IN RE: Corn Derivatives Antitrust Litigation

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pene : 2 i he Ea Log
1 WRIT
o 2 EAN 28 1557
3 BEFORE THE JUDICIAL PANEL va : te
4 MULTIDISTRICT LITIGATION
* IN RE CORN DERIVATIVES ANTITRUST ) DOCKET NO. 414
5 LITIGATION )
6 OPINION AND ORDER
7
BEFORZ ANDREW A. CAFFREY, CHAIRMAN, AND ROY W. HARPER,
8 CHARLES R. WEINER, EDWARD S. NORTHROP, AND ROBEZRT H. SCHNACK=Z,
JUDGES OF THE PANEL
9 PER CURIAM
10 On November 20, 1950, the Federal Trade Commission
11 (FTC) issued a decision and order to cease and desist in
12 In re Corn Products Refining Company, et al., FTC Docket
® No. 5502. The FTC found that eight corporate defendants13
= had violated the provisions of Section 5(a) of the Federal
14
Trade Commission Act, as amended, 15 U.S.C. §45(a), by
15 oo . .
conspiring to fix the prices, terms or conditions of sale
16 of "corn derivatives" (products of the orocessing of corn
17 including, inter alia, corn syruo, pearl starch, dextrin,	g, inter 3lia
18 corn sugar and corn oil). The cease and desist order vecame
19 final on January 19, 1951.
20 On December 7, 1979, the Antitrust Division of the
United States Department of Justice commenced a civil action
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in the Northern District of California against the eight
22
corporate defendants involved in the earlier FTC proceeding.’
23
24 1/ One of these defendants asserts that it was not formed
C until 1971, and that it may have been erroneously7 25 included as a defendant in the Government's recent civil
action.
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1 The complaint in this action alleges that, since at least
5 December, 1974, until the present, these eight defendants ®
3 have violated the terms of the FTC cease and desist order. -
The complaint seeks civil penalties and equitable relief.
4 On December 27, 1979, the Government filed a motion !
3 to stay its civil action until further order of the court
6 on the ground that a grand jury in the Northern District
7 of California will be investigating, inter alia, the same
8 conduct that forms the basis of the Government's civil
9 action. That motion has not yet been ruled unon. The
10 ‘Government has advised the Panel that grand jury subpoenas
recently have been issued for service upon the eight defendants,
11
among others.
12
Shortly after the filing of the Government's recent ®13 civil action, a number of private civil actions were filed
14 in this litigation. Presently before the Panel are 25
15 actions pending in a total of four federal districts:
16 eighteen in the Northern District of california;2/ four
17 in the Zastern District of Pennsylvania; two in the District
18 of Minnesota, and one each in the District of New Jersey
and the Central District of California. Each of these actions
19 was commenced under Section 1 of the Sherman Act, and the
20 allegations of the complaints, which are virtually identical,
21 basically track the allegations of the Government's recent
22 civil action.
23 Zach of the private actions was filed as a purported
24 class action on behalf of various purchasers of corn deriva- ®	2/Plaintiff	in one of these actions presently is seeking
25 to dismiss its action without vrejudice.
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2 tives. While there are some variations in the descriptions
. 3 of the classes that plaintiffs seek to represent, all are
4 nationwide classes of all, or some group of, corn derivatives
5 purchasers. The eight defendants named in the Government's
recent civil action and in the earlier FTC action are named
© as defendants in all or most of the orivate actions. One
7 action also names as defendants four additional corporations.
8 Each of the actions before the Panel was commenced
9 within the past few months, and pretrial proceedings are
10 ‘not in an advanced stage in any of these actions.
11 This litigation is before the Panel on the motions
12 of two defendants, pursuant to 28 U.S.C. §1407, for transfer
[ of all private actions to the Northern District of California
13 for coordinated or consolidated pretrial oroceedings.>’
14 ‘All responding parties agree on the prooriety of transfer.
15 Plaintiffs in 23 of the 26 actions before the Panel and
16 one additional defendant support movants' choice of the
17 Northern District of California as the transferee forum.
18 five defendants favor transfer to the Southern District’ :
19 : | of New York. Plaintiffs in the remaining three actions
I~ pefore the Panel favor transfer to, alternatively, the
Southern District of New York, the District of New Jersey,
21 or the Eastern District of Pennsylvania. No other parties
22 have responded before the Panel.
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@: 3/ These parties have stated that they anticipate that	additional actions may be filed in this litigation. Any
additional actions will be treated as potential tag-along
25 actions. See Rules 1, 9 and 10, R.P.J.P.M.L., 78 F.R.D.
