Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co. (In re Vitamin C Antitrust Litig.)

• Decision Date: 31 January 2014
• Docket Number: 06–CV–988.,Nos. 06–MD–1738 (BMC)(JO), 06–CV–149,06–CV–987,s. 06–MD–1738 (BMC)(JO), 06–CV–149
• Citation: 995 F.Supp.2d 125
• Parties: In re VITAMIN C ANTITRUST LITIGATION. This document relates to: Animal Science Products, Inc., et al., Plaintiffs, v. Hebei Welcome Pharmaceutical Co. Ltd., et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

995 F.Supp.2d 125

In re VITAMIN C ANTITRUST LITIGATION.This document relates to:Animal Science Products, Inc., et al., Plaintiffs,

v.Hebei Welcome Pharmaceutical Co. Ltd., et al., Defendants.

Nos. 06–MD–1738 (BMC)(JO), 06–CV–149, 06–CV–987, 06–CV–988.

United States District Court, E.D. New York.

Jan. 31, 2014.

Alanna Rutherford, Boies, Schiller & Flexner LLP, Carrie Ann Tendler, Michael S. Kim, Kobre & Kim LLP, David E. Kovel, Kenneth G. Walsh, Kirby McInerney LLP, New York, NY, Shawn L. Raymond, James T. Southwick, Katherine H. Kunz, Susman Godfrey L.L.P., Houston, TX, Tanya S. Chutkan, William A. Isaacson, Brian C. Baker, Jennifer Milici, Boies, Schiller & Flexner LLP, Benjamin D. Brown, Cohen, Milstein, Sellers & Toll, P.L.L.C., Brian A. Ratner, Melinda R. Coolidge, Hausfeld LLP, Washington, DC, Brent W. Landau, Hausfeld LLP, Philadelphia, PA, John Han, Kobre & Kim LLP, Central, HK, David Boies, Timothy D. Battin, Straus & Boies, LLP, Fairfax, VA, Daniel C. Hedlund, Gustafson Gluek PLLC, Minneapolis, MN, Tina J. Moore, Morris, Laing, Evans, Brock & Kennedy, Chtd., Wichita, KS, Donald Chidi Amamgbo, Amamgbo & Associates, Judith Blackwell, Blackwell & Blackwell, Oakland, CA, Reginald Von Terrell, The Terrell Law Group, Richmond, CA, R. Alexander Saveri, Richard Saveri, Saveri & Saveri, Inc., San Francisco, CA, Keith A. Pitt, Slinde Nelson Stanford, Portland, OR, for Plaintiffs.

Jabo's Pharmacy, Inc., pro se.

Niall Vignoles, pro se.

Hunt & Behrens, Inc., pro se.

Dion D. Lee, pro se.

Mauricio Ajanel, pro se.

Philip J. Nelson, pro hac vice.

Dale C. Christensen, Seward & Kissel LLP, James I. Serota, Kenneth Alan Lapatine, Scott Allan Martin, Greenberg Traurig LLP, Richard Scott Goldstein, Stephen V. Bomse, Steven Robert Newmark, Catharine Louise Zurbrugg, Orrick, Herrington & Sutcliffe LLP, Daniel Paul Weick, Jonathan Mitchell Jacobson, Wilson Sonsini Goodrich & Rosati, PC, New York, NY, Daniel Mason, Eric Buetzow, Joseph W. Bell, Zelle, Hofmann, Voelbel & Mason LLP, Jiangxiao Hou, Zelle Hofmann Voelbel Mason & Gette LLP, San Francisco, CA, Annapoorni R. Sankaran, Greenberg Taurig, LLP, Boston, MA, for Defendants.

MEMORANDUM DECISION AND ORDER

COGAN, District Judge.

Presently before me is a motion by the Indirect Purchaser Plaintiffs (“plaintiffs”) for leave to file a second amended class action complaint in this multi-district litigation. Most of the proposed amendments are unopposed, but for one that would add an additional defendant, a minority shareholder of a present defendant. As to this proposed additional defendant, the main question is whether, under Federal Rule of Civil Procedure 15(c), the addition of this defendant will relate back to the prior pleadings for purposes of the applicable statutes of limitations and thus save plaintiffs' proposed claim against this new defendant from futility. I answer the question negatively as to both the federal and state rules governing the doctrine of relation-back, except that as to Massachusetts, for which the amendment shall be allowed.

BACKGROUND

As reflected by the docket number, these cases have an extensive history. Direct and indirect purchasers of Vitamin C brought a number of class actions against a group of Chinese companies beginning in 2005. The basic allegation was that these companies fixed prices of Vitamin C for the period 2001 through 2006 in violation of, depending on the particular complaint, the Clayton Act, 15 U.S.C. § 12 et seq., or various state antitrust and consumer protection statutes. The Judicial Panel on Multi–District Litigation transferred all of the actions here for pretrial proceedings before the late Judge Trager.

