In re Sugar Industry Antitrust Litigation

• Decision Date: 17 January 1977
• Docket Number: No. 201,201
• Citation: 427 F. Supp. 1018
• Parties: In re SUGAR INDUSTRY ANTITRUST LITIGATION. In re SUGAR INDUSTRY ANTITRUST LITIGATION (EAST COAST).
• Court: Judicial Panel on Multidistrict Litigation

427 F. Supp. 1018

In re SUGAR INDUSTRY ANTITRUST LITIGATION.

In re SUGAR INDUSTRY ANTITRUST LITIGATION (EAST COAST).

Nos. 201, 201A.

Judicial Panel on Multidistrict Litigation.

January 17, 1977.

Before JOHN MINOR WISDOM, Chairman, and EDWARD WEINFELD, EDWIN A. ROBSON, WILLIAM H. BECKER^*, JOSEPH S. LORD, III, STANLEY A. WEIGEL^**, and ANDREW A. CAFFREY^*, Judges of the Panel.

OPINION AND ORDER

PER CURIAM.

I. PROCEDURAL BACKGROUND

The Panel originally transferred several actions in this litigation to the Northern District of California and, with the consent of that court, assigned them to the Honorable George H. Boldt, sitting by designation, for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407. In re Sugar Industry Antitrust Litigation, 395 F.Supp. 1271 (Jud.Pan.Mult.Lit.1975). As of August 1976, 39 tag-along actions pending in fourteen various federal district courts had been transferred to the Northern District of California by the Panel for inclusion in the coordinated or consolidated pretrial proceedings. With the inclusion of 27 more tag-along actions originally filed in the Northern District of California, the total number of actions pending before the transferee court in August 1976 was 87.

On May 20, 1976, Judge Boldt entered an "Opinion and Order re Class Actions." The court certified separate classes of industrial users, retail grocers, wholesalers, and agricultural users for each of the marketing areas known in the sugar industry as the Chicago-West, California-Arizona and Intermountain-Northwest territories. In addition, individual classes of governmental entities were certified for each of the states represented in the litigation. On July 23, 1976, Judge Boldt denied motions for reconsideration or certification for appeal of his class action decision. Certain defendants recently filed a petition for a writ of mandamus before the United States Court of Appeals for the Ninth Circuit to set aside Judge Boldt's class certification order.¹

A second prong of this litigation, entitled In re Sugar Industry Antitrust Litigation (East Coast), was established by the Panel in the Eastern District of Pennsylvania and assigned to the Honorable Edward N. Cahn for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407. In re Sugar Industry Antitrust Litigation, 399 F.Supp. 1397 (Jud.Pan.Mut.Lit.1975) (Freedman); 405 F.Supp. 1404 (Jud.Pan. Mult.Lit.1975) (Hudson). This litigation has been denominated MDL-201A.

MDL-201A evolved when the Panel considered transfer of the Freedman action from the Eastern District of Pennsylvania as a tag-along action to the litigation in the Northern District of California. Plaintiffs in Freedman purported to sue on behalf of a class of all persons located throughout the country who manufacture products for resale which use sugar as a component. Twenty-six defendants were named in Freedman, nine of whom were defendants in the litigation before Judge Boldt and seventeen of whom were new defendants.² The Panel decided to leave Freedman in the Eastern District of Pennsylvania, subject to plaintiffs' implementation of their proposal to dismiss their claims against the eight Western Defendants.³ The Panel's decision was also subject to plaintiffs' implementation of their proposal to amend the class allegation to include only commercial sugar purchasers in the Eastern portion of the United States, and not to initiate discovery against any of the Western defendants or their employees, with the exception of individuals who worked for an Eastern defendant during the time of alleged conspiracy and who now are employed by a Western defendant. The Panel reasoned as follows:

We recognize that the dual aspects of this litigation are not totally disparate, especially in light of Amstar's nationwide role in the sugar industry. Nevertheless, we believe that the east-west distinction has enough probability of continuation and is presently substantial enough to justify bifurcated pretrial proceedings. The difference between defendants, market areas and economic and conspiratorial issues is significantly preponderant. In addition, the overall convenience of the parties and witnesses would not be served by transfer because the solely Eastern defendants, their witnesses and relevant documents are located in the eastern United States. Moreover, discovery is advancing expeditiously in Freedman under the supervision of the Honorable Edward N. Cahn. Furthermore, we are confident that Judges Boldt and Cahn will, in their mutual discretion, coordinate the pretrial proceedings between Freedman and the litigation in California whenever such coordination becomes necessary. For example, regarding Amstar in particular, we hope that the parties and the judges will design a joint pretrial program that will minimize any unnecessary inconvenience to Amstar itself and all other parties as well.

