In re Rubber Chemicals Antitrust Litigation

232 F.R.D. 346, 2005 U.S. Dist. LEXIS 39808, 2005 WL 2649292
CourtDistrict Court, N.D. California
DecidedOctober 6, 2005
DocketNo. C 04-1648 MJJ
StatusPublished
Cited by27 cases

This text of 232 F.R.D. 346 (In re Rubber Chemicals Antitrust Litigation) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Rubber Chemicals Antitrust Litigation, 232 F.R.D. 346, 2005 U.S. Dist. LEXIS 39808, 2005 WL 2649292 (N.D. Cal. 2005).

Opinion

ORDER GRANTING PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

JENKINS, District Judge.

INTRODUCTION

Before the Court is Plaintiffs’ Rule 23 motion for class certification in this multi-district litigation arising from an alleged conspiracy by Defendants to fix the prices of the chemicals used in the manufacture of tires and other rubber products. Plaintiffs seek certification of the following class:

All persons (excluding government entities, defendants, and the present or former parents, predecessors, subsidiaries and affiliates of the foregoing) which purchased rubber chemicals in the United States directly from any of the defendants, or any present or former parent, subsidiary or affiliate thereof, at any time during the period May 1, 1995 through December 31, 2001.

[349]*349Plaintiffs also ask the Court to appoint Gold Bennett Cera & Sidener LLP (“Gold Bennett”) and Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (“Cohen Milstein”) as class counsel. Having read and considered the parties’ briefs and the arguments proffered at the hearing on Plaintiffs’ motion, the Court GRANTS Plaintiffs’ motion for the following reasons.

FACTUAL BACKGROUND

In its natural state, raw rubber has little commercial application. The products involved in this litigation — primary, secondary, or ultra accelerators; activators; vulcanizing agents; antioxidants; and antiozonants (hereinafter, collectively referred to as “Rubber Chemicals”) — facilitate the conversion of raw rubber into finished rubber. The transformation from raw to finished rubber is achieved through vulcanization, which is the process of combining raw rubber with Rubber Chemicals at a high temperature. Rubber Chemicals facilitate the vulcanization process and protect the finished rubber against degradation caused by oxygen and ozone. Much of the U.S. market for Rubber Chemicals is supplied by three large producers and their affiliates: Flexsys America L.P., Bayer A.G., and Crompton Corporation. These entities are three of the defendants (alleged co-conspirators) in this multi-district litigation. These three producers are believed to account for up to 75% of Rubber Chemicals sales.

Direct purchasers of Rubber Chemicals, including tire companies and industrial manufacturers, brought this lawsuit alleging that Defendants conspired to fix the prices of Rubber Chemicals sold in the United States in violation of the Sherman Act, 15 U.S.C. § 1. Plaintiffs further allege that as a result of the conspiracy, they paid more for Rubber Chemicals than they otherwise would have and, thus, were injured. Plaintiffs seek, among other things, injunctive relief and treble damages pursuant to sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 15/26" style="color:var(--green);border-bottom:1px solid var(--green-border)">26.

The first complaint in this multi-district litigation was filed on April 8, 2003. That case and several subsequently-filed cases were consolidated and a Consolidated Amended Complaint was filed on November 3, 2003 (the “Complaint”). Plaintiffs recently settled their claims with one subset of Defendants — Flexsys N.V., Flexsys America L.P., Akzo Nobel Chemicals International B.V., and Akzo Nobel Chemicals, Inc. (collectively, the “Flexsys Defendants”) — and are in the process of settling with another subset— Crompton Corporation and Uniroyal Chemical Company, Inc. (collectively, the “Crompton Defendants”). Accordingly, Plaintiffs’ motion for class certification is opposed only by the remaining Defendants — Bayer Corporation, Bayer AG, and Rhein Chemie Corporation (collectively, the “Bayer Defendants”).

In 2004, Defendant Bayer AG pled guilty in a parallel criminal case to one count of a felony charge for violating Section 1 of the Sherman Act. That count of the indictment alleged that Bayer AG conspired with unnamed rubber chemical producers to suppress and eliminate competition for certain rubber chemicals sold in the United States and elsewhere from mid-1995 to 2001. As part of the plea, Bayer AG agreed to pay a $66 million criminal fine.

LEGAL STANDARD

To maintain a class action under Rule 23, the proponents of the class must first satisfy the four prerequisites of Rule 23(a). According to Rule 23(a), a class may be certified only if:

(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). If these requirements are met, the class proponents must also show that they have met one of the four disjunctive prerequisites of Rule 23(b). Under this subsection, the Court must find either: (1) that the prosecution of individual actions would create a risk of inconsistent verdicts that would establish incompatible standards [350]*350of conduct for defendant or would be dispositive of the claims of non-party class members or substantially impede the ability of non-party class members to pursue their own claims; (2) that the defendant acted or refused to act on grounds generally applicable to the class, so that declaratory or injunctive relief is appropriate with respect to the entire class; or (3) that common questions of law or fact predominate and that a class action is superior to other available methods of adjudication. Fed. R. Civ. P. 23(b)(l)-(3). Here, Plaintiffs seek class certification under Rule 23(b)(3). According to that subsection, the matters pertinent to the findings include:

(A) the interests of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the difficulties likely to be encountered in the management of a class action.

Fed. R. Civ. P. 23(b)(3).

The proponents of the class bear the burden of demonstrating that all the prerequisites for class designation are met. See In re Northern District of California Dalkon Shield IUD Products Liability Litigation, 693 F.2d 847, 854 (9th Cir.1982). In analyzing whether the putative class meets the requirements of Rule 23, a court is to take the substantive allegations of the complaint as true, and may also consider extrinsic evidence submitted by the parties. Blackie v. Barrack, 524 F.2d 891, 901 (9th Cir.1975).

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Bluebook (online)
232 F.R.D. 346, 2005 U.S. Dist. LEXIS 39808, 2005 WL 2649292, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-rubber-chemicals-antitrust-litigation-cand-2005.