pacific Steel: Benjamin Brown of Cohen Milstein Sellers & Toll; and Christopher Wheeler of Farella Braun + Martel

For Commercial Metals: Steve Bizar of Dechert; and Bonnie Lau of Morrison & Foerster

Courtesy: www.reuters.com