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From Antitrust Law Daily, January 26, 2015

Boiler supplier lacked standing to pursue bid rigging claims

By Greg Hammond, J.D.

An Illinois boiler supplier lacked standing to bring bid rigging claims against an engineering and construction firm under Indiana’s Antitrust Act. In granting dismissal of the antitrust claims, the federal district court in Hammond, Indiana determined that the supplier was not a bidder for a contract to replace boilers and a heating system at an Indiana high school (Illinois Mechanical Sales, LLC v. Stevens Engineers and Constructors, January 23, 2015, Simon, P.).

In June 2014, School City of Hammond (Hammond)—a municipal corporation that owns and operates public schools in Hammond, Indiana—published an advertisement for bids to replace the boilers and heating system at one of its high schools. Defendant Stevens Engineers and Constructors submitted the lowest overall bid at $824,999, and Hayes Mechanical submitted the third lowest bid at $974,493. Plaintiff Illinois Mechanical Sales, LLC (IMS) filed suit against Hammond and Stevens, alleging that Hammond colluded with Stevens to game the bidding process, in violation of Indiana’s Antitrust Act. Hammond was previously dismissed from the suit, and Stevens filed a motion to dismiss on October 2, 2014.

The crux of this case, according to the court, is antitrust standing. In bidding cases like this, losing bidders have standing to bring an antitrust claim. However, IMS was not a bidder. Despite arguments that Hayes’ bid was actually a joint bid with IMS, the court—in reviewing the mechanical bid forms—concluded that there was no indication that IMS partnered up with Hayes to bid on the Hammond project. IMS was never even mentioned in the document. Instead, the firm was merely a supplier that hoped to sell a boiler to the contractor that won the bidding for the project, but lost out to a company that was planning to use a different boiler. “In plain English, IMS is a boiler supplier. And suppliers in IMS’s position do not have standing to bring an antitrust claim,” the court concluded.

Stevens’ motion to dismiss was therefore granted. Its motion for sanctions, however, was denied. The court determined that although IMS was not a bidder and therefore did not have standing to pursue its claim against Stevens, IMS’s position was not completely groundless.

The case number is 2:14 CV 342 PPS.

Attorneys: Matthew F. Policastro (Fisher Kanaris PC) for Illinois Mechanical Sales, LLC. Daniel Anthony Richards (Weston Hurd LLP) for Stevens Engineers and Constructors

Companies: Illinois Mechanical Sales, LLC; Stevens Engineers and Constructors

MainStory: TopStory Antitrust IndianaNews

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