A federal judge in Oregon has certified a class of fishermen in an antitrust lawsuit against Pacific Seafood Group, the nation’s largest seafood company.

The plaintiffs in Whaley et al. v. Pacific Seafood Group, et al. claim that defendants, Pacific Seafood and Ocean Gold Seafoods, Inc., used market shares of 50 to 70 percent to monopolize the Dungeness crab, Oregon coldwater shrimp, groundfish, and whiting seafood markets, and conspired to pay plaintiffs below-market prices for fish.

U.S. District Judge Owen M. Panner’s grant of class certification is a significant victory for plaintiffs alleging that commercial fishing vessel owners and fishermen were damaged by alleged anticompetitive practices of Pacific Seafood and Ocean Gold.

The defendants had argued that the numerosity requirement was not met and that there was insufficient harm alleged.  However, the attorneys for Pacific Seafood and Ocean Gold were unable to convince Judge Panner that the lawsuit did not merit class action status.

Included in the certified class are commercial vessel owners as well as fishermen who do not own vessels.  But Judge Panner decided against the inclusion of a subclass of fishermen who delivered Pacific whiting for onshore processing, stating that the proposed subclass was too small to satisfy the numerosity requirement of class certification.

The lawsuit stems from a 2006 agreement between Pacific Seafood and Ocean Gold.  Both companies claim that their partnership and practices only benefit the fleet, and that no matter how much market share they may command in the West Coast fishery, the companies are helping, not harming, the plaintiffs.

Alleging direct evidence of price fixing, plaintiffs argued that Pacific Seafood and Ocean Gold used their collective buying power to fix prices for fish and intimidate competitors who might otherwise offer more competitive prices to the plaintiffs.

In addition to seeking more than $500 million in damages, the plaintiffs are asking the court to break Pacific Seafood into smaller parts, sell off many of its assets in the processing industry, and nullify the contract between Pacific Seafood and Ocean Gold.

The Federal Trade Commission (“FTC”) has filed a complaint alleging price fixing against the three largest U.S. suppliers of ductile iron pipe fittings – Star Pipe Products, Ltd., McWane, Inc., and Sigma Corp.

The FTC alleges that these three competitors violated Section 5 of the Federal Trade Commission Act (“FTCA”) by conspiring to fix prices for ductile iron pipe fittings, which are used in municipal water systems around the United States.  The FTC’s complaint also charges McWane with illegally maintaining monopoly power in the market for domestically-produced pipe fittings.   Sigma has settled its claims via a consent decree, which does not include an admission of liability or monetary penalties. 

According to the FTC, “McWane invited Sigma and Star to collude with it” in 2008 by outlining a plan to raise and fix prices for imported iron pipe fittings.  The FTC alleges that the companies agreed, exchanged information through a trade association called the Ductile Iron Fittings Research Association (DIFRA), and subsequently raised their prices in January and June of 2008.

The FTC also alleges that McWane and Sigma entered into a separate anticompetitive agreement to restrain trade in the market for domestic pipe fittings.  In 2009, as part of the Stimulus Act, Congress allocated more than $6 billion to water infrastructure projects, with a mandate that only domestic materials – including pipe fittings – could be purchased with the stimulus dollars.  The FTC alleges that McWane illegally maintained monopoly power in this market for domestically-produced pipe fittings by successfully persuading Sigma to “abandon” its efforts to enter the market, agreeing instead to act as a distributor for such materials for McWane.

The proposed settlement order against Sigma would prohibit Sigma from a variety of anticompetitive activities relating to ductile iron pipe fittings, including: (1) participating in or maintaining any conspiracy to fix, raise, or stabilize the prices of these pipe fittings; (2) allocating or dividing markets, customers, or business opportunities for these pipe fittings; and (3) participating in or facilitating any agreement between competitors to exchange sales information or other competitively sensitive information relating to the price of these pipe fittings.  The proposed settlement order will be subject to public comment for 30 days, after which the FTC will decide whether to make the settlement order final.  The FTC is scheduled to make its final decision on February 6, 2012.

Although price fixing cases are more commonly prosecuted as criminal violations of the Sherman Act by the U.S. Department of Justice, Section 5 of the FTCA also provides the FTC with the power to bring such cases.  Although uncommon, there is some history of the FTC pursuing price fixing cases, such as the 2001 case against AOL Time Warner and Vivendi Universal for conspiring to fix prices of audio and video recordings of the “Three Tenors” concerts.

On December 9, Chief Judge Christina Reiss of the District of Vermont denied the plaintiff dairy farmers’ motion for class certification in Allen v. Dairy Farmers of America, Inc., 2011 WL 6148678 (D. Vt. Dec. 9, 2011).  However, Judge Reiss invited plaintiffs to renew their motion after addressing issues with their expert report. 

