A Virginia federal court has refused to toss a proposed class action accusing some of the country's biggest warship-makers and naval engineering consultants of participating in an illegal conspiracy to suppress wages after the Fourth Circuit revived the case earlier this year.

U.S. District Judge Anthony J. Trenga issued an order Wednesday denying the remaining arguments for dismissal from the shipbuilders and consultants, which include General Dynamics, Huntington Ingalls Industries and CACI.

Judge Trenga initially tossed the antitrust claims on statute of limitations grounds, but a split Fourth Circuit panel revived the case in May.

The judge said in Wednesday's order that while the companies contend they have independent reasons for not poaching naval engineers from each other, the proposed class is offering anonymous witness statements about an alleged "gentleman's agreement," along with allegations about the "incestuous" nature of the industry.

"These arguments are substantial, but at the motion to dismiss stage this court is not permitted to 'weigh[] the competing inferences that can be drawn from the complaint,' and when considered in light of all the allegations in the complaint ... plaintiff has plausibly alleged sufficient 'plus' factors," the order said.

The judge said the engineers are offering statements from multiple witnesses about the companies not recruiting naval engineers from each other and said the witnesses either name each company as part of the conspiracy or discuss their policy of not recruiting workers from competitors.

The order said that without more, the alleged conspiracy could still amount to "conscious parallelism," especially since the alleged gentleman's agreement did not bar the companies from hiring a competitors' engineer who approached them unsolicited. The companies also argued that they can explain their parallel hiring practices, since they often work together on government projects.

But the judge said the claims can move ahead because the engineers are alleging that the "incestuous" nature of the "small, close-knit, geographically concentrated industry" makes the conspiracy more likely.

The judge pointed to allegations in the complaint that executives from the companies frequently interact and that specialized education, training, security clearance and citizenship requirements make the pool of naval engineers small and the cost of their replacement high.

The judge declined to determine what legal standard should apply to the claims at this stage. The order said there are too many factual issues surrounding the alleged gentleman's agreement to conclude whether it would be considered a per se violation or whether it would need to be analyzed under a full rule-of-reason analysis to weigh its potential benefits against any harm.

The order also rejected several individual dismissal bids from the shipmakers and consultants, who argued that even if a conspiracy was adequately alleged, their own participation was not established.

The judge accepted contentions that Thor Solutions, Marinette Marine, Bollinger, and Tridentis were allegedly tied to conspiracy directly based on witness testimony, which the order said the Fourth Circuit found strengthened the plausibility of the claims. The judge rejected arguments from Serco, CACI and General Dynamics based on changes in ownership and the amount of control the parent companies exerted over subsidiaries.

Naval engineer Susan Scharpf filed the proposed class action in 2023 in the Eastern District of Virginia, looking to represent naval architects and marine engineers who worked for the shipbuilding companies between Jan. 1, 2000, and the present.

In addition to several shipbuilding companies, the lawsuit also names a number of engineering consultants including Gibbs & Cox, Serco. Faststream Recruitment was named in the suit as well but has since settled and agreed to cooperate with the proposed class.

Judge Trenga initially dismissed the lawsuit in April 2024, finding that the claims fell outside the four-year statute of limitations because the alleged gentleman's agreement was supposed to have dated back to 2000. A split Fourth Circuit panel revived the case just over a year later, ruling that the engineers had sufficiently pled that the companies deliberately kept them and others in the dark regarding the agreement.

The shipbuilders still have a pending petition asking the U.S. Supreme Court to review that decision.

Representatives for the engineers and for Huntington Ingalls Industries declined to comment Monday. Representatives for the other companies did not immediately respond to requests for comment.

The plaintiffs are represented by Brent W. Johnson, Zachary R. Glubiak, Steven J. Toll, Robert W. Cobbs, Alison S. Deich and Sabrina S. Merold of Cohen Milstein Sellers & Toll PLLC, Shana E. Scarlett, Steve W. Berman and Elaine T. Byszewski of Hagens Berman Sobol Shapiro LLP, George F. Farah, Rebecca P. Chang, Nicholas Jackson and Simon Wiener of Handley Farah & Anderson PLLC, Candice J. Enders and Julia R. McGrath of Berger Montague and Brian D. Clark, Arielle S. Wagner and Stephen J. Teti of Lockridge Grindal Nauen PLLP.

Bath Iron Works Corp., Electric Boat Corp., General Dynamics Corp. and General Dynamics Information Technology Inc. are represented by David G. Barger of Greenberg Traurig LLP and Douglas E. Litvack, Matthew S. Hellman and Michael A. Doornweerd of Jenner & Block LLP.

Huntington Ingalls Industries Inc., HII Fleet Support Group LLC, HII Mission Technologies Corp., Ingalls Shipbuilding Inc. and Newport News Shipbuilding and Dry Dock Co. are represented by Adam Block Schwartz, Todd Stenerson and David Higbee of Allen Overy Shearman Sterling and Robbie Rogart Jost and Sima Namiri-Kalantari of Crowell & Moring LLP.

Bollinger Shipyards LLC is represented by Attison L. Barnes III, Scott M. McCaleb, Jon W. Burd, Daniel T. Park and Krystal B. Swendsboe of Wiley Rein LLP.

Gibbs & Cox Inc. is represented by Perry Lange, Jennifer Milici and John W. O'Toole of WilmerHale.

CACI International is represented by Christopher C. Brewer, Ryan P. Phair, Michael F. Murray and Craig Y. Lee of Paul Hastings LLP.

Marinette Marine Corp. is represented by John F. Terzaken III and Abram J. Ellis of Simpson Thacher & Bartlett LLP and Allison W. Reimann, Sean O'D. Bosack and Christie B. Carrino of Godfrey & Kahn SC.

Serco Inc. is represented by J. Brent Justus, Nicholas J. Giles, Joshua D. Wade, W. Cole Geddy, Benjamin L. Hatch and Casey Erin Lucier of McGuireWoods LLP.

The Columbia Group Inc. is represented by William T. DeVinney of Briglia Hundley PC.

Thor Solutions LLC is represented by Matthew J. MacLean and Alvin Dunn of Pillsbury Winthrop Shaw Pittman LLP.

Tridentis LLC is represented by William Lawler and Amanda DeLaPerriere of Blank Rome LLP.

The case is Susan Scharpf et al. v. General Dynamics Corp. et al., case number 1:23-cv-01372, in the U.S. District Court for the Eastern District of Virginia.