In re Potash Antitrust Litigation
| Decision Date | 02 January 1997 |
| Docket Number | MDL Docket No. 981.,Civil No. 3-93-197/RHK/RLE. |
| Parties | In re POTASH ANTITRUST LITIGATION. This Document Relates to all Cases. |
| Court | U.S. District Court — District of Minnesota |
Joel C. Meredith, Bruce Cohen, Philadelphia, PA, Mark Reinhardt, Harvey Eckart, St. Paul, MN, for Plaintiff Class.
Richard J. Favretto, Marc Gary, Kerry Lynn Edwards, Washington, DC, Gordon G. Busdicker, Minneapolis, MN, for IMC Fertilizer Group, Inc.
Stephen A. Marshall, Marin P. Michael, New York City, for New Mexico Potash Corp. and Eddy Potash, Inc.
David C. Gustman, Michael Kelly, Chicago, IL, for Noranda Minerals Inc., Noranda Sales Corp., Ltd., and Central Canada Potash Co.
Michael Evan Jaffe, Gerald Zingone, Washington, DC, for PCS.
Gerald A. Connell, Ronald M. Wick, Washington, DC, for Cominco, Ltd., and Cominco American Inc.
Victor S. Friedman, Eric Queen, New York City, for Potash Co. of America, Inc. and Rio Algom, Ltd.
Frank A. Taylor, Kathryn M. Walker, Minneapolis, MN, for PPG Canada Ltd. and PPG Industries, Inc.
Douglas E. Rosenthal, Amy L. Bess, Washington, DC, for Kalium Chemicals, Ltd., and Kalium Canada, Ltd.
Leon R. Goodrich, St. Paul, MN for Cominco, Kalium, Noranda, and PCA.
Before the Court are Plaintiffs' Objections to the September 13, 1996 Report and Recommendation of Magistrate Judge Raymond L. Erickson recommending that:
(1) the Motion of PCA and Rio Algom for Summary Judgment (Docket No. 512) be granted;
(2) Kalium's Motion for Summary Judgment (Docket No. 516) be granted;
(3) Noranda's Motion for Summary Judgment (Docket No. 519) be granted;
(4) Cominco's Motion for Summary Judgment (Docket No. 522) be granted;
(5) the Joint Motion of the Defendants for Summary Judgment (Docket No. 525) be granted;
(6) IMC's Motion for Summary Judgment (Docket No. 527) be granted;
(7) PPG's Motion for Summary Judgment (Docket No. 530) be granted; and
(8) the Motion of New Mexico Potash and Eddy Potash for Summary Judgment (Docket No. 534) be granted.
The Court has made a de novo determination of those portions of the Report and Recommendation to which Objections have been made. In doing so, the Court has reviewed the entire file, the Motions for Summary Judgment and supporting and opposing briefs, the proceedings before Judge Erickson, the Report and Recommendation of Judge Erickson, the Objections with respect thereto, the briefs in support of and in opposition to said Objections, and the oral argument of counsel in the hearing held before the undersigned on December 20, 1996. The Report and Recommendation is thorough and well reasoned. In the Court's view, it correctly analyzes and resolves the issues presented by the Motions for Summary Judgment and the Objections now before the Court. No useful purpose would be served by this Court repeating the analysis here. The Court concurs with the determinations of Magistrate Judge Erickson and will adopt the Report and Recommendation in its entirety.
Accordingly, based upon a de novo review of the Objections and upon all the files, records, and proceedings herein, the Report and Recommendation of Magistrate Judge Erickson dated September 13, 1996 is ACCEPTED and ADOPTED, and
IT IS ORDERED that:
(1) the Motion of PCA and Rio Algom for Summary Judgment (Docket No. 512) is GRANTED;
(2) Kalium's Motion for Summary Judgment (Docket No. 516) is GRANTED;
(3) Noranda's Motion for Summary Judgment (Docket No. 519) is GRANTED;
(4) Cominco's Motion for Summary Judgment (Docket No. 522) is GRANTED;
(5) the Joint Motion of the Defendants for Summary Judgment (Docket No. 525) is GRANTED;
(6) IMC's Motion for Summary Judgment (Docket No. 527) is GRANTED;
(7) PPG's Motion for Summary Judgment (Docket No. 530) is GRANTED; and
(8) the Motion of New Mexico Potash and Eddy Potash for Summary Judgment (Docket No. 534) is GRANTED.
Pursuant to the foregoing, Plaintiffs' Third Amended and Consolidated Class Action Complaint (Docket No. 249) is DISMISSED WITH PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.
REPORT AND RECOMMENDATION
At Duluth, in the District of Minnesota, this 13th day of September, 1996.
