Yesterday, the U.S. Department of Justice announced that a federal grand jury in Savannah, Georgia, indicted a ready-mix concrete company and four individuals for fixing prices, rigging bids, and allocating customers and markets in violation of antitrust laws.

The indictment charges Evans Concrete, LLC; James Clayton Pedrick; Gregory Hall Melton; John “David” Melton; and Timothy “Bo” Strickland with conspiring to fix prices, rig bids, and allocate markets for the sale of ready-mix concrete used in residential, commercial, and public projects in Georgia and South Carolina. Pedrick is also charged with making false statements, and Strickland is charged with making false statements and perjury.

The criminal charges come after the filing of a related civil class action case for price fixing and bid rigging in November 2017. In that case, Pro Slab, Inc. et al. v. Argos USA, Inc. et al., pending in the U.S. District Court for the District of South Carolina, the Court appointed three law firms as interim co-lead counsel for a proposed class of direct purchasers of ready-mix concrete from the defendants: Cohen & Malad, LLP; Heins Mills & Olson, PLC; and Preti Flaherty Beliveau & Pachios LLP. Karon LLC also represents the plaintiffs.  

In September 2019, the Court denied the defendants’ motions to dismiss. Since then, the interim co-lead counsel have been actively taking discovery from defendants. The defendants are: Argos USA LLC; Argos Ready Mix LLC; Lafarge North America, Inc., Coastal Concrete Southeast II, Thomas Concrete, Inc.; Thomas Concrete of South Carolina, Inc.; Evans Concrete, LLC; Elite Concrete LLC; Troy D. Baird; and Hurley Cook, III aka Trey Cook. The Third Amended Complaint alleges that, during the class period, Gregory Melton and Pedrick were with Argos and Lafarge at various times, Strickland was with Evans, and David Melton, Baird, and Cook were with Elite. The proposed class consists of direct purchasers of ready-mix concrete from the defendants since January 1, 2010.

One of the interim co-lead counsel, Scott Gilchrist, said, “The criminal indictments allege a scheme that is familiar to us from our investigation. We think the grand jury’s indictment is an important step toward recovering overcharges for our class members.” Interim co-lead counsel Renae Steiner added, “Our case has been proceeding alongside the DOJ’s investigation for some time. Fortunately, despite the coronavirus pandemic, the Court has held regular telephonic status conferences to keep the civil case moving forward.” Another interim co-lead counsel, Greg Hansel said, “It’s important that antitrust violations like these be addressed in both the civil and criminal courts. While the DOJ prosecutes these indictments we will keep fighting on behalf of concrete customers to recover overcharges.”

In many antitrust cases, civil cases and criminal cases proceed in parallel fashion. In criminal cases, DOJ regularly seeks criminal penalties including incarceration and fines. In civil cases, class actions often recover damages allowed under the federal antitrust laws on behalf of direct purchasers. Under the Sherman Act, in appropriate cases, civil plaintiffs may recover three-times the overcharge due to a conspiracy to fix prices and rig bids. While in some cases the criminal case is announced first, here the civil case has been pending for nearly three years on behalf of the proposed class of victims.