561, 562, 567-69 (1978).
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1 Wwe find that these actions involve common questions :
2 of fact and that centralization of the actions under Section ®
3 1407 in the District of New Jersey will pest serve the -
4 convenience of the parties and witnesses and promote the |
5 just and efficient conduct of this litigation. ’
| The parties that favor the Northern District of California
© as the transferee district argue that because the defendants
’ and the plaintiffs in this litigation are scattered throughout
8 the entire nation, no one federal district appears to constitute
9 a "center of gravity" for the litigation. Under these
10 circumstances, these parties maintain, the Northern District
11 of California would clearly be the most appropriate transferee
12 forum for the following reasons: (1) the Government's
civil action, as well as the grand jury investigation, o
+ are pending in the Northern District of California and
14 these proceedings will inevitably generate a wealth of
15 documents and other evidence that may be relevant to the
16 private actions; (2) the Northern District of California
17 is an easily accessible and convenient forum for the parties,
18 witnesses and counsel involved in this litigation;	(3)
19 eighteen of the 26 actions presently before the Panel are
20 nending in the Northern District ofCalifornia; and (4)
a majority of the responding parties favor centralization
21 in that district.
22 The parties that favor centralization of the private
23 actions in the Southern District of New York argue as follows:
24 (1) a majority of the potential witnesses and most of the ®
25 relevant documents are "undoubtedly" located at the princinal
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® 1 places of business of the eight defendants named in the
2 Government's recent civil action, and these principal places
B 3 of business are maintained either in or near New York or
4 in the Midwest; (2) counsel for the plaintiffs, as wall
as most counsel who represent the eight defendants and
> who are well acquainted with the underlying facts in this
6 litigation, are predominantly located in either the Eastern
7 United States or in the Midwest; and (3) New York is "far
8 more accessible" to the parties, the witnesses and counsel
9 than San Francisco.
10 The parties that have urced the Panel to centralize
11 these actions in the Southern District of New York discount
the importance of the pendency of the Government's civil
[ ) 12 action in the Northern District of California. Five of
S13 the eight defendants involved in the Government's civil
14 action state in their papers before the Panel that they
15 recently have moved to transfer that action to the Southern
16 District of New York pursuant to 28 U.S.C. §1404. At any
17 rate, these defendants state, the Government presently
18 is seeking a stay of all proceedings in that action.
: The parties favoring transfer to the Southern District
+o of New York also urge the Panel not to assign a great deal
20 of significance to the pendency of the grand jury investigation
21 in the Northern District of California. These parties state
22 that the grand jury investigation is at an incipient stage;
23 that the results of the investigation will probably not
] 24 be known for a substantial period of time; that there can
25 be no certainty that the grand jury, upon completion of
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1 its investigation, will take any action against any entity
2 or person; and that plaintiffs have already demonstrated
3 a desire to move ahead with discovery without waiting for }
possible access to grand jury materials.
* As previously noted, plaintiffs in three actions who :
> favor centralization in the Southern District of New York
6 alternatively urge the Panel to centralize these actions
7 in either the Eastern District of Pennsylvania or the District
8 of New Jersey. These plaintiffs basically favor central-
9 ization in the District of New Jersey because that district
10 (a) is very near to the Southern District of New York,
11 and (hb) has a very favorable civil (and, in particular,
multidistrict and class action) caseload in comvarison
12 to the other transferee districts that have been suggested
13 in this litigation. These plaintiffs also urge that the
14 fastern District of Pennsylvania might be an appropriate
15 transferee district because of its proximity to Wew York
16 City and because many. counsel involved in this litigation
17 maintain their offices in Philadelphia, New York and/or
18 Washington, D. C. :
Ne have evaluated and weighed all the relevant factors
+ concerning the selection of a transferee district, and
20 are of the view that any of the districts that have been
21 suggested as a transferee forum for this litigation could
22 be described as aporopriate. On balance, however, we conclude
23 that the District of New Jersey is preferable. We agree
24 with those parties before us who have candidly recognized é
25 that, because the parties, the potential witnesses and
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1 the potentially relevant documents are widespread, no one
® 2 transferee district emerges as the "center of gravity"
- 3 for this litigation. Nevertheless, we are persuaded by
the arguments of the parties who favor an eastern transferee
’ : forum that this litigation has an eastern tilt because |
> of the location of all eight of the major defendants' head-
6 quarters in the eastern half of the country. Thus, many
7 key witnesses and relevant documents will be located in
8 that area. Furthermore, the District of New Jersev stands
9 out because, according to the latest statistics available,
10 "that district is in the best position to process this litigation
11 toward its most expeditious conclusion. For example, as
of June 30, 1979, only 68 class actions were pending in
@ 12 the District of New Jersey, whereas the Southern District
- 13 of New York, the Northern District of California and the
14 ifastern District of Pennsylvania had, respectively, 246,
15 220 and 156 pending class actions .%/ 1979 Annual Report
16 of the Director of the Administrative Office of the United
17 States Courts, Table 36 at 79. In addition, the District |
18 of New Jersey has drastically fewer multidistrict litigations :
than any of the other suggested transferee districts. :
19 See id. at 90-91 (Table 44). And the District of New Jersey
20 has disposed of its cases quicker than the other three
21 districts. Compare Management Statistics for United States
22 Courts 1979, "From Filing to Disposition" at 30 (Administrative
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é® 24 4/ The	District	of New Jersey also has significantly	less class actions per judge than the other three districts.
