In re Aluminum Phosphide Antitrust Litigation

• Decision Date: 17 October 1995
• Docket Number: Civ. A. No. 93-2452-KHV.
• Citation: 905 F. Supp. 1457
• Parties: In re ALUMINUM PHOSPHIDE ANTITRUST LITIGATION. This Document Relates To All Actions.
• Court: U.S. District Court — District of Kansas

905 F. Supp. 1457

In re ALUMINUM PHOSPHIDE ANTITRUST LITIGATION This Document Relates To All Actions.

Civ. A. No. 93-2452-KHV.

United States District Court, D. Kansas.

September 8, 1995.

Order Granting Reconsideration October 17, 1995.

Deborah Farrar Quirk, Kansas City, MO, Thomas H. Brill, Mission Hills, KS, Joel C. Meredith, Krishna Narine, Meredith, Cohen & Greenfogel, P.C., Philadelphia, PA, Vernon N. Reaser, Jr., Reaser & Wall, Victoria, TX, Issac L. Diel, Leawood, KS, for National Bugmobiles, Inc., on behalf of itself and all others similarly situated.

Edmund S. Gross, Farmland Industries, Inc., Kansas City, MO, Alvin D. Shapiro, Law Offices of Alvin D. Shapiro, Kansas City, MO, for Farmland Industries, Inc.

David E. Everson, Jr., Tammy L. Womack, Stinson, Mag & Fizzell, Kansas City, MO, Nancy L. Heilman, Cohen & Grigsby, Pittsburgh, PA, for Pestcon Systems Inc., Degesch America, Inc.

Eric D. Braverman, Employers Reinsurance Corporation, Overland Park, KS, A. Bradley Bodamer, Morrison & Hecker, Overland Park, KS, James E. Wright, III, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, LA, for Bernardo Chemicals Ltd., Inc., United Phosphorus, Ltd., Christina S. Bernardo.

Floyd R. Finch, Jr., Katharine S. Bunn, Jeffrey J. Simon, Sally B. Surridge, Brian J. McGrath, James R. Ward, Blackwell, Sanders, Matheny, Weary & Lombardi, Kansas City, MO, Tessa K. Jacob, Blackwell, Sanders, Matheny, Weary & Lombardi, Overland Park, KS, for Inventa Corp.

G. Stanton Masters, James L. Eisenbrandt, Bryan Cave, Overland Park, KS, Nancy L. Heilman, Cohen & Grigsby, Pittsburgh, PA, for Detia-Degesch, GMBH.

David E. Everson, Jr., Tammy L. Womack, Stinson, Mag and Fizzell, Kansas City, MO, G. Stanton Masters, James L. Eisenbrandt, Bryan Cave, Overland Park, KS, Nancy L. Heilman, Cohen & Grigsby, Pittsburgh, PA, for Detia Freyberg, GMBH.

Eric D. Braverman, Employers Reinsurance Corp., Overland Park, KS, A. Bradley Bodamer, Morrison & Hecker, Overland Park, KS, for Casa Bernardo Ltd.

Thomas M. Bradshaw, Dianne M. Hansen, Armstrong, Teasdale, Schlafly & Davis, Kansas City, MO, James R. Hobbs, Marilyn B. Keller, Wyrsch, Atwell, Mirakian, Lee & Hobbs, Kansas City, MO, for McShares Inc., dba Research Products Company.

Edmund S. Gross, Farmland Industries, Inc., Kansas City, MO, Alvin D. Shapiro, Law Offices of Alvin D. Shapiro, Kansas City, MO, for Farmland Industries, Inc.

MEMORANDUM AND ORDER

VRATIL, District Judge.

This matter comes before the Court on Defendant McShares, Inc.'s Separate Motion for Summary Judgment (Doc. # 394), filed April 10, 1995; the Motion for Summary Judgment of Defendants United Phosphorus, Ltd., and Inventa Corporation (Doc. # 400), filed April 10, 1995; the Motion of Defendants Degesch America, Inc., Pestcon Systems, Inc., Detia Degesch GmbH and Detia Freyberg GmbH for Partial Summary Judgment (Doc. # 405), filed April 10, 1995; and the Motion of Defendant McShares, Inc. for Partial Summary Judgment (Doc. # 418), filed April 21, 1995. For the following reasons, and for the reasons stated on the record at the status conference on August 30, 1995, the Court finds that said motions should be sustained with respect to plaintiffs' claims for damages based on sales of cases of aluminum phosphide products outside of 1990, and overruled with respect to plaintiffs' claims for damages based on sales of cases of aluminum phosphide products in 1990. Because an additional memorandum of the Court's reasoning will follow, the Court indulges in only a few brief comments on plaintiffs' new theory with respect to the "fact of injury."

