On July 16, the 11th Circuit in Gulf States Reorganization Group, Inc. v. Nucor Corp. affirmed an award of summary judgment in favor of steel producer Nucor Corporation in a heated battle over market definition in the context of steel products. The 11th Circuit found that the cross-elasticity of supply for certain steel products defeated the limited product market alleged by the plaintiff. The dispute arose when Gulf States Reorganization Group (GSRG) sued Nucor, a leading manufacturer of black hot rolled coil steel, alleging that Nucor had attempted to monopolize the market for black hot rolled coil steel in the Southeastern United States. Specifically, GSRG alleged that Nucor and the other defendants contracted to purchase the assets of a bankrupt entity to block competition in the black hot rolled coil steel market.

Key to the 11th Circuit’s opinion affirming summary judgment in favor of defendant Nucor was the alleged relevant product market—specifically, the failure of the alleged market to account for an alternative to black hot rolled coil steel, pickled and oiled steel, and the fact that manufacturers of one product could easily switch from production of one to the next. The 11th Circuit emphasized this distinction, stating that “one way to decide if producers or manufacturers can take away from a monopolist... is to analyze the concept of cross-elasticity of supply, which ‘looks at competition from the production end instead of the consumer end.’” Applying the concept to the facts at hand, the 11th Circuit noted that because of the similarities between the two steel products, a potential monopolist of the black hot rolled coil steel market would be thwarted by manufacturers in the pickled and oiled steel market. Consequently, the limited alleged market definition of black hot rolled coil steel was too restrictive and ignored the “actual or potential” economic realities.