In re Urethane Antitrust Litigation

237 F.R.D. 440, 2006 WL 2391128
District Court, D. Kansas·Decided August 16, 2006·No. No. 04-MID-1616-JWL·Published·Cited by 22 cases

Opinion

MEMORANDUM AND ORDER

LUNGSTRUM, District Judge.

In this multidistrict litigation proceeding plaintiffs allege that defendants engaged in a [443]*443price-fixing conspiracy with respect to polyester polyols and related polyurethane systems in violation of federal antitrust laws. This matter is presently before the court on Plaintiffs’ Motion for Class Certification and Appointment of Class Counsel (doc. # 171). The court held a class certification hearing on July 24, 2006. Having fully considered the record, the court is now prepared to rule. For the reasons explained below, the court will grant the motion in part and deny it in part. The court will certify a Rule 23(b)(3) class with the revised proposed class definition as clarified at the class certification hearing. The court will not, however, certify the class under Rule 23(b)(2).

BACKGROUND

In the Consolidated Class Action Complaint (doe. #39) plaintiffs Skypark Manufacturing LLC (Skypark), Maine Industrial Tires Limited (Maine Tire), and Urethane Products Industries, Inc. (UPI)1 allege defendants engaged in a horizontal price-fixing conspiracy with respect to polyester polyols and related polyurethane systems, a per se violation of § 1 of the Sherman Act, 15 U.S.C. § 1. Generally speaking, polyurethanes are formed by reacting a polyol with an isocyanate. Thus, polyols are a primary component of polyurethanes. Polyols are blended (as part of a “system”) with catalysts, surfactants, and blowing agents, and mixed in the correct proportion with isocyanates (methylene dyphenyldiisocyanate (MDI) and toluene diisocyanate (TDI)) to yield polyurethane products. The term “polyester polyols”2 describes a variety of chemical compounds that can be used as a component in manufacturing products based on polyurethane polymers. The products at issue in this lawsuit are aliphatic polyester polyols, which are made primarily from adipic acid, and related chemical systems. They are used to manufacture a variety of foam-based products such as packaging, automobile air filters, sound-deadening materials, and furniture as well as non-foam products such as certain coatings and adhesives.

The defendants in this lawsuit collectively are the primary aliphatic polyester polyol manufacturers. The defendants include Uniroyal Chemical Company, Inc. and Chemtura Corporation Wa Crompton Corporation (collectively, Chemtura) as well as Bayer AG and related entities Bayer Corporation, Bayer MaterialScience (fik/a Bayer Polymers LLC), Rhein Chemie Rheinau GmbH, and Rhein Chemie Corporation (collectively, Bayer). At the time plaintiffs originally filed their class certification motion, they sought class certification with respect to their claims against Chemtura and Bayer. Since the time when this motion was filed, however, plaintiffs and Bayer3 entered into a settlement agreement. The court issued an order preliminary approving the Bayer settlement, certifying a settlement class, and authorizing dissemination of class notice. Consequently, the current motion now applies only to class certification and appointment of class counsel with respect to plaintiffs’ claims against Chemtura.

Chemtura vigorously opposes class certification, primarily on the grounds that plaintiffs have failed to show that antitrust injury and damages are susceptible to common proof on a class-wide basis, hence predominance and superiority are lacking. Chemtura contends that the relevant products encompass numerous differently formulated chemical compounds known generally as “polyester polyols,” as well as a myriad of differently formulated polyester-based prepolymers (“prepolymers”) and two-component, polyester-based polyurethane systems (“polyurethane systems” or “systems”). Chemtura [444]*444contends that, in reality, these various categories and formulations of compounds have little in common with each other in their manufacture, marketing, pricing, or practical application. According to Chemtura, contrary to plaintiffs’ expert report which states that antitrust impact and damages are susceptible to class-wide proof, the empirical and testimonial evidence reflects that actual transaction prices were established through highly individualized negotiations that often took no account of price lists or price announcements. In sum, Chemtura argues that the diversity of circumstances surrounding each putative class member’s purchase of the precise product purchased by that class member undercuts the simple economic assumptions upon which plaintiffs expert report is based, which ignore the marketplace realities.

LEGAL STANDARD FOR CLASS CERTIFICATION

The standards for certifying a class action are set forth in Fed.R.Civ.P. 23. This rule requires all four prerequisites of Rule 23(a) and at least one of the three requirements of Rule 23(b) to be satisfied. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997); In re Integra Realty Res., Inc., 354 F.3d 1246, 1262 (10th Cir.2004). The decision whether to certify a class is committed to the broad discretion of the trial court. Rector v. City & County of Denver, 348 F.3d 935, 949 (10th Cir.2003); J.B. ex rel. Hart v. Valdez, 186 F.3d 1280, 1287 (10th Cir.1999). The court must perform a rigorous analysis of whether the proposed class satisfies the requirements of Rule 23. Gen. Tel. Co. v. Falcon, 457 U.S. 147, 155, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982); Hart, 186 F.3d at 1287-88; see also Reed v. Bowen, 849 F.2d 1307, 1309 (10th Cir.1988) (party seeking to certify a class is under a strict burden of proof to show that all of the requirements are met). The court should accept the allegations in the complaint as true, although it “need not blindly rely on eonclusory allegations which parrot Rule 23 requirements [and] may ... consider the legal and factual issues presented by plaintiffs complaints.” J.B., 186 F.3d at 1290 n. 7 (quotation omitted; brackets in original). The court is to remain focused on the requirements of Rule 23 rather than looking at the merits underlying the class claim. Shook v. El Paso County, 386 F.3d 963, 971 (10th Cir.2004); Adamson v. Bowen, 855 F.2d 668, 676 (10th Cir.1988); Anderson v. City of Albuquerque, 690 F.2d 796, 799 (10th Cir.1982).

DISCUSSION

For the reasons explained below, the court finds as a threshold matter that plaintiffs’ proposed class definition as revised at the class certification hearing defines the class with sufficiently objective and ascertainable criteria. The court further finds that the four prerequisites of Rule 23(a) — numerosity, commonality, typicality, and adequacy of representation — are satisfied with respect to the proposed class and its representatives.

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In re Urethane Antitrust Litigation, 237 F.R.D. 440, 2006 WL 2391128 (D. Kan. 2006).

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