A federal judge has declared a defense expert the winner in a battle of the experts over class certification in a suit alleging price-fixing conspiracies in the markets for plastics additives.

Relying heavily on expert testimony, U. S. District Court Judge Legrome D. Davis for the Eastern District of Pennsylvania has denied plaintiffs’ motion to certify a class of direct purchasers of organotin heat stabilizers (“tins”) and epoxidized soybean oil (“ESBO”) –  plastics additives used in the manufacture of polyvinyl chloride (“PVC”) – in the case of In re: Plastic Additives Antitrust Litigation.

The decision is a victory for defendants Dow Chemical Co., Union Carbide Corp., Rohm & Haas Co. and Arkema Inc., who argued that their economics expert had demonstrated flaws in the plaintiffs’ case showing that the announcements of price increases bore little or no relation to the actual prices paid by the purchasers.

The legal basis for the court’s decision was that plaintiffs failed to establish that they could show impact by evidence common to the class.  The heart of the decision, however, was the court’s lambasting of the opinion of plaintiffs’ expert witness, Dr. John Beyer.

The ruling comes after the Third Circuit Court of Appeals vacated Judge Davis’ decision in 2006 granting certification of the class.  The case was remanded back to the district court for further proceedings consistent the Circuit’s 2008 decision in In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305 (3d Cir. 2008). 

When Judge Davis granted certification to class plaintiffs in 2006, he followed what he believed to be common practice of the time:  he declined to balance the credibility of the parties’ experts on the issue of the predominance of common evidence demonstrating antitrust impact.  But the Third Circuit’s 2008 decision in Hydrogen Peroxide up-ended what Judge Davis considered “common practice.”  On remand Judge Davis relied on language from Hydrogen Peroxide, explicitly affirming a district court’s obligation to consider all relevant evidence and arguments, including expert testimony.  Id. at 307.

Under this framework, Judge Davis evaluated and ultimately picked apart plaintiffs’ arguments that they can demonstrate antitrust impact by evidence common to the class, rather than individual to its members, and in particular Dr. Beyer’s opinion in support of these arguments. click here for more »

Europe’s highest court, the EU Court of Justice (ECJ), has upheld a fine of 85.8 million euros (approximately $100 million) against the German company Knauf Gips KG for participating in a plasterboard price-fixing cartel.

The cartel consisted of Knauf Gips KG, France’s Lafarge SA, Britain’s BPB Plc, and Belgium’s Gyproc Benelux.  The decision upholds part of the European Commission’s November 27, 2002, total fine of 478.32 million euros (approximately $605 million) imposed on the four companies. 

The fines stem from the cartel’s price-fixing of plasterboard for builders in Germany, Britain, France, Belgium, the Netherlands and Luxembourg between 1992 and 1998.  The Commission found that the companies implemented their cartel through a clandestine system that exchanged information and monitored the market to avoid competition.

A few weeks ago, on June 17, 2010, the ECJ upheld a fine of 249.6 million euros (approximately $300 million) against Lafarge for its role in the cartel.  As part of that decision, the ECJ found that the Commission had correctly doubled the fine against Lafarge based on Lafarge’s prior infringement of competition laws.

The Supreme Court of Canada has denied defendants leave to appeal from the British Columbia Court of Appeal’s certification decision in Pro-Sys Consultants Ltd. v Infineon Technologies AG – the DRAM price-fixing class action.

The B.C. Court of Appeal’s earlier decision certifying a class of direct and indirect purchasers of DRAMs (semiconductor memory chips also known as “dynamic random access memory”) remains therefore the definitive pronouncement on the law on class certifications in competition cases in Canada.  As previously discussed, the B.C. Court of Appeal’s decision lowered somewhat the threshold for class certification –allowing plaintiffs at the certification stage to show a “credible and plausible methodology” for addressing damages on a class-wide basis and finding that the certification judge had erred when he subjected plaintiff’s expert to “rigorous scrutiny.”

The B.C. Court of Appeal had found that it could be possible for plaintiffs to prove that the manufacturers benefitted from their wrongful conduct, and thus prove liability on a class-wide basis as a common issue.  The Court of Appeal had noted that guilty pleas to the conspiracy charges in the United States and manufacturers’ agreements to pay fines calculated as a function of the gross pecuniary gain they derived from the crime amounted to “admissions that they engaged in the wrongful conduct alleged by the appellant and that they obtained an unlawful benefit from that conduct.”

