In re Actions

Decision Date14 August 2013
Docket NumberCivil Action No. RDB–10–0318.
Citation959 F.Supp.2d 799
PartiesIn re TITANIUM DIOXIDE ANTITRUST LITIGATION. This Document Relates To: All Actions.
CourtU.S. District Court — District of Maryland

OPINION TEXT STARTS HERE

Michael C. Dell Angelo, Daniel J. Walker, Eric L. Cramer, Matthew P. McCahill, Berger and Montague PC, Philadelphia, PA, Brendan P. Glackin, Daniel M. Hutchinson, Eduardo E. Santacana, Eric B. Fastiff, Lin Y. Chan, Lieff Cabraser Heimann and Bernstein LLP, Charles Andrew Dirksen, Solomon B. Cera, Gold Bennett Cera and Sidener LLP, Joseph Richard Saveri, Saveri Law Firm, Kevin E. Rayhill, Lisa J. Leebove, Joseph Saveri Law Firm, Ryan James McEwan, Joseph Saveri Law Firm Inc., San Francisco, CA, Daniel E. Seltz, Steven E. Fineman, Lieff Cabraser Heimann and Bernstein LLP, New York, NY, Eric R. Harlan, John Joseph Lovejoy, Paul Mark Sandler, Robert B. Levin, Shapiro Sher Guinot and Sandler, Baltimore, MD, Kendall S. Zylstra, Stephen E. Connolly, Faruqi and Faruqi LLP, Jenkintown, PA, Kevin Bruce Love, Criden and Love PA, South Miami, FL, for Plaintiffs.

Darin P. McAtee, Evan R. Chesler, Timothy G. Cameron, Cravath Swaine and Moore LLP, New York, NY, Jeffrey Blumenfeld, John Luke Cuddihy, Kent A. Gardiner, Lucy Grace D. Noyola, Ryan C. Tisch, Shari Ross Lahlou, Crowell and Moring LLP, Noah L. Browne, Andrew Mercer Treaster, Anne P. Davis, Charles Alan Malloy, James L. Cooper, Justin P. Hedge, Robert A. Stolworthy, Jr., Ryan Watts, Arnold and Porter LLP, Andrew A. Nicely, Mayer Brown LLP, Richard Arthur Ripley, Lauren Ann Perotti, Nora Lorraine Whitehead, Haynes and Boone LLP, Dimitri J. Nionakis, Susanne M. Calabrese, Howrey LLP, Washington, DC, John Bucher Isbister, Tydings and Rosenberg LLP, David B. Hamilton, Womble Carlyle Sandridge and Rice PLLC, James P. Ulwick, Andrew Jay Graham, Ezra Gollogly, Kramon and Graham PA, Baltimore, MD, Paul Edward Coggins, Kelly Rothermel Vickers, Kiprian Edward Mendrygal Locke Lord Bissell and Liddell LLP, Adam S. Tyler, Kirsten M. Castaneda, Locke Lord LLP, Christopher A. Rogers, Haynes and Boone LLP, Dallas, TX, David T. Harvin, Erica T. Krennerich, James Arthur Reeder, Jr., Stacey Neumann Vu, Vinson and Elkins LLP, Houston, TX, John W. Mackay, Justin T. Toth, Ray Quinney and Nebeker PC, Salt Lake City, UT, Daniel Cohen, Cuneo Gilbert and Laduca LLP, Bethesda, MD, for Defendants.

MEMORANDUM OPINION

RICHARD D. BENNETT, District Judge.

This class action concerns an alleged price-fixing conspiracy in the market for titanium dioxide.1 The Plaintiff class representatives Haley Paint Company, Isaac Industries, Inc., and East Coast Colorants, LLC, doing business as Breen Color Concentrates, and the class of titanium dioxide purchasers whom they represent (together, Plaintiffs) claim that Defendants Kronos Worldwide Inc. (“Kronos”), and Cristal USA Inc., formerly known as Millennium Inorganic Chemicals, Inc. (“Millennium”), together with E.I. du Pont de Nemours & Co. (“DuPont”), Huntsman International LLC (“Huntsman”), and Tronox Inc. (“Tronox”), engaged in an unlawful conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, to fix, raise, or maintain the price of titanium dioxide in the United States.2 Plaintiffs allege that as a consequence of the unlawful conspiracy, the Defendants were successful in charging artificially inflated prices for titanium dioxide.

Presently pending before this Court are two Motions for Summary Judgment filed by Kronos (ECF No. 432) and Millennium (ECF No. 439), as well as a Joint Motion for Summary Judgment submitted by the two Defendants jointly (ECF No. 442). 3 The parties' submissions have been reviewed, and a hearing was held on June 25, 2013. For the reasons that follow, this Court DENIES the Motions for Summary Judgment filed by Kronos (ECF No. 432) and Millennium (ECF No. 439) and the Joint Motion for Summary Judgment (ECF No. 442), as it pertains to the remaining Defendants Kronos and Millennium.

