Valspar Corp. v. E.I. Du Pont De Nemours & Co.

Citation152 F.Supp.3d 234
Decision Date25 January 2016
Docket NumberCivil Action No. 14–527–RGA
Parties The Valspar Corporation and Valspar Sourcing, Inc., Plaintiffs; v. E.I. Du Pont De Nemours and Company, Defendant.
CourtU.S. District Court — District of Delaware

Frederick L. Cottrell, III, Esq., Chad M. Shandler, Esq., Jason J. Rawnsley, Esq., Richards, Layton & Finger, P.A., Wilmington, DE; Richard Ihrig, Esq., James M. Lockhart, Esq. (argued), James P. McCarthy, Esq., John C. Ekman, Esq., Jessica L. Meyer, Esq., Lindquist & Vennum LLP, Minneapolis, MN, for Plaintiffs The Valspar Corporation and Valspar Sourcing, Inc.

Kathleen Furey McDonough, Esq., John A. Sensing, Esq., Potter, Anderson & Corroon LLP, Wilmington, DE; Shari Ross Lahlou, Esq. (argued), Crowell & Moring LLP, Washington, DC; Joshua C. Stokes, Esq., Crowell & Moring LLP, Los Angeles, CA, for Defendant E.I. du Pont de Nemours and Company.

MEMORANDUM OPINION

ANDREWS

, U.S. DISTRICT JUDGE

Presently before the Court is E.I. du Pont de Nemours and Company's motion for summary judgment (D.I.239). The issues have been fully briefed. (D.I.240, 286, 381). Oral argument was held on November 16, 2015. (D.I.396). For the reasons set forth herein, the motion for summary judgment is GRANTED.

I. PROCEDURAL BACKGROUND

Prior to filing suit in this case, Plaintiffs opted out of two separate class actions against the defendants in this case.1

(D.I.1). On November 22, 2013, The Valspar Corporation and Valspar Sourcing, Inc. (collectively Valspar) brought an antitrust action against DuPont, Huntsman International LLC, Kronos Worldwide, Inc., and Millennium Inorganic Chemicals, Inc., for violations of Section 1 of the Sherman Act, along with several state law claims.2 (D.I.1). Valspar alleged that DuPont and the other defendants, all suppliers of titanium dioxide (or “TiO2”), conspired to fix the price of titanium dioxide. (Id. ). The action was originally brought in the District of Minnesota. (Id. ). Valspar's case against Millennium remains there. Valspar Corp. v. Millennium Inorganic Chems., Inc., No. 13–CV–03214. Valspar's case against Huntsman was severed and transferred to the Southern District of Texas. (D.I.100). The action against Kronos was also severed and transferred to that court. Valspar Corp. v. Kronos Worldwide, Inc., 50 F.Supp.3d 1152, 1157–58 (D.Minn.2014)

. The case against DuPont was severed and transferred to the District of Delaware. (D.I.100). Following discovery, DuPont moved for summary judgment. (D.I.239).

II. FACTUAL BACKGROUND

Titanium dioxide is a white pigment with certain refractive and UV properties, which makes it useful in certain products including paint and other coatings, plastics, rubber, and paper. (D.I. 250, Ex. 198; D.I. 293, Ex. 199). The market is highly concentrated.3 (D.I. 288, Ex. 7 at 97–99, Ex. 11 at 5–12; D.I. 289, Ex. 24 at 4, Ex. 31; D.I. 290, Ex. 35 at 51; D.I. 291, Ex. 75 at 12). DuPont was one of several companies—along with Huntsman, Millennium, Kronos, Tronox, and Asian and European producers—that sold titanium dioxide in the United States during the relevant time period. (D.I. 250, Ex. 206 at 10–12). Valspar, a manufacturer of paints and other coatings, was one of DuPont's largest customers. (D.I. 245, Ex. 74 at 271–72).

Relevant to this case is the existence of the Titanium Dioxide Manufacturers Association (“TDMA”) and its associated Global Statistics Program (“GSP”). (D.I.307, Ex. 701). The TDMA is a trade association organized by a European chemical industry trade association called “CEFIC.” (Id. ). The TDMA established the GSP to collect data on monthly sales, production, and inventory for members of the TDMA. (D.I. 307, Exs. 688, 690; D.I. 308, Ex. 734 at 54–56). This data is aggregated and distributed to the members of the TDMA. (D.I 307, Exs. 688, 690).

