In re Vitamins Antitrust Litigation

• Decision Date: 07 July 2003
• Docket Number: No. 1:99-544.,No. 00-1236.,No. MDL 1285.,No. 99-197 (TFH),No. 00-547.,99-197 (TFH),MDL 1285.,00-1236.,00-547.,1:99-544.
• Citation: 270 F.Supp.2d 15
• Parties: In re: VITAMINS ANTITRUST LITIGATION Archer Daniels Midland v. F. Hoffman-Laroche, Ltd., et al. Hill's Pet Nutrition v. F. Hoffman-Laroche, Ltd., et al. Animal Science Products, Inc. v. Chinook Group, Ltd., et al.
• Court: U.S. District Court — District of Columbia

270 F.Supp.2d 15

In re: VITAMINS ANTITRUST LITIGATION

Archer Daniels Midland v. F. Hoffman-Laroche, Ltd., et al.

Hill's Pet Nutrition v. F. Hoffman-Laroche, Ltd., et al.

Animal Science Products, Inc. v. Chinook Group, Ltd., et al.

No. 99-197 (TFH)

No. MDL 1285.

No. 00-1236.

No. 00-547.

No. 1:99-544.

United States District Court, District of Columbia.

July 7, 2003.

COPYRIGHT MATERIAL OMITTED

MEMORANDUM OPINION

THOMAS F. HOGAN, Chief Judge.

Re: Cope Investments Motions to Dismiss

Pending before the Court are the motions of defendant Cope Investments Limited ("Cope") to dismiss it as defendant from the Archer Daniels Midland v. F. Hoffman-Laroche and Hill's Pet Nutrition v. F. Hoffman-Laroche actions pursuant to Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction.¹ Also pending before the court are the motions of defendants Cope, Chinook Group Limited, Chinook Group, Inc., Peter Copland and Patrick Stayner ("Chinook Defendants") from the Animal Science Products v. Chinook Group, Ltd. Class Action pursuant to Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction,² and Class Plaintiffs' Motion to Sever and Transfer to Minnesota Claims Against the Chinook Defendants pursuant to Fed.R.Civ.P. 21 and 28 U.S.C. §§ 1404(a) and 1406(a).³ Upon careful consideration of each of the foregoing motions, oppositions, replies, and the entire record herein, the Court will deny the defendants' Motions with respect to the Archer Daniels Midland v. Chinook Group, Ltd. and Hill's Pet Nutrition v. F. Hoffman-Laroche Ltd. actions, and grant Class Plaintiffs Motion with respect to the Animal Science, v. Chinook Group, Ltd. Class Action, rendering the Chinook Defendants' Motion to Dismiss moot.

I. BACKGROUND

Cope is a limited liability corporation organized and registered in Toronto, Canada, and is the sole stockholder of defendant Chinook Group Limited, also a Canadian corporation. Chinook Group Limited is the successor in interest to Chinook Group, an Ontario limited partnership, and in turn is sole shareholder of Chinook Group, Inc., a Minnesota corporation. Chinook Group Limited and Chinook Group, Inc. manufacture and sell Choline Chloride. Further, Chinook Group Limited has pled guilty to price-fixing or other antitrust violations of its predecessor in interest.

Peter Copland ("Copland") is one of the principal shareholders of Cope, served as President and Chairman of the Board of Cope, and has received paychecks from Cope since 1981. He was also Principal and Chief Executive Officer of Chinook Group, Ltd., and President of Chinook Group, Inc. William Patrick Stayner ("Stayner") is similarly one of the principal shareholders of Cope, served as a director on the board of Cope, and has been paid by Cope since 1981. During the period in question, Stayner was also Vice President of Finance for several of the Chinook entities, including Cope, Chinook Group, Ltd., and Chinook Group, Inc., and served as Secretary of Cope.

Two of the motions to dismiss presently at issue pertain to individual actions filed in Illinois and Kansas, and concern jurisdiction over the Cope entity. Cope argues that it is not subject to the jurisdiction of this Court because it lacks sufficient contacts with the forum states or any United States forum, and because proceeding.with this action would violate the Due Process Clause of the United States Constitution. Plaintiffs respond that Cope is subject to jurisdiction in the forum states under a number of jurisdictional theories, including specific jurisdiction under the Clayton Act through the activities of its subsidiaries in the relevant fora, conspiracy theory jurisdiction, the effects test theory of jurisdiction, and with respect Kansas, jurisdiction under the state's long-arm statute.