BACKGROUND

This Court reviews the facts and all reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). Antitrust law, however, “limits the range of permissible inferences from ambiguous evidence,” such that “conduct as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy.” Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The Plaintiff class representatives, Haley Paint Company, Isaac Industries, and East Coast Colorants, LLC, doing business as Breen Color Concentrates, are small purchasers of titanium dioxide. They bring this case under Section 1 of the Sherman Act, alleging that the Defendants, as well as DuPont, Huntsman, and Tronox Inc. (“Tronox”),4 which are the market leaders in the production of titanium dioxide, conspired to fix prices during a period from February 1, 2003 to the present (the “Class Period”). They seek treble damages and injunctive relief under the Clayton Act, 15 U.S.C. §§ 4, 16.

The Plaintiff class representatives bring suit on behalf of a class defined as [a]ll persons and entities who purchased titanium dioxide in the United States directly from one or more Defendants or Tronox, or from any predecessors, parents, subsidiaries, or affiliates thereof, between February 1, 2003, and the present.” Order Granting Mot. Certify 2, ECF No. 338. The Plaintiffs' allegations center on the following evidence: the crisis in the titanium dioxide industry prior to the Class Period; DuPont's entrance into a European trade group, the Titanium Dioxide Manufacturers Association (“TDMA”), which created greater opportunities for interaction among the pigment producers; the introduction of a statistics program, which allowed the Defendants to collect global industry information; the routine communication of confidential, commercially sensitive information to other firms and industry consultants during the Class Period; repeated price increase announcements allegedly executed in lockstep by the Defendants Millennium and Kronos, DuPont, Huntsman, and Tronox; and interfirm sales of titanium dioxide.

At the outset, this Court notes that the Plaintiffs' case stands on circumstantial evidence alone—there is no “smoking gun” that explicitly reveals an agreement to conspire. Nevertheless, in the absence of an admission of guilt by the Defendants, the Plaintiffs may rely on purely circumstantial, or “ambiguous,” evidence from which the existence of a conspiracy may be inferred. See In re High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651, 654, 661–62 (7th Cir.2002) ([M]ost cases are constructed out of a tissue of [ambiguous] statements and other circumstantial evidence, since an outright confession will ordinarily obviate the need for a trial.”).

A. Declines in Price and Consumption of Titanium Dioxide: 1990s through 2001

In the 1990s, the titanium dioxide industry suffered substantial declines in consumption and price. See generally Pls.' App. M, ECF No. 451–28 (documenting presentations, reports, e-mails, and articles on the subject of unprecedented declines in price and consumption of titanium dioxide). A Huntsman marketing report in 2001, for example, indicated that the real price per ton of titanium dioxide plummeted from $3,200 in 1991 to $1,900 in 2000. See id. at entry 08/xx/2001 (no exact date in original). An editorial written by industry consultant Jim Fisher (“Fisher”) of International Business Management Associates, Inc. in 2002 confirmed these declines. See id. at entry 05/24/2002; see also PX 53, ECF No. 451–88. Specifically, Fisher spoke of a 6 percent decline in world pigment consumption leading to lower price levels “not seen since the early 1990s.” Id. Echoing this evidence, a Millennium “Corporate Strategy” report described a decline in “industry profitability ... driven by overcapacity and a decline in real prices ... over the last decade.” Pls.' App. M, entry 04/02/2003.

In particular, 2001 was considered a “disastrous” year. Id. at entry 06/11/2002. Two titanium dioxide plants—Millennium's plant in Baltimore, Maryland and Kerr–McGee's plant in Antwerp, Belgium—“were forced” to close in 2001, and the pigment producers were “bloodied badly” by falling prices and reduced profit margins. Id. at entries 02/01/2002 & 06/17/2002. Ian Edwards, DuPont's Global Business Director, was quoted as saying that in 2001 “capacity utilization was lower than at any point in the 1990s,” while Gary Cianfichi, Millennium's Director of Sales for Europe, explained that prices declined by about 15 percent due to poor demand, utilization, and operating rates. Id. at entry 10/21/2002. As a Millennium “Press Briefing” presentation summarized, “TiO2 profitability hit an all time low” in the fourth quarter of 2011. Id. at entry 11/18/2002. Because of these declines in the market, the Plaintiffs argue that the Defendants were motivated to create a cartel.

B. Introduction of DuPont in the Titanium Dioxide Manufacturers Association and Formation of the Global Statistics Program in 2002

DuPont is the global leader in the titanium dioxide industry. Its pigment production occurs in North America, and it enjoys a cost advantage over its competitors because of its relatively inexpensive process of production called the chloride process. See generally Pls.' App. O, ECF No. 451–30. Kronos, Millennium, Huntsman, and Kerr–McGee, on the other hand, are the major European producers of titanium dioxide. They are members of the Titanium Dioxide Manufacturers Association (“TDMA”), a trade group founded by the European producers of titanium dioxide and part of a larger trade association for the European chemical industry, the Conseil Européen des Fédérations de l'Industrie Chimique (“CEFIC”), based in Brussels, Belgium. See PX 9, ECF No. 451–44. Prior to the Class Period, the TDMA members participated in a...

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