Lackadaisical Discovery And Vague Allegations Cancel Flight Of Oil Helicopter Conspiracy Case

A combination of a failure to pursue discovery and vague allegations have led  Judge Legrome D. Davis of the U.S. District Court for the District of Delaware to grant summary judgment, dismissing price-fixing claims in Superior Offshore Int’l, Inc. v. Bristow Group Inc.. 

Plaintiff Superior Offshore is a purchaser of helicopter services to offshore oil and gas sites.  Defendants Era Helicopters, LLC, Era Group Inc., Era Aviation, Inc., Bristow Group, Inc., PHI, Inc., and Seacor Holdings Inc., provide the helicopter services.  On behalf of all purchasers of defendants’ helicopter services from 2001 to 2005, Superior alleged that defendants had illegally agreed to fix prices in per se violation of Section 1 of the Sherman Act.

Superior’s original complaint was dismissed last year on the ground that Superior had alleged only parallel pricing that did not “justif[y] an inference of conspiracy or state[] a plausible claim of price-fixing.”  Although Superior had failed to conduct discovery, it sought leave to file an amended complaint based on “newly discovered evidence.”  The court permitted Superior to file an amended complaint based on three new paragraphs that alleged that in early 2001, a Bristow sales manager “believed he overheard” a conversation between a Bristow sales VP and competitor PHI’s sales manager in which the two men agreed to a major price increase and noted that the Era defendants had also agreed to the increase.   

Judge Davis, however, limited discovery to the allegations in the three new paragraphs.  Specifically, he allowed depositions of only the four individuals involved in or the subject of the alleged overheard conversation, and he permitted the parties to request additional discovery relating only to the new allegations.  Superior ultimately deposed only two of the four permitted witnesses  

Judge Davis granted defendants summary judgment because the sales manager’s testimony about the sole disputed fact in the case – the conversation he allegedly overheard – failed to create a genuine issue of fact.  He could not recall what was actually said, who said it, or whether he heard the entire conversation.  He was also “mistaken in his surmise as to who was on the other side of the conversation” and “who purportedly authorized” the VP he overheard to make the alleged statements.  Thus the manager’s “testimony provide[d] only his personal feelings, beliefs and speculation about the content of the conversation,” which was not enough to withstand summary judgment.

Superior’s cross-motion for additional discovery was denied because Judge Davis saw no reason such discovery would be fruitful.  Superior had identified only “hopes” and “beliefs” about what additional discovery might show, which was “insufficient to establish a cognizable need for additional discovery.”  Further, Judge Davis noted that although “[d]efendants’ motion to dismiss . . . did not prevent Plaintiff from proceeding with discovery [and] put Plaintiff on notice of shortcomings in its proof . . . Plaintiff did not initiate discovery to support its allegations with facts.”  In other words, plaintiff’s its discovery was too little too late.

Finally, Judge Davis found Superior’s broad, 11th-hour request to be a desperate fishing expedition: “The discovery net is cast wide because the foundation for the requests is purely speculative.  No facts have been presented that suggest further discovery would remedy [the sales manager’s] conjecture and speculation.”

The moral of this story is directed to plaintiffs:  Begin discovery early, and get as much as you can while you can get it.  Unfortunately, Superior Offshore learned this lesson the hard way.