Overview
On November 5, 2024, after two-week jury trial, a federal jury issued a $110 million verdict against Commercial Metals Company, a multi-national steel conglomerate and the nation’s largest manufacturer and fabricator of steel rebar, for conspiring to block the entry of Pacific Steel Group from entering the Southern California rebar market.
The lawsuit, brought on behalf of Pacific Steel Group, a steel rebar fabricator located in San Diego, California, sought damages and injunctive relief against Commercial Metals Company for violations of federal and state antitrust laws.
Case Background
Pacific Steel Group (PSG) was founded in 2014 as a fabricator and installer of rebar in California.
On October 30, 2020, PSG filed an antitrust lawsuit against Commercial Metals Company (CMC), a multi-national steel conglomerate and the nation’s largest manufacturer and fabricator of steel rebar, in Northern California federal court, asserting that CMC contracted with Danieli Corporation to prevent PSG from building a Danieli micro mill to begin manufacturing its own rebar.
As alleged, PSG’s more efficient operations enabled it to win bids against CMC and grow, until, in 2019, it decided to become an even more efficient competitor by building its own steel rebar mill. Such vertical integration had major cost-saving advantages for PSG but would have created competition for CMC in the local rebar manufacturing market that CMC currently dominates, the complaint alleges. The only commercially viable way for PSG to manufacture rebar was to build a state-of-the-art, environmentally friendly micro mill in Southern California, according to the complaint. Micro mills are the most efficient rebar manufacturing mills in the world, and Danieli is the only company that has built them.
The complaint further alleged that when CMC learned of PSG’s plans, it had been planning to build a new Danieli micro mill in Mesa, Arizona, and secured Danieli’s agreement not to build another micro mill for any CMC competitor within a 500-mile radius of Rancho Cucamonga, California for 69 months. This agreement effectively blocked PSG and other potential competitors from manufacturing rebar for years.
Operative case name and new case number: Pacific Steel Group v. Commercial Metals Company, et al., Case No. 4:20-cv-07683-HSG, United States District Court for the Northern District of California