The opinion of the court was delivered by: THOMAS HOGAN, Chief Judge, District
Re: Defendants' Motions for Summary Judgment
on the Issue of an "All-Vitamins Conspiracy"
Pending before the Court are five defendants' motions*fn1
summary judgment seeking judgment on the issue of the scope of the
conspiracy pursuant to Fed.R.Civ.P. 56. Upon careful consideration of
the parties' briefs, arguments presented, and the entire record herein,
Court grants for certain Defendants and denies for one Defendant
motions for summary judgment on Plaintiffs' "all-vitamins conspiracy"
This case stands at the heels of one of the largest criminal antitrust
investigations ever undertaken by the United States Department of
Justice. To date, the Antitrust division of the Department of Justice has
prosecuted 30 cases and gathered well over $875 million in criminal fines
relating to the international vitamins cartel.*fn2 This vitamins cartel
enacted one of the most elaborate and wide-spread conspiracies ever
prosecuted by the United States Department of Justice.*fn3
The case before this Court is equally formidable. As of a few months
ago, the consolidated action before the Court involved 55 separate
multiparty lawsuits from 32 different federal courts. The enormity and
complexity of this case can be seen through the fact that over 1,000
opinions and rulings have been issued by the Court in this case.
Furthermore, well over 100 law firms participated in the preparation of
over 10,000 separate filings that have been lodged in this matter to
date. This opinion addresses five of the motions that have been filed in
Plaintiffs allege that Defendants, along with their co-conspirators,
conspired to artificially inflate the price of certain vitamins and
vitamin products, allocate shares of the vitamin market,
predetermine sales volume in the vitamin industry, eliminate
competition from non-co-conspirators, limit supply, and allocate
specific customers among themselves and their co-conspirators in the
following vitamin markets: Vitamin A, Vitamin B1 (Thiamine), Vitamin B2
(Ribloflavin), Vitamin B3 (Niacin), Vitamin B4 (Choline Chloride),
Vitamin B5 (CalPan), Vitamin B6 (Pyridoxine), Vitamin B9 (Folic Acid),
Vitamin B12, Vitamin C, Vitamin D, Vitamin E, Vitamin H (Biotin),
Astaxanthin, Beta Carotene, Canthaxonthin, Apocarotenal, and vitamin
premix, in violation of Section 1 of the Sherman Act. See, e.g., Second
Am. Compl. for Antitrust Violations, Blue Seal Feeds, Inc., et al., v.
BASF A.G., et al., ¶¶ 1, 121-135. This alleged conspiracy between the
sellers of the various vitamins listed above is referred to as the
all-vitamins conspiracy. The issue before the Court is the viability of
Plaintiffs' alleged all-vitamins conspiracy.
As mentioned above, the procedural history in this case is quite
extensive, and a brief review of the pertinent parties and pleadings
affecting this morion is warrented. On or shortly before August 6, 2002,
various Defendants filed forty-nine (49) motions with the court, while
various Plaintiffs filed two dispositive motions. Of the forty-nine
dispositive defense motions, twenty-two related to "scope of the
conspiracy" defenses. Of those twenty-two motions, sixteen of them
specifically addressed Plaintiffs' alleged all-vitamins conspiracy.
On November 21, 2002, the Court heard oral argument on the all-vitamins
conspiracy motions. Since that time, many individual cases have been
resolved. The all-vitamins conspiracy motions that remain pending are
#11, #13, #14, #16, and #17 (as numbered in the chart submitted by
Dickstein, Shapiro, Morin & Oshinsky, LLP under cover of its August
14, 2002 letter to the Court). These motions were filed by the following
Bioproducts, DuCoa and DCV, DuPont, Chinook, and UCB.