The direct purchaser plaintiffs and the indirect purchaser plaintiffs each filed a consolidated class action complaint. However, two of the indirect purchaser plaintiffs were not included in that consolidation. Those are the Philon case, 06–cv–987, which alleged various California state law claims, and the Audette case, 06–cv–988, which alleged two claims under Massachusetts law. The consolidated action is the Keane case, 06–cv–149, which alleged violations of state law of another 21 states. The proposed second amended class action complaint would consolidate all three of these cases, and slightly reduce the number of states included in the present Keane action.

This motion to amend seeks to add North China Pharmaceutical Group Corporation (“North China”), a minority shareholder of defendant Hebei Welcome Pharmaceutical Co. (“Hebei”), as a defendant. North China was added to the direct purchaser consolidated complaint in January 2007. North China was never added to any of the indirect purchaser complaints, however, even though those actions brought claims against Hebei. In November 2008, counsel for both the direct and indirect purchaser plaintiffs as well as counsel for all defendants entered into a stipulation to stay the indirect purchaser cases pending entry of final judgment in the direct purchaser cases (the “stay stipulation”). As recited in the stay stipulation, the parties believed that their claims against those defendants they had sued would likely be resolved or at least simplified by the judgment in the direct purchaser action. Significantly, the stay stipulation did not include North China, because North China had not yet been sued by the indirect purchasers. The stay stipulation provided that any party could seek to lift the stay upon 30 days' notice.¹

The direct purchaser action went to trial before me in 2013. All of the defendants besides North China and Hebei settled, two of them after commencement of trial. The jury returned a verdict against North China and Hebei which netted out to $153 million after trebling and reduction for settlement proceeds.

The indirect purchaser plaintiffs now move to bring the Philon and Audette cases within a Second Amended Consolidated Class Action Complaint. Aside from ministerial changes which are not opposed, they seek to add North China as a defendant, alleging “changed circumstances.”

DISCUSSION

I. Effect of the Stay Stipulation

Plaintiffs concede that any conceivable statutes of limitations for claims falling under the various state laws implicated by their proposed second amended complaint have run years ago. Their first argument to avoid this expiration is the stay stipulation. They contend that the stay stipulation constituted a toll as to any claims that they might seek to assert against North China.

I easily reject that argument. North China was not a party to the stay stipulation because at the time the parties entered into the stay stipulation, North China was not a party to the indirect purchaser actions. Plaintiffs cite no authority suggesting how a non-party to this stipulation could be bound by it. The most plaintiffs can say is that Hebei signed the stipulation, and North China was represented by the same counsel as Hebei. That is a long way from the conclusion that North China agreed to a toll of the statute of limitations.

There is nothing in the stay stipulation that references any statutes of limitations. The absence of any such language is a further indication that the stay stipulation was intended only to affect the defendants in the indirect purchaser actions at that time, because there was no need to toll any statute of limitations as to those defendants. Nor do plaintiffs argue that North China was omitted from the stipulation by mistake, such that the stipulation should be reformed due to mutual misunderstanding between the parties. The stay stipulation cannot save plaintiffs' timebarred claims against North China.

II. Rule 15(c)(1)(C)—Federal relation-back

Plaintiffs' more substantial argument is that the proposed amendment “relates back” to the date on which they filed their first consolidated amended complaint—November 1, 2006—and therefore is within the applicable statutes of limitations. This argument attracts two provisions of Federal Rule of Civil Procedure 15, one involving federal law and the other involving state law. The federal relation-back provision is Federal Rule of Civil Procedure 15(c)(1)(C). It provides that an amended pleading relates back to the date of the original pleading when:

(C) the amendment changes the party or the naming of the party against whom a claim is asserted, if Rule 15(c)(1)(B) is satisfied and if, within the period provided by Rule 4(m) for serving the summons and complaint, the party to be brought in by amendment:

(i) received such notice of the action that it will not be prejudiced in defending on the merits; and

(ii) knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity.

The issue framed by plaintiff's argument is whether the final clause—the proposed party “knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity”—refers not only to the substitution of a proper party for an erroneously named party, but also to the addition of a new party when all of the parties previously named were themselves proper parties. A useful way of looking at this is to break the situations down into two categories. The first category, “wrong party” cases, is where a plaintiff has sued the wrong party or used the wrong name and seeks to amend to substitute the right party or the right name. See Reed v. U.S. Bancorp, No 12–cv–344, 2013 WL 1249231 (E.D.Tenn. Mar. 26, 2013). The second category, “additional party” cases, is where the defendants originally sued are indeed exposed to liability on the theories alleged, but the plaintiff has omitted an additional party against whom the plaintiff also could have stated a claim. See Turner v. Nicoletti, No. 12–1855, 2013 WL 3989071 (W.D.Pa. Aug. 2, 2013).

It is clear enough that plaintiffs here made a tactical “mistake” in the colloquial sense. What they should have done was to either amend their complaint to add...