Time will tell whether the decision will result in more competition class action proceedings in Canada – a country where there have been very few contested competition class action certification hearings to date.

The Bundeskartellamt, Germany’s version of the U.S. Department of Justice Antitrust Division, has announced it is fining eight coffee roasters 30 million euros ($35.9 million) for illegally fixing the price of wholesale coffee sold to bulk customers such as restaurants and hotels.

Bundeskartellamt President Andreas Mundt spoke strongly about the need for antitrust regulation, saying that “cartels … are highly damaging to society and therefore have to be rigorously prosecuted” and noting that “coordinated price increases for consumer goods such as coffee have a direct impact on consumers’ wallets,”

The Bundeskartellamt is  assessing a fine for the German Coffee Association (GCA) and 10 employees.  The eight coffee roasters (Tchibo GmbH, Kraft Foods Außer Haus Service GmbH, J.J. Darboven GmbH & Co. KG, Melitta SystemService GmbH & Co. Kommanditgesellschaft, Luigi Lavazza Deutschland GmbH, Seeberger KG, Segafredo Zanetti Deutschland GmbH and Gebr. Westhoff GmbH & Co. KG) include local units of two U.S. companies, Kraft Foods Inc. and Luigi Lavazza SpA. 

According to the Bundeskartellamt’s investigation, from at least 1997 through mid-2008, a group of directors and sales managers at the roasters within the GCA coordinated price hikes and cuts – but mostly hikes – for roasted coffee supplied to restaurants, caterers, hotels, vending machine companies and other bulk consumers.

The Bundeskartellamt has a Leniency Programme, which allows for fines to be waived or reduced for cartel members who report price-fixing or cooperate.  It was a leniency filing from cartel member Alois Dallmayr Kaffee OHG that triggered the Bundeskartellamt’s investigation in the first place, and it has escaped a fine as a result.  Two other coffee makers – Melitta and Darboven – cooperated with the investigation and have apparently received reduced penalties as a result, though the amount of the fines for each cartel member have not been released.  The GCA has admitted liability and said it regretted the infringement in a separate statement.

German law allows the Bundeskartellamt  to fine member companies up to 10 percent of their revenues from the previous fiscal year if they uncover a cartel in the course of an investigation.  With the potential for such a mammoth fine, it is not surprising that six of the companies and their employees have already agreed to settle the regulator’s claims instead of fighting. 

This week’s activity is part of increased scrutiny the Bundeskartellamt has placed on the coffee industry in Germany in recent years.  Though this investigation has only been underway since 2009, the Bundeskartellamt already fined three of the coffee roasters (Tchibo, Melitta and Alois Dallmayr) and six of their employees approximately 159.5 million euros in December based on a similar price-fixing cartel in the retail sector that allegedly ran from early 2000 until July 2008.  A separate investigation into cappuccino makers based on similar price-fixing suspicions remains underway, and is expected to be completed soon.

While it may not really be always sunny in Philadelphia, it’s certainly a bright day for plaintiffs in the In re Processed Eggs Antitrust Litigation, who have announced that Land O’Lakes Inc. and two of its subsidiaries, Moark and Norco Ranch Inc., have agreed to settle the egg price-fixing case in the Eastern District of Pennsylvania for $25 million and a promise to cooperate in litigation against the remaining defendants.

Direct purchasers of shell eggs and egg products filed this class action in 2008 against several egg producers alleging that they participated in an industry wide price-fixing conspiracy.  They also allege that several egg trade associations, including United Egg Producers and United States Egg Marketers, coordinated the conspiracy.  The plaintiffs claim that the defendants conspired to restrict the egg supply through hen reductions, cage space requirements and exporting eggs at a loss which allegedly raised the price of eggs and egg products.

The plaintiffs previously settled with Sparboe Farms.  Remaining defendants include other egg producers such as Cal-Maine Foods Inc., Michael Foods Inc., and Rose Acre Farms.

The current settlement covers all direct purchasers of eggs and egg products since 2000 and is awaiting approval by the court.