Dodge Data, isqft square off in federal antitrust suit

Dodge Data, Isqft Square Off In Federal Antitrust SuiT

by ROB McMANAMY | Nov 12, 2015

From the Bible and Darwin to Shakespeare and The Lion King, the story of young cubs angling to take down the aging patriarch is as familiar on stage and screen as it is in corner offices and courtrooms.

Now, that time-honored scenario is playing out yet again in U.S. District Court in Cincinnati OH, where industry veteran Dodge Data & Analytics last month filed a federal lawsuit against its much younger, recently merged rivals, iSqFt Inc., CMD Group, Construction Data Corp., and BidClerk Inc. The 49-page complaint, filed Oct 28, alleges numerous violations of the Sherman Antitrust Act in multiple venues, and seeks both injunctive relief and treble compensatory damages for supposed anti-competitive practices that include trademark infringement, conspiracy, intent to form a monopoly, theft of proprietary project information, predatory pricing, and more. Taken together, the "various illegal and anticompetitive acts" represent "a concerted and all-out assault on Dodge... specifically designed to damage Dodge," the document states. The plaintiff also has asked the court for a jury trial.

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In preparing this article, BuiltWorlds made repeated attempts via telephone, e-mail and even social media to contact primary defendant iSqFt. But the Cincinnati-based project data supplier and provider of online preconstruction management services so far has not responded. On Aug 28, however, attorneys for iSqFt/CMD did send Dodge a letter that was included in the most recent court filing. It claimed that several current iSqFt/CMD sales had been actively recruited for employment by Dodge and reminded Dodge that such employees, even if they were to accept new offers of employment, would still be bound by restrictive covenants that prohibit the disclosure of proprietary sales information.

For its part, Dodge also asked the federal court in Ohio for a declaratory judgment finding those restrictive covenants to be "unenforceable" against its new hires. On that note, Dodge also alleges that two of its own former sales executives had stolen "highly prized and closely guarded detailed customer information representing $120 million in Dodge’s business" and taken that information with them to new jobs at CMD prior to 2009. That was the year when CMD and Dodge's longtime former owner, McGraw-Hill, had first traded lawsuits alleging, among other things, that employees had posed as fake customers of the other to obtain sensitive information.

CMD's claim was "largely dismissed", but is still on appeal, the document says. Meanwhile, McGraw-Hill agreed to drop its claim when it was acquired in November 2014 by Symphony Technology Group, a private equity firm based in Palo Alto CA. Even so, Dodge has resurrected some of those prior claims as further supporting evidence in its current suit.

"Very messy," says one industry insider familiar with the case. "Who knows who's telling the truth?" Indeed, that's what the courts are for.

In the meantime, it will certainly be fascinating to see how this case plays out between two parties that may each own as much as 50% of the market, depending on how it's measured. And this compelling drama will play out against a backdrop of enormous industry change, tweaked daily by wave after wave of new technology, as well as an ongoing explosion of available information known as 'Big Data'. And there is more than a little history involved.

rivals in the making

Dodge, itself, dates back to 1891, when it was started in Boston by Frederick Warren Dodge, who had the novel idea of "running handwritten reports on construction projects -- organized by area, class of structure, and building progress -- to a small group of subscribers". In 1893, he moved the business to New York City, where his attempts to sell information beyond local markets were initially dismissed as unnecessary. ("Why would a contractor in Manhattan care if they're building a new road in Philadelphia?")  But then the idea caught on after a national economic panic in 1900 and contractors were eager for work wherever the heck they could find it. In 1961, F.W. Dodge was acquired by McGraw-Hill, which leveraged the wealth of project data into a national market analyst and economic forecasting engine still operating today. In fact, on the same day as the court filing, Dodge Data & Analytics released its latest annual industry forecast for 2016. (It's a good one.) 

On the other side of the litigation, iSqFt can trace its roots back to 1993, when it was founded in Ohio as  Construction Software Technologies Inc. According to the firm's website history, its initial focus was on the development of takeoff and estimating software for the commercial roofing and sheet metal industry. By 2000, its focus had expanded and the emergence of the Internet caused the company to rethink and redefine its market and strategy. Among the changes was a new name: iSqFt. 

In the ensuing decade, having secured significant investment backing, iSqFt went on a buying spree that has yet to subside. In that time, it has grown exponentially and geographically through the acquisition of industry players such as BuildPoint, USProjects, BidFax, Bid News Construction Reports, and over the last two years, rivals BidClerk, Construction Data Corp., and now CMD, which Dodge has long viewed as its primary national competitor. In fact, according to the Dodge suit, iSqFt even had attempted to acquire Dodge, itself, when McGraw-Hill had put the property on the market in 2014.

Yes, high drama with a revolving cast of players. And now for some, the stakes just got higher.

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For more on the suit, itself, access the court document here.