In the 1990s and 2000s, the titanium dioxide industry suffered considerable declines in consumption and price. (D.I. 312, Ex. 983 ¶¶ 71–75, figs. 4, 5 & 6; D.I. 297, Ex. 386; D.I. 288, Ex. 16 at 143). Profitability reached an all-time low in 2001. (D.I. 289, Ex. 31 at 40; D.I. 297, Ex. 386). Valspar alleges that because of this decline, DuPont and the other defendants entered into a conspiracy to fix prices. (D.I. 286 at 8). Valspar contends that this conspiracy resulted in 31 parallel price increase announcements between 2002 and 2013 (the “Conspiracy Period”). (Id. at 8–9). Valspar contends that, as a result of this conspiracy, DuPont and the other defendants charged, an average of 16% more than they would have but for the conspiracy. (Id. at 9). Valspar purchased $ 1.27 billion of titanium dioxide from DuPont and the other defendants in the period from February 2003 to December 2013. (Id. ; D.I. 312, Ex. 981 at 10–11). Valspar contends this resulted in an overcharge to Valspar of $176 million. (D.I. 286 at 9).

III. LEGAL STANDARD

“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a)

. The moving party has the initial burden of proving the absence of a genuinely disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Material facts are those “that could affect the outcome” of the proceeding, and “a dispute about a material fact is ‘genuine’ if the evidence is sufficient to permit a reasonable jury to return a verdict for the nonmoving party.” Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir.2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). The burden on the moving party may be discharged by pointing out to the district court that there is an absence of evidence supporting the non-moving party's case. Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

The burden then shifts to the non-movant to demonstrate the existence of a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)

; Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460–61 (3d Cir.1989). A non-moving party asserting that a fact is genuinely disputed must support such an assertion by: (A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations ..., admissions, interrogatory answers, or other materials; or (B) showing that the materials cited [by the opposing party] do not establish the absence ... of a genuine dispute....” Fed.R.Civ.P. 56(c)(1).

When determining whether a genuine issue of material fact exists, the court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007)

; Wishkin v. Potter, 476 F.3d 180, 184 (3d Cir.2007). A dispute is “genuine” only if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 247–49, 106 S.Ct. 2505. If the non-moving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See

Celotex, 477 U.S. at 322, 106 S.Ct. 2548.

IV. ANALYSIS

A. Sherman Act § 1 Legal Standard

Section 1 of the Sherman Act provides: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” 15 U.S.C. § 1

. In order to satisfy the requirement of a “contract, combination ... or conspiracy,” there must be “some form of concerted action.” In re Baby Food Antitrust Litig., 166 F.3d 112, 117 (3d Cir.1999). “The existence of an agreement is the hallmark of a Section 1 claim.” Id. ; see also

Alvord–Polk, Inc. v. F. Schumacher & Co., 37 F.3d 996, 999 (3d Cir.1994) (The “very essence of a section 1 claim ... is the existence of an agreement.”).

In addition to demonstrating an agreement, the § 1

plaintiff must show that “the conspiracy to which the defendant was a party Imposed an unreasonable restraint on trade.” Toledo Mack Sales & Serv., Inc. v. Mack Truck, Inc., 530 F.3d 204, 218 (3d Cir.2008)

. In most cases, courts “apply the so-called rule of reason, a case-by-case inquiry designed to assess whether challenged conduct is an anticompetitive practice.” In re Chocolate Confectionary Antitrust Litig., 801 F.3d 383, 395 (3d Cir.2015). Some agreements, however, are per se unlawful once proven. In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 316 (3d Cir.2010). One such per se unlawful agreement is horizontal price fixing. Texaco Inc. v. Dagher, 547 U.S. 1, 5, 126 S.Ct. 1276, 164 L.Ed.2d 1 (2006). In per se cases, “the plaintiff need only prove that the defendants conspired among each other and that this conspiracy was the proximate cause of the plaintiff's injury.” InterVest, Inc. v. Bloomberg, L.P., 340 F.3d 144, 159 (3d Cir.2003).

There is no “special burden on plaintiffs facing summary judgment in antitrust cases.” Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 468, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992)

. There is, however, an “important distinction” in § 1 cases: “antitrust law limits the range of permissible inferences [that may be drawn] from ambiguous evidence.” In re Flat Glass Antitrust Litig., 385 F.3d 350, 357 (3d Cir.2004) (quoting Matsushita Elec. Indus.

Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). The “acceptable inferences which can be drawn from circumstantial evidence vary with the plausibility of the plaintiff's theory and the dangers associated with such inferences.” Petruzzi's IGA Supermarkets, Inc. v. Darling–Delaware Co., 998 F.2d 1224, 1232 (3d Cir.1993). Thus, when a plaintiff's theory “makes no economic sense,” the...

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