Opinion ID: 550874
Heading Depth: 1
Heading Rank: 5

Heading: MacRITCHIE MATERIALS, INC. CLAIM

Text: 77 The plaintiffs' amended complaint sets out that MacRitchie has offices in West Millgrove where it operates a limestone quarry which supplies stone and sand to Langenderfer, NOAP and other asphalt producers. Members of the MacRitchie family are principal shareholders of Langenderfer, NOAP, and MacRitchie. Plaintiffs' exhibit 1 shows its quarry, and the adjacent asphalt plant operated by Langenderfer or NOAP. MacRitchie's claim was not considered in the first trial pursued by Langenderfer and NOAP. Defendants never bought stone or sand from MacRitchie, which claims injury and loss by reason of defendants' claimed monopolistic practices, which caused it to lose business and sales to related plaintiffs and others. 78 Defendants assert that they do not possess monopoly power in limestone as a matter of law because of their market share of stone in the thirteen-county market. They also respond to MacRitchie's claim by contending that it is a claim of indirect and remote injury not caused by its conduct, even if that conduct were deemed to be anticompetitive. Finally, defendants assert that MacRitchie's claim is speculative and unsupported by the testimony. 79 We note at the outset that the MacRitchie quarry is situated nearer, or as near, to southeastern Wood County, to Seneca County, to Wyandot County, to eastern Hancock County, and to southern Sandusky County, than any of defendants' quarries. The entire southeast quarter of the thirteen-county area is better served by MacRitchie's quarry, or by independent stone producers including France, the largest limestone operation in the entire relevant market claimed by plaintiffs, than by defendants' quarries. Defendants' nearest operating quarry, at Portage, also in Wood County, was located about ten miles northwest of MacRitchie's West Millgrove quarry. From 1971 through 1975, Portage had the highest comparative quarry costs of all of defendants' quarries, and only defendants' Rocky Ridge quarry exceeded its costs in 1976. Portage's average cost of stone was the highest of defendants' quarries analyzed by plaintiffs from 1982 to 1985. 17 Consistently throughout the 1981 to 1985 period, Portage and Rocky Ridge, defendants' nearest quarries to MacRitchie's, had the lowest gross margins of profit of defendants' quarries analyzed by plaintiffs, measured by the difference between average price and cost per ton. Defendants suffered by far their lowest operating income (measured by percent of pretax income from their quarry operations) from 1980 through 1982. Defendants' after-tax return on net worth based on stone operations was considerably reduced from 1980 through 1983, but returned to more normal levels in 1984 and 1985. MacRitchie, then, had every opportunity to be competitive with defendants in its quarry and limestone operations. 80 It is evident from the analysis of this data that defendants' quarry at Portage, the one which serves as the nearest competitor to MacRitchie's quarry, has relatively high costs of production and is less profitable than other quarries operated by defendants. It is also evident that MacRitchie's geographic location is superior to that of any of defendants' quarries in much of the southeast quadrant of the relevant market area. There are a number of highway asphalt pavement competitors located within twenty or twenty-five miles of MacRitchie's quarry. 81 An examination of limestone production of defendants and others within the thirteen-county relevant market area, including MacRitchie, from 1979 to 1986 was made by plaintiffs (exhibit 21A) and indicates as follows (in millions of tons): 82 DEFENDANTS 1979 1980 1981 1982 1983 1984 1985 TOTAL Defendants 2.116 2.310 1.592 1.384 .982 1.136 1.159 10.679 France 3.515 2.849 2.164 1.502 2.513 2.334 2.602 17.479 Nat'l Lime 1.033 .857 .734 .739 .719 .899 1.076 6.057 Basic .349 .305 .156 .157 .063 -- -- 1.030 DEFENDANTS 1979 1980 1981 1982 1983 1984 1985 TOTAL MacRitchie .187 .232 .103 .111 .159 .126 .172 1.090 Others 2.222 1.702 1.301 .836 1.647 1.094 1.205 9.007 ------ ----- ----- ----- ----- ----- ----- ------ 13 County Total: 9.422 8.255 6.050 4.729 5.083 5.589 6.224 45.342 Mich. Stone .815 .566 .295 .277 .448 .582 .362 3.345 ------ ----- ----- ----- ----- ----- ----- ------ TOTAL: 10.237 8.821 6.345 5.006 5.531 6.171 6.576 48.687 Plaintiffs' exhibit 21A. 83 Michigan Stone is located outside the thirteen-county area in Michigan. Plaintiffs assert that because much of its production goes into the thirteen-county relevant market area, it should be considered as defendants' facility within the area. The percentage of road material furnished to the total market by defendants, by France, and by others (including MacRitchie) is reflected below. The figures in parentheses are arrived at by computing Michigan Stone's production into defendants' (and the market's) total: 84 YEAR: DEFENDANTS: FRANCE: OTHERS : 1979 22.5% (28.6%) 37.3% (34.3%) 40.2% 1980 28.0% (32.6%) 34.5% (32.3%) 37.5% 1981 26.3% (29.7%) 35.8% (34.1%) 37.9% 1982 29.3% (33.2%) 31.8% (30.0%) 39.0% 1983 19.3% (25.9%) 49.4% (45.4%) 31.2% 1984 20.3% (27.8%) 41.8% (37.8%) 37.9% 1985 18.7% (23.1%) 41.9% (39.6%) 39.5% Avg. 7 yrs. 23.6% (28.8%) 38.5% (35.9%) 38.0%