Plaintiffs are New York and Vermont dairy farmers.  Defendants are Dairy Farmers of America, Inc. (DFA) and Dairy Marketing Services LLC (DMS).  (Dean Foods was originally a defendant but it settled in May for $30 million.)  DFA is the largest dairy cooperative in the United States, and it not only produces, but also processes, markets and distributes raw Grade A milk.  DMS is a milk marketing agency allegedly created, owned and controlled by DFA and certain other cooperatives.  Some of the plaintiffs are members of DFA.  All of the plaintiffs have, at some point since 2002, sold their milk to processors through DMS. 

Plaintiffs sued DFA and DMS in October 2009 on behalf of all similarly situated dairy farmers in New York, Vermont and ten other Northeast states – an area designated by the USDA as “Federal Milk Market Order 1.”  Order 1 also is the relevant geographic market alleged by plaintiffs. 

Plaintiffs claim that defendants have conspired to fix and suppress the prices plaintiffs receive from cooperatives and processors for their raw Grade A milk, in violation of Sections 1 and 2 of the Sherman Act.  As damages, plaintiffs seek the amount they have been underpaid.  As injunctive relief, they seek to enjoin the alleged conduct and require divestiture of defendants’ processing plants.  

Judge Reiss evaluated plaintiffs’ motion under In re IPO, 471 F.3d 24 (2d Cir. 2006), which requires a “rigorous analysis” of the Rule 23 requirements and “enough evidence” that each of them has been met.  Where plaintiffs lost the motion was on Rule 23(a)(2)’s commonality requirement, specifically as to impact.  Commonality was satisfied as to “the formation, duration and implementation of the alleged conspiracy.”  However, as to adverse impact, Judge Reiss said there was “a clear failure of proof” with respect to plaintiffs’ expert report:  (1) adherence to opinions that plaintiffs had conceded were incorrect; (2) apparent use of incorrect prices in calculating damages; and (3) failure to consider the existence of either non-conspirator processing plants or class members who benefited or broke even from the alleged conduct. 

However, Judge Reiss also said that the expert analysis “may ultimately prove to be an acceptable means of analyzing causation and damages in this case,” though it is not “presently sufficient to perform this task because too many uncertainties remain . . . .”  Her other findings also indicate potential for success: Rule 23(a)(1) numerosity was satisfied, with 9,000 class members dispersed throughout several states.  Rule 23(a)(3) typicality was satisfied to the same extent as commonality, i.e., as to formation, duration and implementation but not adverse impact, for the same reasons as commonality.  And the 23(a)(4) adequacy of the named plaintiffs could be satisfied with subclasses represented by separate counsel, which would overcome the potential conflicts.  Given that prerequisite to certification, Judge Reiss declined to reach 23(a)(4)’s adequacy of class counsel.  She also declined to reach Rule 23(b)’s predominance requirement.

In light of the invitation to renew the class motion, defendants sought to extend their time to serve expert reports from December 16 until whenever plaintiffs serve their new report(s) (if they do).  Judge Reiss denied that motion, finding “no good cause to further delay the provision of expert reports in this ongoing litigation.”  No deadline has been set to renew the class motion.

Horizon Lines Inc., one of the largest ocean shipping companies in the United States, has entered into a $13.75 million settlement agreement with a group of shippers who had opted out of a class action against the company.

The shippers alleged that Horizon entered into a conspiracy with other carriers, including Sea Star Line, Crowley Maritime Corp. and Trailer Bridge Inc., to fix prices by increasing their rates to supracompetitive levels and by uniformly setting fuel surcharges for freight services between Puerto Rico and the U.S., which are largely controlled by the defendant carriers.

The case is In re: Puerto Rican Cabotage Antitrust Litigation, which was filed in 2008 in the United States District Court for the District of Puerto Rico.

Judge Daniel Dominguez dismissed the claims against Trailer Bridge, holding there was no evidence that it was involved in the price fixing conspiracy.  Horizon and the remaining carriers entered into a settlement with the class in 2009 for $52.25 million, which received final approval in September 2011. 

Several other shippers that had opted out of the class, including Home Depot and Wal-Mart, settled with Horizon earlier this year.

The settlement follows years of civil and criminal litigation.  In February, Horizon pled guilty to conspiring to fix prices and agreed to pay a $45 million fine which was lowered to $15 million to save the company from bankruptcy.  Sea Star agreed to pay a $14.2 million criminal fine in November.  Two former executives of Sea Star and three from Horizon also incurred fines and prison sentences.

The European Commission recently raided SKF AB, Schaeffler Group, and the offices of other European rolling bearings makers to investigate whether they violated European antitrust rules.

The companies manufacture bearings for the automotive and aerospace industries. 

The Commission is investigating whether the companies violated European Union (“EU”) laws prohibiting cartels and restrictive business practices by allegedly entering into agreements which fixed the prices for ball-bearings.  The Commission noted that the inspections are part of a preliminary investigation and do not mean that the companies have committed any anticompetitive behavior. 

SKF, the world’s largest rolling bearings manufacturer, said its offices in Gothenburg, Sweden and Schweinfurt, Germany were visited by EU Officials. 

SKF and Schaeffler are both cooperating with the investigation.