We stress that our decision to leave this action in the Eastern District of Pennsylvania rests on our appraisal that plaintiffs' proposal will eliminate the possibility that any party, except Amstar, will be subjected to duplicative discovery. Our decision, therefore, is without prejudice to the right of any party to move for transfer at a later date if it feels future circumstances so require. In re Sugar Antitrust Litigation, 399 F.Supp. 1397, 1399-1400 (Jud.Pan.Mult.Lit.1975).

Subsequent to the transfer of Freedman, the Hudson action was filed in the District of South Carolina by three local plaintiffs, not as a class action, against three defendants — Consolidated Foods, Corp., a Western defendant; Savannah Foods & Industries, Inc., an Eastern defendant; and Amstar, a defendant in both MDL-201 and MDL-201A. After noting that the plaintiffs in Hudson refused to take steps similar to those taken by the Freedman plaintiffs in order to maintain the east-west dichotomy, the Panel transferred the claims against Consolidated and Amstar to the Northern District of California and the claim against Savannah to the Eastern District of Pennsylvania. In re Sugar Industry Antitrust Litigation, 405 F.Supp. 1404 (Jud.Pan.Mult. Lit.1975).

As of August 1976, MDL-201A had grown to include eleven⁴ actions: Freedman, part of Hudson, a tag-along action transferred to the Eastern District of Pennsylvania from the District of Massachusetts by an unopposed conditional transfer order of the Panel, and eight tag-along actions originally filed in the Eastern District of Pennsylvania.

On October 21, 1976, Judge Cahn certified separate classes of industrial users, retail grocers and institutional users in the marketing area known in the sugar industry as the Eastern territory.

II. RECENT DEVELOPMENTS

On May 26, 1976, Waldorf Bakers, Inc., a manufacturer of retail bakery products, instituted an action in the Eastern District of Pennsylvania against six Western defendants, eight Eastern defendants, and Amstar, a defendant in both MDL-201 and MDL-201A. Similar to the other complaints in both MDL-201 and MDL-201A, the complaint in Waldorf alleges that defendants and unnamed co-conspirators unlawfully conspired to establish artificially the price of refined sugar. The relevant market in this complaint includes all states situated east of the Mississippi River⁵ and Puerto Rico. Plaintiff Waldorf seeks to represent a "national or regional class, as the court may determine, of persons or entities similarly situated, in the business of utilizing the sugar product complained of." The complaint in Waldorf alleges that the class consists of all individuals and entities located in the relevant market who are engaged in the baked products business and who purchased refined sugar for business purposes.⁶

In June 1976, four Western defendants moved the Panel for an order severing the claims asserted against them in Waldorf and transferring those claims to the Northern District of California for inclusion in the coordinated or consolidated pretrial proceedings in MDL-201. These defendants requested severance and transfer on the grounds that the claims asserted against them in Waldorf shared common questions of fact with those asserted in MDL-201, rather than those asserted in MDL-201A. In support of this motion were several Eastern defendants and all the plaintiffs other than Waldorf in MDL-201A. Plaintiff Waldorf opposed severance and transfer and also requested that the Panel reconsider its previous decisions resulting in bifurcated pretrial proceedings for this litigation and instead transfer all the actions involving the sugar industry to the Northern District of California.

Meanwhile, the Jordan action was filed in the Western District of Pennsylvania by an Eastern plaintiff who seeks to represent a class of retail grocers in the Eastern market. Like the plaintiff in Waldorf, this plaintiff also has named both Eastern and Western defendants. The complaint in Jordan, however, alleges a national conspiracy. In response to a letter by defendant Consolidated to the Panel suggesting transfer of Jordan to a single forum for inclusion in Section 1407 proceedings, plaintiff Jordan urged the Panel to reconsider its initial decision to bifurcate the Eastern sugar actions from their Western counterparts. Although Consolidated did not state in its letter its preference of a transferee forum for this action, Jordan assumed that Consolidated sought to sever and transfer the claims asserted in Jordan against Western defendants to the Northern District of California because this was Consolidated's position concerning the Waldorf action.

About the same time as these events were occurring with respect to Waldorf and Jordan, additional actions were being filed elsewhere. The complaint in the A & P Bakery action, pending in the Southern District of Florida, seeks a class composed of all wholesalers in the Eastern market, alleges a solely Eastern conspiracy, but names defendants involved in MDL-201 and MDL-201A, as...