This matter came before the undersigned United States Magistrate Judge pursuant to a special assignment, made in accordance with the provisions of Title 28 U.S.C. § 636(b)(1)(A) and (B), upon the Motions of the Defendants for Summary Judgment.1
A Hearing on the Motions was conducted on April 18, 1996, at which time the parties appeared by lead and liaison counsel.2
For reasons which follow, we recommend that the Defendants' Motions for Summary Judgment be granted.
This action was commenced on April 1, 1993, when the first of twelve Complaints was filed in this Court, alleging that the Defendants had violated Section 1 of the Sherman Act, Title 15 U.S.C. § 1, by engaging in a conspiracy to fix the sales price of potash, a mineral that is widely used in the manufacture of fertilizers.3 On May 19, 1993, the District Court, the Honorable Richard H. Kyle presiding, directed the parties to file an Amended Consolidated Class Action Complaint which would combine the twelve separate proceedings.4
The Plaintiffs' First Amended Consolidated Class Action Complaint was filed on June 4, 1993. Thereafter, the Defendants informed the Court that Keith Barton ("Barton"), who had previously served as the General Counsel to PCS, had furnished counsel for the Plaintiffs with confidential information about PCS, which Barton had acquired as legal counsel to that company. By Order dated December 8, 1993, the District Court concluded that Barton had breached his ethical obligations, by impermissibly disclosing certain of PCS's confidences. As a necessary, remedial sanction, the District Court disqualified the bulk of the counsel, who had then been retained by the Plaintiffs, and whose capacity, to ethically serve in this litigation, had been irreconcilably compromised by their involvement with Barton, and directed the Plaintiffs to file Amended Complaints which would be free from the taint of Barton's disclosures. See, In re Potash Antitrust Litigation, Civ. No. 3-93-197, M.D.L. Docket No. 981, 1993 WL 543013 (D.Minn., December 8, 1993).
In a Third Amended Complaint, which was served and filed on July 8, 1994, the Plaintiffs have alleged that the Defendants conspired, from April of 1987, to and including July 8 1994, to fix, stabilize, and maintain potash prices, and that, as a result of that conspiracy, price competition in the sale of potash, among the Defendants and their co-conspirators, had been restrained. Specifically, the Plaintiffs have asserted that the Defendants, and their co-conspirators, raised, fixed, maintained and stabilized the price of potash throughout the United States, at artificially high and noncompetitive levels, thereby depriving their customers of the benefit of free and open competition. Third Amended Complaint at ¶ 55. The Plaintiffs seek injunctive relief and the recovery of treble damages, together with their costs and attorneys' fees, pursuant to Sections 4 and 16 of the Clayton Act, Title 15 U.S.C. §§ 15 and 26.
Included within the Plaintiff Class are all of those persons, who directly purchased potash from one of the Defendants, during the period of the alleged conspiracy. Accordingly, by Order dated January 12, 1995, the District Court certified the following class of Plaintiffs:
All purchasers (excluding governmental entities, defendants, subsidiaries and affiliates of defendants, co-conspirators of defendants, and other producers of potash and their subsidiaries and affiliates) in the United States of potash directly from defendants or any subsidiary or affiliate thereof at any time during the period April 1987 to and including July 8, 1994.
In re Potash Antitrust Litigation, 159 F.R.D. 682, 700 (D.Minn.1995).
By Order dated May 2, 1995, the Court drafted, for distribution, a Notice which was "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." In re Potash Antitrust Litigation, 161 F.R.D. 411, 412 (D.Minn.1995). Insofar as we are aware, the Court-sanctioned Notice was published, and was mailed, in accordance with our directions, on or about June 30, 1995.
With the exception of PPG and Rio Algom, the Defendants are either Canadian or American producers of potash, or are the marketing subsidiaries of those producers.5 Although the attributes, which are said to distinguish the Defendants, will be addressed when relevant to our subsequent analysis, a brief discussion of the potash market will provide a helpful backdrop.
PCS, which is the largest producer of potash in North America, was created, in 1975, by the Saskatchewan Government, and was vested with the authority to acquire up to 50 percent of the productive capacity for potash in that Province. In 1989, PCS was privatized —a process that the Defendants assert was initiated in the latter part of 1986—with the result that a change in its merchandising was introduced, from one of production to one of profit. Kalium, which is another Canadian producer of potash, contends that, during the period of the alleged conspiracy, it was able to increase its market share by exploiting the superiority of its product— white potash—through a patented method of solution mining. Noranda's marketing plan, on the other hand, is somewhat distinguishable, since 80 percent of its sales are consummated with only two customers, whose purchase agreements have required that Noranda sell its potash at the market price. In contrast, PCA's marketing in the United States has been less successful than that of the other Defendants, as is reflected in its...
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