In re Urethane Antitrust Litig.

• Citation: 913 F.Supp.2d 1145
• Decision Date: 18 December 2012
• Docket Number: MDL No. 1616.,Case No. 04–1616–JWL.
• Parties: In re: URETHANE ANTITRUST LITIGATION. This document relates to: The Polyether Polyol Cases.
• Court: U.S. District Court — District of Kansas

913 F.Supp.2d 1145

In re: URETHANE ANTITRUST LITIGATION.

This document relates to: The Polyether Polyol Cases.

MDL No. 1616.

Case No. 04–1616–JWL.

United States District Court,

D. Kansas.

Dec. 18, 2012.

George A. Hanson, Norman E. Siegel, Stueve Siegel Hanson LLP, W. Joseph Hatley, Spencer Fane Britt & Browne LLP, Kansas City, MO, Rex A. Sharp, Gunderson Sharp & Walke, LLP, Prairie Village, KS, Roy Morrow Bell, Troutman Sanders LLP, San Diego, CA, Steven A. Kanner, Freed Kanner London & Millen, LLC, Bannockburn, IL, Susan G. Kupfer, Glancy Binkow & Goldberg LLP, San Francisco, CA, W. Joseph Bruckner, Yvonne M. Flaherty, Lockridge Grindal Nauen, PLLP, Minneapolis, MN, for Urethane Antitrust Litigation.

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM, District Judge.

In this multi-district class action, plaintiffs allege that remaining defendant Dow Chemical Company (“Dow”) conspired with other manufacturers to fix prices for certain urethane chemical products in violation of the Sherman Act, 15 U.S.C. § 1. This matter presently comes before the Court on Dow's motion for summary judgment (Doc. # 2402). For the reasons set forth below, the Court denies the motion for summary judgment in its entirety.¹

I. Background

In this litigation, the Court has consolidated two sets of cases relating to different types of urethane products: the Polyester Polyol cases, which have settled; and the Polyether Polyol cases, to which this order relates.

In the Polyether Polyol class actions, plaintiffs originally brought suit against Dow and various entities affiliated with Dow's competitors, namely Bayer, BASF, Huntsman, and Lyondell. The Court subsequently certified a class of plaintiffs who purchased certain urethane products (generally known as MDI, TDI, other polyether polyols, and systems based on those products) in the United States from those defendants at any time from January 1, 1999, to December 31, 2004. The class plaintiffs have settled their claims against Bayer, BASF, Huntsman, and Lyondell, leaving Dow as the only remaining defendant. In addition, in two separate actions that were consolidated with this class action for pretrial purposes, various direct action plaintiffs that have opted out of the class assert similar price-fixing claims against Dow (having also settled with the other original defendants).

Class plaintiffs now allege a price-fixing conspiracy involving Dow and the other original defendants (referred to collectively as “defendants” or the alleged conspirators) encompassing the years from 1999 to 2003 (a shorter period than the period used to define the class). Dow seeks summary judgment on all claims asserted against it by class plaintiffs.

II. Summary Judgment Standards

Summary judgment is appropriate if the moving party demonstrates that there is “no genuine dispute as to any material fact” and that it is “entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). In applying this standard, the Court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Burke v. Utah Transit Auth. & Local 382, 462 F.3d 1253, 1258 (10th Cir.2006). An issue of fact is “genuine” if “the evidence allows a reasonable jury to resolve the issue either way.” Haynes v. Level 3 Communications, LLC, 456 F.3d 1215, 1219 (10th Cir.2006). A fact is “material” when “it is essential to the proper disposition of the claim.” Id.

The moving party bears the initial burden of demonstrating an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Thom v. Bristol–Myers Squibb Co., 353 F.3d 848, 851 (10th Cir.2003) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). In attempting to meet that standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party's claim; rather, the movant need simply point out to the court a lack of evidence for the other party on an essential element of that party's claim. Id. (citing Celotex, 477 U.S. at 325, 106 S.Ct. 2548).

If the movant carries this initial burden, the nonmovant may not simply rest upon the pleadings but must “bring forward specific facts showing a genuine issue for trial as to those dispositive matters for which he or she carries the burden of proof.” Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir.2005). To accomplish this, sufficient evidence pertinent to the material issue “must be identified by reference to an affidavit, a deposition transcript, or a specific exhibit incorporated therein.” Diaz v. Paul J. Kennedy Law Firm, 289 F.3d 671, 675 (10th Cir.2002).