Two separate moving papers have been filed on behalf of each Defendant:
first, Defendants collectively filed Certain Defendants' Joint Memorandum
of Law in Support of Summary Judgment on Plaintiffs' All-Vitamins
Conspiracy Claim ("Defs.' Mem."); second, each Defendant filed an
individual motion and reply brief on their own behalf.*fn4 Plaintiffs
submitted two primary documents in opposition to Defendants' motions for
summary judgment: first, Certain Plaintiffs' Joint Opposition to Certain
Defendants' Joint Memorandum of Law in Support of Summary Judgment on
Plaintiffs' All-Vitamins Conspiracy Claims (the "PJO"); second,
Plaintiffs' Joint Counterstatement of Facts in Opposition to Defendants'
Motions for Summary Judgment Regarding the Fact and Scope of the
Conspiracy, Fraudulent Concealment, and Subsidiary Liability (the "PJC").
Plaintiffs also filed individual opposition papers against specific
Two groups of cases remain. Some cases against Defendants will be
remanded to their original jurisdictions, while others will remain in
this Court for trial.*fn6
The following is a breakdown of the remaining
cases pending against each Defendant:
Bioproducts: (1) Class action plaintiffs'*fn7
cases to tried in Minnesota*fn8
(2) Direct action plaintiffs'*fn9
cases to be remanded
DuCoa: (1) Direct action plaintiffs' cases to be
DuPont: (1) Direct action plaintiffs' cases to be
Chinook: (1) Class action plaintiffs' cases to be
tried in Minnasota
(2) Direct action plaintiffs' cases to be
UCB: (1) Hill's Pet Nutrition cases to be remanded
All parties agree that the instant motion is to be decided before these
cases are remanded to their original filing jurisdictions.
There are three UCB defendants: UCB, S.A.; UCB, Inc.; and UCB Chemicals
Corporation. UCB, S.A. is a Belgium-based company that produces and sells
prescription pharmaceuticals, high performance film and packaging
materials, and specialty chemical
products. The Chemical Sector of UCB, S.A., which is involved in
the production and sale of specialty chemical products, manufactures and
sells choline chloride. UCB, Inc. is a subsidiary of UCB, S.A. located in
the United States, and UCB, Inc. is a holding company that offers support
services to its subsidiaries. UCB, Inc. never manufactured or sold
choline chloride. UCB Chemicals Corporation is a subsidiary of UCB, Inc.
and is also located in the United States. UCB Chemicals Corporation
manufactures and markets specialty chemicals. UCB Chemicals Corporation
did not manufacture choline chloride during any of the conspiracy periods
but did sell choline from 1999-2001. UCB Mem. in Support Mot. Summ. J.
("UCB Mem.") at 3-5.
UCB asserts that it did not manufacture or sell any vitamins other than
choline chloride during the alleged conspiracy period, and did not
participate in the markets for any of the non-choline vitamins during
the conspiracy period. Id.
There is one DuPont defendant: E.I. DuPont De Nemours and Company. E.I.
DuPont De Nemours and Company is a world-wide "science company" that
"deliver[s] science-based solutions in markets such as food and
nutrition, health care, apparel, home and construction, electronics and
transportation." DuPont Statement of Undisputed Material Facts In Supp.
Mot. For Partial Summ. J. On All-Vitamins Conspiracy ¶ 2. DuPont is
headquartered in Wilmington, Delaware. Id. DuPont's "sole
connection" to this case is its "former ownership interest in a joint
venture business, DuCoa, that manufactured choline chloride." DuPont Mem.
in Support of Mot. For Partial Summ. J. On the Issue of an All-Vitamins
Conspiracy at 1.
According to DuPont, Plaintiffs have attempted to establish two
connecting points that
render DuPont liable in the all-vitamins conspiracy. First,
Plaintiffs have alleged that DuPont "participated" in a choline
conspiracy, which is part of a larger conspiracy through the "alleged
participation in a choline chloride conspiracy by Dr. Earnie Porta, a
one-time DuPont employee and later, President of DCV, Inc." Id.
at 20. Second, Plaintiffs assert that DuPont's status as a general
partner in the joint venture, DuCoa, for a period of time in the late
1980s until the early 1990s renders it liable. Id. DuPont
claims that it "did not manufacture, distribute or sell choline
chloride," or any other vitamin at issue in the all-vitamins conspiracy.
