In Re Uranium Industry Antitrust Litigation

458 F. Supp. 1223, 1978 U.S. Dist. LEXIS 16259
CourtUnited States Judicial Panel on Multidistrict Litigation
DecidedJuly 31, 1978
Docket342
StatusPublished
Cited by8 cases

This text of 458 F. Supp. 1223 (In Re Uranium Industry Antitrust Litigation) is published on Counsel Stack Legal Research, covering United States Judicial Panel on Multidistrict Litigation primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Uranium Industry Antitrust Litigation, 458 F. Supp. 1223, 1978 U.S. Dist. LEXIS 16259 (jpml 1978).

Opinion

OPINION AND ORDER

STANLEY A. WEIGEL, Judge of the Panel.

I. BACKGROUND

This litigation consists of four actions pending in the following federal districts: the Northern District of Illinois, the Southern District of New York, the District of Colorado and the Eastern District of Tennessee. Each action involves an alleged conspiracy to increase the price of uranium and to divide portions of the world uranium market.

The Illinois action was filed by Westinghouse Electric Corporation (Westinghouse) on October 15, 1976 against twelve foreign and seventeen domestic companies alleged to be producers, sellers, or agents for sellers of uranium. 1

The New York, Colorado and Tennessee actions were filed by the Tennessee Valley Authority on November 18, 1977 (TVA actions). The complaints in these three actions contain virtually identical allegations, but the defendants are different. Ten foreign and three domestic companies allegedly engaged in various aspects of the uranium business are named as defendants. The named defendants in each action are listed as co-conspirators in the other actions. Ten of the thirteen defendants in the TVA *1225 actions are also named as defendants in the Illinois action; three of these defendants, however, are apparently among the defendants against which default judgments have been entered in the Illinois action. See note 1, supra.

Illinois Action

The complaint in the Illinois action alleges that, beginning in 1972, certain of the foreign defendants formed a cartel that rigged bids, fixed prices and divided portions of the world uranium market. Westinghouse also charges that the foreign defendants urged domestic producers to drop their opposition to removal of the United States Atomic Energy Commission (AEC) embargo on the importation of uranium for enrichment and use in domestic nuclear reactors by promising not to permit sales of foreign uranium into the United States at prices below those prevailing in the United States. The complaint further alleges that the foreign defendants invited and secured the participation of the domestic defendants in the cartel. The complaint alleges that the defendants thereafter cooperated in causing the price of uranium in the United States to be determined by or heavily influenced by the price fixed by the cartel. In addition, the complaint alleges, the defendants agreed to boycott resellers of uranium, including Westinghouse, with the express intent of eliminating those resellers as competitors. Westinghouse claims that these activities violated Section 1 and/or Section 8 of the Sherman Act, and seeks treble damages and injunctive relief. 2

Several defendants in the Illinois action have filed counterclaims against Westinghouse in which those defendants allege that Westinghouse has violated the antitrust laws by, inter alia, (1) monopolizing or attempting to monopolize the market for nuclear reactors and nuclear reactor fuel supplies; (2) tying its sale of uranium to its sale of nuclear reactors and fuel assemblies; and (3) entering exclusive dealing contracts with utilities.

In early 1977, certain defendants moved to disqualify Westinghouse’s counsel in the Illinois action. On January 25, 1977, the Honorable Prentice H. Marshall, to whom the Illinois action has been assigned, stay discovery as to those movants. Thereafter, Westinghouse retained additional counsel in order to pursue pretrial endeavors while the disqualification issue was being resolved. On July 25, 1978, the Court of Appeals for the Seventh Circuit ruled that, with respect to three defendants in the Illinois action, Westinghouse’s original counsel was engaged in a conflict of interest, and that Westinghouse must either discharge this counsel or dismiss the claims against these three defendants. Westinghouse Electric Corp. v. Kerr-McGee Corp. et al., 580 F.2d 1311 (7th Cir. 1978). Westinghouse has stated that it intends to file a petition with the Seventh Circuit for a rehearing en banc on the disqualification issue. “Company News,” N.Y. Times, July 27, 1978, at D4, col. 5.

TVA Actions

In the first two counts of each complaint in the TVA actions, TVA alleges that, beginning in 1972, the defendants and their co-conspirators, in violation of Sections 1 and/or 8 of the Sherman Act, conspired to rig bids, to fix the price, terms and conditions for the sale of uranium, and to allocate uranium sales in foreign and domestic markets. In furtherance of this conspiracy, the defendants allegedly boycotted certain power systems, including TVA, or dealt with those power systems only at prices and *1226 on terms and conditions fixed by the defendants. More specifically, TVA charges that defendants’ conspiratorial activities affected three contracts for the purchase of uranium entered into by TVA in 1974, after the AEC had proposed a gradual relaxation of the embargo on the importation of uranium for enrichment and use in domestic nuclear reactors.

In the third count of each complaint, TVA alleges that the conduct of the defendants violated certain duties owed to TVA under, inter alia, Section 21(c) of the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. § 831t(c). 3

The Illinois action was previously considered by the Panel for transfer and inclusion under 28 U.S.C. § 1407 in In re Westinghouse Electric Corporation Uranium Contracts Litigation (MDL-235). In MDL-235, the Panel, pursuant to Section 1407, centralized several actions involving uranium supply contracts between Westinghouse and a number of utility companies, including TVA, in the Eastern District of Virginia for coordinated or consolidated pretrial proceedings. In re Westinghouse Electric Corporation Uranium Contracts Litigation, 405 F.Supp. 316 (Jud.Pan.Mult.Lit.1975). The Panel denied transfer of the Illinois action to the Eastern District of Virginia for inclusion in MDL-235 for the following reasons:

While we recognize that the allegations of a uranium price-fixing and market manipulation conspiracy in [the Illinois action] and the actions in MDL-235 involve common questions of fact, on the basis of the record before us we are not convinced that these conspiracy issues predominate over the contractual issues that form the basis of MDL-235. ... In any event, unlike [the Illinois action] . . . trial is imminent in the actions in MDL-235. Under these circumstances, we believe that the purposes of Section 1407 can best be achieved by allowing the actions in MDL-235 to be left alone. See In re Celotex Corporation “Technifoam” Products Liability Litigation, 68 F.R.D. 502, 505 (Jud.Pan.Mult.Lit.1975).

In re Westinghouse Electric Corporation Uranium Contracts Litigation, 436 F.Supp.

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Bluebook (online)
458 F. Supp. 1223, 1978 U.S. Dist. LEXIS 16259, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-uranium-industry-antitrust-litigation-jpml-1978.