ICP Asks Panel to Revive Antitrust Claims Against 3 Cat Dealers

Jordanne Waldschmidt Headshot
Updated Dec 21, 2022
Cat 320 electric excavator dumping dirt
Caterpillar

International Construction Products (ICP), a now-defunct marketing and sales partner for Chinese construction equipment manufacturers, has asked an 11th Circuit panel to revive a September 2018 lawsuit filed against a trio of Caterpillar dealers, according to a December 13 report from Courthouse News Service.

The suit alleges that Ring Power, Thompson Tractor and Ziegler worked together to limit competition from Chinese manufacturers in the North American market. Specifically, that the dealers threatened to withhold their equipment from the online marketplace IronPlanet unless IronPlanet terminated its relationship with ICP.

ICP launched in 2014, with an announcement at the ConExpo-Con/Agg trade show, as a way to market value-priced, Chinese-made machines to North American customers. The company was led by Tim Frank, the former president of Chinese equipment manufacturer Sany’s U.S. operation, and Wes Lee, who was with Volvo CE prior to joining ICP. Lonking was the first manufacturer to sign with ICP to distribute its excavators, wheel loaders, dozers and rollers.

Shortly after its launch, ICP hit a fatal snag when IronPlanet pulled out of its plans to provide the online distribution platform. ICP then sued Caterpillar, Volvo and Komatsu, minority owners of IronPlanet, for antitrust, a suit that a federal judge threw out of court in January 2016.

On December 13, an attorney for ICP told the appeals court that IronPlanet “acquiesced to the threats” and ended its March 2014 agreement with his client after just one month, according to Courthouse News Service.

ICP is arguing that “a Florida federal judge unfairly ruled in favor of the dealers last year and required that evidence of their involvement in the alleged conspiracy had to be unambiguous.”

U.S. District Judge T. Kent Wetherell presided over the case and found that “no reasonable jury could find the dealers entered into an agreement to exclude ICP as a potential competitor and to pressure IronPlanet into cutting its relationship with the distributor short.”

Meanwhile, IronPlanet said it canceled the deal with the Chinese equipment distributor because the partnership had generated only one sale, according to court documents.

“The district court seems to require we either have smoking gun evidence of the conspiracy or evidence that the defendants engaged in parallel conduct. In fact, what we really have here is both,” said attorney Kannon Shanmugam of Paul Weiss Rifkind Wharton & Garrison, arguing on behalf of ICP. “I think it’s pretty clear from the case law that where defendants share the same ends, they don’t have to use the same means.”

Shanmugam pointed to circumstantial evidence of Frank Fowler, an executive for Ring Power, making numerous phone calls to other dealers in the days and hours leading up to IronPlanet removing ICP from its platform. Ring Power was a minority shareholder of IronPlanet, according to Wetherell’s order.

In his ruling, Wetherell acknowledged the frequency of communication and friendly relationship between the dealers and IronPlanet, saying that the interactions “do not contain any express or implied threats and … amount to nothing more than mere inquiries and expressions of concern about the impact of IronPlanet’s deal with Plaintiff on the heavy construction equipment industry.”

Echoing that sentiment, Gerald Giurato of Murphy & Anderson, an attorney representing Ring Power, told the panel of 11th Circuit judges that “Fowler and Mr. Owens talked regularly,” Giurato said. “Ring Power was an investor in IronPlanet… There were 74 investors in IronPlanet. They were interested in what was happening at the time; they wanted to know what was happening with their investment.”

An attorney for Thompson Tractor Co., Jeremy Heep of Troutman Pepper, also told the panel that phone conversations between Thompson Tractor and Ring Power were merely part of a “pro-competitive business transaction.”

Senior U.S. District Judge Harvey Schlesinger, U.S. Circuit Judge Elizabeth Branch and U.S. Circuit Judge Britt Grant served on the panel. Because the nature of the calls between IronPlanet, Thompson Tractor and Ring Power were unknown, the judges questioned “whether the conversations were merely expressions of concern or evidence of a pressure campaign” and if it was ICP’s duty to establish what the calls were about.

Schlesinger said, “Just because there were calls doesn’t mean you can let a jury speculate on what the calls were about. What if the telephone calls were about, 'Are we going to play golf on Saturday?' Does that give enough for a jury to speculate that they were colluding?”

As further evidence, Schnmaugam referenced emails that Thompson Tractor sent to IronPlanet. According to the report, the email stated that an agreement to auction the dealer’s equipment would “remain in a holding pattern unless the auction site issued a statement regarding the deal with ICP.”

Branch asked Shanmugam how the phone calls and emails proved a “concerted action.” Shanmugam stated that a jury should decide whether the evidence shows coordination.