DuPont Statement of Undisputed Material Facts In Supp. Mot. For Partial
Summ. J. On All-Vitamins Conspiracy ¶ 3.
There are two DuCoa defendants: DuCoa, L.P. and DCV, Inc. In December
1986, DuPont and ConAgra formed DuCon, a general partnership joint
venture, in order to manufacture choline chloride. DuPont Statement of
Undisputed Material Facts In Supp. Mot. For Partial Summ. J. On
All-Vitamins Conspiracy ¶ 4. DuCon changed its name to DuCoa on
October 1, 1991. Id. at ¶ 5. On December 31, 1992, DuCoa
was converted to a limited partnership with DuPont and ConAgra as limited
partners and DCV, Inc., a newly formed Delaware corporation, as the
general partner. Id. Among the fourteen different partnerships
organized under the umbrella of DCV, Inc., only DuCoa was involved in the
manufacture and sale of choline chloride. Plaintiffs contest the accuracy
of DuCoa's formation in that an insufficient record was provided by DuCoa
in support thereof. Pls.' Opp'n. to Defs.' Statement of Facts Which
Precludes Entry of Summ. J. on DuCoa, L.P. and DCV Inc.'s Mot. Summ. J.
DuCoa (originally as DuCon) began manufacturing choline chloride in
December 1987. DuCoa manufactured choline chloride from December
1987 through June 1, 2001. DuPont Statement of Undisputed Material Facts
in Supp. Mot. Partial Summ. J. at ¶ 5-6. On June 1, 2001, DuCoa's
choline business was sold as part of a package of businesses to Balchem.
Id. In 1995, DuCoa began buying and reselling various
"Vitamins"*fn10 and blending and selling premix. Id. at ¶
There is one Bioproducts Defendant: Bioproducts, Inc. Bioproducts is a
wholly-owned subsidiary of Mitsui*fn11 located in Fairlawn, Ohio.
Bioproducts manufactured choline and vitamin premixes. Pls.' Joint
Counterstatement of Facts in Opp'n to Defs.' Mots. Summ. J. ("PJC") ¶
38. Bioproducts manufactured and sold feed-grade choline chloride during
the conspiracy periods alleged by Plaintiffs. Bioproducts' Mem. Supp.
Mot. Summ. J. at 2. Bioproducts maintains that it did not manufacture or
sell any vitamins other than choline chloride during the conspiracy
periods alleged by Plaintiffs. Id.
There are two Chinook defendants: Chinook Group Limited and Chinook
Group, Inc. Chinook Group Limited is a corporation organized under the
laws of Ontario, Canada, with its principal place of business in Sombra,
Ontario. Chinook Mot. Summ. J. Ex. A (Aff. of Dean Lacy). Chinook Group,
Inc. is a Minnesota corporation that is wholly-owned by its Canadian
parent, Chinook Group Limited. Chinook Mot. Summ. J. on All-Vitamins
Conspiracy at 2.
Chinook Group Limited manufactures and sells choline chloride which is
produced at its plants in Canada. Chinook Group, Inc. provided a "toll"
manufacturing service to Chinook Group Limited (formerly known as Chinook
Group) from 1988 through 1998, converting aqueous choline chloride into
dry choline chloride. Id.
Neither Chinook Group Limited nor Chinook Group, Inc. manufactured or
sold any vitamin product, nor any products that could be used as
ingredients in any vitamin product, other than choline chloride.
Defendants are all manufacturers of choline chloride, also known as
Vitamin B4, more commonly known as "choline." Choline is a nutritional
supplement used primarily in animal feed. Choline is synthesized from
three chemical products: trimethylamines, ethylene oxide, and
hydrochloric acid. During the relevant time period, all of the choline
chloride manufacturers made at least one of the raw materials needed to
manufacture choline. Pls.' Mem. Opp'n. UCB's Mot. Summ. J. at 5.
