December 11, 2018
Appeal from the District Court of the Virgin Islands (Civil
Action No. 3-15-cv-00004) District Judge: Honorable Curtis V.
Christopher A. Kroblin [Argued] Kellerhals Ferguson Kroblin
Attorney for Appellant
Feller [Argued] Nicholas J. Giles Casey E. Lucier
McGuireWoods Attorneys for Appellee
Before: CHAGARES, HARDIMAN, and RESTREPO, Circuit Judges.
HARDIMAN, CIRCUIT JUDGE.
appeal stems from a dispute over the sale of ready-mix
concrete in the U.S. Virgin Islands. Appellant Spartan
Concrete Products, LLC, which operated on St. Croix, sought
to displace a company called Heavy Materials as the sole
provider of ready-mix concrete on St. Thomas. Upon entering
the St. Thomas market, Spartan started a price war with Heavy
Materials that caused financial losses to Spartan while Heavy
Materials retained its dominant position. After three years
of fierce competition, the companies reached a truce by which
they went their separate ways with Spartan agreeing to sell
on St. Croix while Heavy Materials would keep selling on St.
the truce, Spartan brought this lawsuit against Appellee
Argos USVI, Corp., a bulk cement vendor. The crux of
Spartan's case is that Argos, which supplied the cement
necessary to make the ready-mix concrete, violated §
2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a), by
giving Heavy Materials a 10 percent volume discount during
the price war. Spartan claimed Argos caused its losses and
eventual departure from St. Thomas by offering the discount
to Heavy Materials alone. The District Court disagreed and,
following a bench trial, entered judgment for Argos because
Spartan failed to prove it suffered antitrust injury. The
Court also denied Spartan leave to amend its complaint to
include two tort claims, finding undue delay and prejudice.
Because Spartan failed to establish antitrust injury, and the
District Court did not abuse its discretion in denying leave
to amend, we will affirm both orders.
relevant facts begin in 2010, when Spartan expanded its
ready-mix concrete sales from St. Croix to St. Thomas and St.
John. For the next three years, Spartan competed fiercely
with Heavy Materials-the only other seller of ready-mix
concrete on St. Thomas.
was the only vendor of bulk cement on St. Thomas during this
period of competition between Spartan and Heavy Materials.
Argos sold cement to both companies, but gave Heavy
Materials-which accounted for, on average, 77 to 80 percent
of Argos's bulk sales between 2010 and 2013- a 10 percent
volume discount. Spartan claims that this discount gave Heavy
Materials such a competitive advantage on St. Thomas that
Spartan had to cease operations there.
frequently reduced its prices to compete with Heavy
Materials, which precipitated a price war between the two
companies. As a result, Spartan's market share on St.
Thomas rose to nearly 30 percent by the end of 2011.
Spartan's former minority owner and operations manager,
Rodgers Bressi, testified that Spartan started the price war
with the goal of obtaining a monopoly on St. Thomas and/or
St. Croix. Warren Mosler, Spartan's majority owner,
planned for Spartan to incur short-term harm during the price
war and "eventually recoup its losses." App.
633-34. Bressi also testified that Mosler wanted to pressure
Heavy Materials to sell its business to Spartan. The owner of
Heavy Materials, Doug Gurlea, testified that a pattern
emerged: each time Spartan would broach "[t]he subject
of purchasing [Heavy Materials's] concrete
operations" and Heavy Materials declined the overtures,
"[t]here would be, within days, a price decrease that .
. . Spartan would initiate." App. 722.
few years, the price war became unsustainable, so Spartan and
Heavy Materials struck a deal. In December 2013, they agreed
that Spartan would withdraw from St. Thomas and Heavy
Materials would stop competing on St. Croix. This arrangement
was memorialized in two documents: (1) an assignment of
Spartan's lease to Heavy Materials for a concrete plant
on St. Thomas; and (2) a requirements supply agreement under
which Spartan would purchase all of the aggregate needed to
produce concrete on St. Croix from Heavy Materials, which in
turn agreed "not to supply ready-mix concrete on the
island of St. Croix." App. 847. So as of December 2013,
each company had a monopoly on one of the islands.
incurred significant losses during the price war with Heavy
Materials. Spartan's management consultant, Michael Pede,
estimated that the company's total losses during its
three years of operation on St. Thomas were $3, 807, 587.95.
Spartan argues that Argos's discount to Heavy Materials
made Spartan uncompetitive on St. Thomas. During the three
years of competition, cement costs accounted for 12.8 percent
of Spartan's $13.2 million in costs. Because it did not
receive the 10 percent discount given to Heavy Materials,
Spartan incurred an additional $181, 429, representing 1.4
percent of its total costs. Pede admitted that Spartan
reduced its costs in several categories, such as labor, other
materials, and transportation, by 5 percent. During the
competitive period, Spartan also wrote off more than $345,
000 in bad debts from customers.
January 2015, about a year after its truce with Heavy
Materials, Spartan sued Argos for engaging in price
discrimination in violation of § 2(a) of the
Robinson-Patman Act, 15 U.S.C. § 13(a). Spartan
Concrete Prods., LLC v. Argos USVI, Corp., 2017 WL
2462824, at *1 (D.V.I. June 7, 2017).
and Spartan appeared before Magistrate Judge Ruth Miller for
a pretrial conference in April 2015. Judge Miller ordered the
parties to propound written discovery by the end of May with
initial written discovery to be completed by the beginning of
October that same year. But over the next several months, the
parties repeatedly missed Judge Miller's deadlines for
conducting initial discovery. In December 2015, Judge Miller
ordered the parties to submit a joint proposed discovery
schedule the next month. The parties also missed this
deadline and did not comply until February 2016. Judge Miller
then entered a trial management order stating in part that
all written discovery would be responded to by the end of ...