Finally, the Court notes that summary judgment is not a “disfavored procedural shortcut;” rather, it is an important procedure “designed to secure the just, speedy and inexpensive determination of every action.” Celotex, 477 U.S. at 327, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 1).

III. Existence of a Price–Fixing Conspiracy

A. Governing Standards

Section 1 of the Sherman Act declares illegal “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade.” 15 U.S.C. § 1. In this case, class plaintiffs allege a horizontal price-fixing conspiracy involving Dow and the other defendants in violation of Section 1. See Cayman Exploration Corp. v. United Gas Pipe Line Co., 873 F.2d 1357, 1360 n. 3 (10th Cir.1989)(horizontal price-fixing as constituting a per se violation of the Sherman Act) (citing United States v. Socony–Vacuum Oil Co., 310 U.S. 150, 223–24, 60 S.Ct. 811, 84 L.Ed. 1129 (1940)). To prove such a claim, a plaintiff must show (1) the existence of an agreement, combination, or conspiracy, (2) among actual competitors (3) with the purpose or effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity (4) in interstate or foreign commerce. Id. at 1361. In seeking summary judgment, Dow challenges the sufficiency of class plaintiffs' evidence of the existence of a conspiracy or agreement involving Dow to fix prices for these urethane products.

The parties dispute somewhat the proper standard to be applied by the Court in evaluating whether plaintiffs have submitted evidence of the existence of a conspiracy sufficient to survive summary judgment. In general, the traditional summary judgment standards apply in antitrust cases. See Abraham v. Intermountain Health Care Inc., 461 F.3d 1249, 1257 (10th Cir.2006). To survive summary judgment, plaintiffs must show the existence of an agreement by direct or circumstantial evidence. See Champagne Metals v. Ken–Mac Metals, Inc., 458 F.3d 1073, 1082 (10th Cir.2006).

Direct evidence in a Section 1 conspiracy must be evidence that is explicit and requires no inferences to establish the proposition or conclusion being asserted. With direct evidence the fact finder is not required to make any inferences to establish facts.

Id. at 1083 (quoting In re Baby Food Antitrust Litig., 166 F.3d 112, 118 (3d Cir.1999)). Not all direct evidence of an agreement, however, establishes the existence of a disputed fact: “Where ... a plaintiff adduces only weak direct evidence, which by itself is insufficient to defeat summary judgment, additional circumstantial evidence is required to overcome a motion for summary judgment.” See id. at 1084 (direct evidence of agreement in that case was weak because particular parties to the agreement were not identified). The ultimate test is whether the plaintiff presented facts such that a reasonable jury could find in its favor. See id.

A conspiracy may also be proved by circumstantial evidence.

While consciously parallel behavior may contribute to a finding of antitrust conspiracy, it is insufficient, standing alone, to prove conspiracy. Such parallel behavior may, however, support the existence of an illegal agreement when augmented by additional evidence from which an understanding among the parties may be inferred. Such evidence may include a showing that the parties are acting against their own individual business interests, or that there is motivation to enter into an agreement requiring parallel behavior. Mere exchanges of information, even regarding price, are not necessarily illegal, in the absence of additional evidence that an agreement to engage in unlawful conduct resulted from, or was a part of, the information exchange.

Mitchael v. Intracorp, Inc., 179 F.3d 847, 858–59 (10th Cir.1999) (citations and internal quotations omitted).

Dow cites standards applied by the Supreme Court in reviewing a summary judgment granted in a price-fixing case in Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The Court stated:

Respondents correctly note that on summary judgment the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. But antitrust law limits the range of permissible inferences from ambiguous evidence in a § 1 case. Thus, in Monsanto Co. v. Spray–Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984), we held that conduct as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy. Id. at 764, 104 S.Ct. 1464. To survive a motion for summary judgment or for a directed verdict, a plaintiff seeking damages for a violation of § 1 must present evidence “that tends to exclude the possibility” that the alleged conspirators acted independently. 465 U.S. at 764, 104 S.Ct. 1464. Respondents in this case, in other words, must show that the inference of conspiracy is reasonable in light of the competing inferences of independent action or collusive action that could not have harmed respondents.

Id. at 587–88, 106 S.Ct. 1348 (additional citations omitted). The Court found in that case that the theory of the alleged conspiracy was not economically plausible, and thus that the...