Defendants differentiate choline from other vitamins because choline
(1) is produced through a process using largely different raw materials
than other vitamins, and (2) there are no
substitutes for choline (and, conversely, choline is not a
substitute for any other vitamin). Defendants have even defined the term
"Vitamins" so as not to include choline chloride. See, e.g.,
UCB's Mem. Supp. Mot. Summ. J. at 2. Plaintiffs argue that this
"arbitrary" definition has been devised solely "to support [Defendants']
motions to sever choline from the rest of the conspiracy." Pls.' Mem.
Opp'n. UCB's Mot. Summ. J. at 5.
3. The Alleged "Ringleaders"
BASF Atkiengesellschaft, or BASF AG ("BASF"), is a corporation
organized and existing under the laws of Germany. BASF's principal place
of business is in Ludwigshafen, Germany. BASF Agreed Statement of Facts
(Fed. Ct. Canada) (Sept. 17, 1999). Among other things, BASF is involved
in the production and/or sale of oil and gas, bulk chemicals, plastics,
high performance chemical products, plant protection products, and
pharmaceuticals. BASF AG's Fine Chemicals Division produces and sells
vitamins. At one time, BASF was the second largest supplier of bulk
vitamins and carotenoids in the world. PJC at ¶ 7. From at least 1992
through 1995, BASF was one of the principal European manufacturers and
marketers of choline chloride. BASF Agreed Statement of Facts (Fed. Ct.
Canada) (Sept. 17, 1999). BASF is no longer a defendant in any active
litigation as BASF has settled all claims with Plaintiffs.
b. F. Hoffman-LaRoche Ltd
F. Hoffman-LaRoche Ltd ("Roche"), headquartered in Basel, Switzerland,
is one of the largest pharmaceutical and health groups in the world. PJC
at ¶ 1. At the time of the European Commission decision against Roche
(Nov. 21, 2001), Roche was the largest vitamin producer in the world,
controlling approximately 50% of the overall market. ECF ¶ 77.
operations account for approximately 8% of the corporation's
overall gross income. PJC ¶ 4.
c. Coordination of Activities
Although BASF and Roche are no longer parties to the instant motion,
both are critical to Plaintiffs' case. Plaintiffs theorize that both BASF
and Roche controlled the choline conspiracy. See, e.g., Pls.'
Slide Ex. at 19 ("Roche and BASF were joint leaders and instigators of
the collusive arrangements affecting the common range of vitamin products
they produced. . . ." (quoting ECF ¶ 712)).
BASF acknowledged to both Canadian and European authorities its
"pre-eminent role" in the global agreements. PJC at ¶ 344; BASF
Agreed Statement of Facts (Fed. Ct. Canada (Sept. 17, 1999)). BASF
provided several documents to the EC indicating its intent to fix prices
and allocate market shares in the choline chloride market. See,
e.g., BASF AG 0033336-55; BASF AG 003361-62; BASF AG 0033449-75;
BASF AG 0033477-79; BASF AG 0033480-33564; BASF AG 0033580-613. The
documents also indicate BASF's coordination of conspiracy activities with
The only direct link that Plaintiffs provide establishing Roche's
connection to the conspiracy is a document produced by BASF.*fn12 BASF
AG 0025648-49.*fn13 The European Commission found that Roche was the
"prime mover and main beneficiary of the complex of collusive
arrangements." ECF ¶ 568. The Commissions' findings, however, do not
A secondary argument setting forth Roche's involvement in the choline
conspiracy is Roche's economic incentives. In addition to manufacturing
and selling many vitamin products, Roche is also a buyer and reseller of
choline chloride, primarily in the form of premix. Premix is a blend of
vitamins sold as a separate product. Most animal feed is purchased in the
form of premix. Choline is a component in 25% of ...