The third motion to dismiss pertains to the Class Action filed in the District of Columbia, and relates to Cope, Chinook Group Limited, Chinook Group, Inc., Peter Copland and Patrick Stayner ("the Chinook Defendants"). The Chinook Defendants argue that they are not subject to the jurisdiction of this Court due to insufficient contacts with the District of Columbia. Class Plaintiffs do not dispute the lack of jurisdiction over the Chinook Defendants in the District of Columbia, but instead respond with a Motion to Sever and Transfer Claims to the District of Minnesota, the fourth motion presently at issue. Class Plaintiffs argue that all of the Chinook Defendants are subject to jurisdiction in the District of Minnesota under the Clayton Act, conspiracy theory jurisdiction, and the Minnesota long arm statute, and that severance and transfer are in the interests of justice. The Chinook Defendants respond that there are no grounds for jurisdiction in Minnesota over Cope, or over individual defendants Copland and Stayner. The Chinook Defendants do not contest Minnesota's jurisdiction over Chinook Group, Inc. or Chinook Group, Limited, and further concede the Class Plaintiffs right to sever actions against them. However, the Chinook Defendants further oppose the motion on the grounds that it would constitute a misuse of transfer provisions under sections 1404(a) and 1406(a).

II. DISCUSSION

A. Personal Jurisdiction

This Court has previously described the basic theories of personal jurisdiction in its Memorandum Opinion Re: UCB Motion to Dismiss ("UCB Opinion"), which addressed jurisdiction over UCB S.A. under most of the theories advanced in the current motions and will be referred to throughout. See Mem. Op. Re: UCB Mot. to Dismiss, October 30, 2001 ("UCB Op."). Personal jurisdiction over a defendant may either be found through general or specific jurisdiction. Id. at *2. General jurisdiction arises from a party's contacts with the forum that are unrelated to the particular claims in the litigation. Id. (citing Helicopteros Nacionales de Colombia S.A v. Hall, 466 U.S. 408, 414-17, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). To establish general jurisdiction, Class Plaintiffs must demonstrate that the defendants have had "continuous and systematic" general business contacts with the respective multidistrict litigation fora. Id. By contrast, specific jurisdiction attaches over a nonresident corporate or individual defendant solely for causes of action arising from the defendant's contacts with that forum. Id. (citing Helicopteros, 466 U.S. at 414-17, 104 S.Ct. 1868).

With respect to the corporate defendant, Cope, the Court has addressed many of the arguments regarding jurisdiction over corporate parents of domestic subsidiaries advanced by plaintiffs in its Opinion with regard to the Court's jurisdiction over UCB. See UCB Op. at 2. As was true with respect to UCB, plaintiffs do not rely on Cope's direct contacts with the relevant fora to establish specific jurisdiction over this corporate defendant. Instead, plaintiffs argue that actions of Cope and its subsidiaries together are sufficient to establish specific personal jurisdiction on multiple bases, including: (1) Section 12 of the Clayton Act; (2) the conspiracy theory of jurisdiction; (3) the effects test; and (4) the Kansas and Minnesota long-arm statutes. See Hill's Pet Opp'n at 9-16; ADM Opp'n at 11-18.

With respect to individual defendants Copland and Stayner, plaintiffs argue that the defendants' business contacts with Minnesota are sufficient to establish personal jurisdiction, again on multiple bases, including: (1) Section 12 of the Clayton Act; (2) the conspiracy theory of jurisdiction; and (3) the Minnesota longarm statute.

Severance and transfer of Class Plaintiffs' claims to the District of Minnesota would require a finding that personal jurisdiction may be had over the Chinook Defendants in that forum. See discussion, § II.B, below. The Court will therefore consider personal jurisdiction over the defendants in the District of Minnesota along with its analysis of personal jurisdiction in Illinois and Kansas.

Plaintiffs must establish personal jurisdiction over both the corporate and individual defendants in each of the fora by a preponderance of the evidence as jurisdictional discovery has been completed. See UCB Op. at 3 (citing Shapiro Lifschitz & Schram, P.C. v. Hazard, 24 F.Supp.2d 66, 70 (D.D.C.1998)).⁴

1. Section 12 of the Clayton Act

Section 12 of the Clayton Act provides that "[a]ny suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found." 15 U.S.C. § 22. In this case, plaintiffs contend that Cope transacted business in Illinois, Kansas, and Minnesota through the activities of its United States subsidiaries. Plaintiffs further contend that Copland and Stayner, acting as co-conspirators on behalf of their employers, had numerous contacts with Cope's Minnesota-based subsidiary.

a. Copland and Stayner:

Referring to the Court's ruling with respect to UCB, Class Plaintiffs contend that Copland's and Stayner's business contacts with the Chinook Group, Inc. Minnesota offices and their participation in conspiracy meetings provide a basis for personal jurisdiction over them under Section 12 of the Clayton Act. However, a distinction is made between personal jurisdiction over a foreign individual and a foreign corporation in antitrust actions. United Phosphorus, Ltd, v. Angus Chemical Co., 43 F.Supp.2d 904, 911 (N.D.Ill.1999) (finding that other jurisdictional theories must be applied); Catrone v. Ogden Suffolk Downs, Inc., 647 F.Supp. 850, 855-56 (D.Mass. 1986) (applying Federal Rule of Civil Procedure 4(K)(2)). By its own terms, Section 12 of the Clayton Act is directed only at "corporation[s]" and not at individuals. 15 U.S.C. § 22. Other courts reaching this question have noted that the service of process provisions under Rule 4 of the Federal Rules of Civil...