On June 27, 1995, the Court entered its Memorandum and Order (Doc. # 498) with respect to Defendants' Joint Motion in Limine to Exclude Dr. Richard C. Hoyt's Testimony and Expert Report From this Case (Doc. # 443), filed May 5, 1995. In that order, the Court concluded that Dr. Hoyt had not shown that his "before and after" model, as applied in this case, accounted for undisputed increases in competition between the conspiratorial and normative periods; that Dr. Hoyt had not justified his constant cost industry assumption or his application of individual benchmark prices for each defendant and that Dr. Hoyt had not through proper scientific method established that the difference between prices in the normative and conspiratorial periods was attributable to defendants' alleged conspiracy, to the exclusion of other relevant factors. Because Dr. Hoyt's opinion was based on unjustified assumptions and did not account for changes in relevant market conditions, the Court held that it would not assist a trier of fact in determining the fact or amount of plaintiffs' damages. Moreover, the Court concluded that in the foregoing respects, Dr. Hoyt's opinion was economically unreliable and thus inadmissible under Rule 702, and that any minimum probative value of his opinion would be substantially outweighed by the danger of unfair prejudice resulting from his unsupported assumptions.

In evaluating the consequences of this ruling, the Court recognized the apparent anomaly of its holding: that without Dr. Hoyt's opinion, plaintiffs might be stripped of their ability to recover substantial actual damages from admitted conspirators. In response to defendants' motions for summary judgment on this issue, plaintiffs propose to rectify the problem through the use of nonexpert testimony that in 1988 and 1989 the competitive wholesale price of aluminum phosphide to distributors was "at least $340.00." See Plaintiffs' Response to Supplemental Memorandum of Defendants Degesch America, Pestcon, Detia Degesch and Detia Freyberg in Support of Their Motions for Summary Judgment (Doc. # 518), filed August 23, 1995. Specifically, plaintiffs claim that from the statements of two defendants at separate meetings in 1988 and 1989, respectively, a jury could reasonably infer that defendants' estimated competitive wholesale price, absent the alleged conspiracy, was at least $340.00.

Plaintiffs argue that this evidence creates a genuine issue of material fact with respect to whether defendants' conspiracy injured plaintiffs from January 1, 1988 through December 31, 1992. See Farley Transp. Co., Inc. v. Santa Fe Trail Transp. Co., 786 F.2d 1342, 1348 (9th Cir.1985). Plaintiffs further contend that from such evidence, the jury could determine by just and reasonable estimate the amount of plaintiffs' damages, see MCI Communications Corp. v. American Tel. & Tel. Co., 708 F.2d 1081, 1161 (7th Cir.), cert. denied, 464 U.S. 891, 104 S.Ct. 234, 78 L.Ed.2d 226 (1983).¹

Summary Judgment Standard

Antitrust plaintiffs must prove that their injuries were caused by the unlawful acts of defendants. MCI Communications, 708 F.2d at 1161. In doing so, plaintiffs must establish that defendants' unlawful activities were a material cause of at least some of their injury, rather than the injury being wholly attributable to other factors. Farley Transportation, 786 F.2d at 1349. Once plaintiffs have established causation of damages, the jury may determine the amount of damages by a just and reasonable estimate, as long as the jury verdict is not the product of speculation or guesswork. MCI Communications, 708 F.2d at 1161 (citing J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 566-67, 101 S.Ct. 1923, 1929, 68 L.Ed.2d 442 (1981) and Zenith Radio Corp. v. Hazeltine Research Inc., 395 U.S. 100, 123-34, 89 S.Ct. 1562, 1576-83, 23 L.Ed.2d 129 (1969)).

Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Vitkus v. Beatrice Co., 11 F.3d 1535, 1538-39 (10th Cir.1993). A factual dispute is "material" only if it "might affect the outcome of the suit under the governing law," Anderson, 477 U.S. at 248, 106 S.Ct. at 2511, and a "genuine" factual dispute requires more than a mere scintilla of evidence. Id. at 252, 106 S.Ct. at 2512.

The moving party bears the initial burden of showing that there is an absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Hicks v. Watonga, 942 F.2d 737, 743 (10th Cir.1991). Once the moving party meets its burden, the burden shifts to the nonmoving party to demonstrate that genuine issues remain for trial "as to those dispositive matters for which it carries the burden of proof." Applied Genetics Int'l, Inc. v. First Affiliated, Inc., 912 F.2d 1238, 1241 (10th Cir.1990); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986); Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991).

Summary judgment may be granted if the non-moving party's evidence is merely colorable or is not significantly probative. Anderson, 477 U.S. at 250-51, 106 S.Ct. at 2511. "In a response to a motion for summary judgment, a party cannot rely on ignorance of facts, on speculation, or on suspicion, and may not escape summary judgment in the mere hope that something will turn up at trial." Conaway v. Smith, 853 F.2d 789, 793 (10th Cir.1988). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52, 106 S.Ct. at 2511-12. Ever mindful of these summary judgment standards, we now turn to the merits of plaintiffs' argument.

Plaintiffs' Evidence that $340.00 is a "Competitive Price"

Plaintiffs claim that because $340.00 per case is the figure which defendants "bantered about ... in their numerous meetings," the...