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1 Office of the United States Courts) with id. at 24, 31
2 and 101.
3 IT IS THEREFORE ORDERED that, pursuant to 28 U.5.C. -
4 §1407, the actions listed on the following Schedule A and
5 pending in districts other than the District of New Jersey | )
pe, and the same hereby are, transferred to the District
© of New Jersey and, with the consent of that court, assigned
7 to the Honorable Clarkson S. Fisher for coordinated or consoli-
8 dated pretrial proceedings with the action already pending
9 in that district and listed on Schedule A.
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DOCKET NO. 414
® SCHEDULE A page 1
3 . Northern District of California
a : Virnelson Bakery, Inc., v. CPC International, Inc., et al.,
4 C.A. No. C79-3731-WAI )
Adeline Bake Shops, Inc. v. CPC International, Inc.,
‘5 et al., C.A. No. C79-3857-WAI .
Health Care Industries, Inc. v. CPC International, Inc.,
. et al., C.A. No. C79-3858-WAI
6 Consolidated Packaging Corp. v. CPC International, Inc.,
et al., C.A. No. C79-3859-WAI
7 Federal Bake Shops, Inc., etc. v. CPC International,	Inc.,
et al., C.A. No. C79-3867-WAI a :
8 Bear Stewart Corp.	v. CPC International, Inc., et al.
C.A. No. C79-3866-WAT ’ ’ ’
9 G. Heileman Brewing Co., Inc. v. CPC International, Inc.,
‘et al., C.A. No. C79-3958-WATI : -
. Plantation Confection Co., Inc. v. CPC International, Inc.,
10 "Tet _al., C.A. No. C79-3959-WAT |
Sethness Greenleaf,	Inc. v. CPC International, Inc.,
11 et al., C.A. No.C79-3810-WAI
Korboro Oil Corp. v. CPC International,	Inc., et al.,
12 C.A. No. C80-36-WAI - CL
. Eastern	Candy -Co., Inc. v. CPC International, Inc., et al.,
® C.A. No. C80-37~WAI wl }	Kalva Corp. v.. CPC International, Inc., et al.,-
C.A. No. C80-38-wAI . : .
14 Continental Markets, Inc. v. CPC International, Inc.,
et al., C.A. No. CBO-55-CBR ol no )
15 General Brewing Co. v. CPC International, Inc., et al.,
: C.A. No. C80-140-AJZ Co : :
. 16 Marstan Industries, Inc. v. CPC International, Inc.,
to et al., C.A. No. C80-120-WATI ’ :
17 Superior Beverage Co., Inc. v. CPC International, Inc.,
et al., C.A. No. C80-39-wAI
18 Esco Foods, Inc. v. CPC International, Inc., et al., |
C.A. No. C80-45-SW |. Keystone Co. v. CPC International, Inc., et al.,
19 C.A. No. C80-50-CBR |
Central District of California I
20 Arden Farms Distribution Co. of Southern California v. CPC |
- International, Inc., et al., C.A. No. CV80-80—Duw
21 Eastern District of Pennsylvania
- Bodines, Inc. v. CPC International, Inc., et al., ‘
"C.A. No. 79-4596 ______________________ _ ——— — :
22 Golden Quality Ice Cream Co. v. A. E. Staley Manufacturing~ Co., et al., C.A. No. 79-4654
23 Kelco Industries, etc. v. CPC International, Inc., et al.,C.A. No. 79-4659 ee
Finkelstein's Farm v. CPC International, Inc., et al., |
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1 DOCKET NO. 414
2 | SCHEDULE A page 2
3 District of Minnesota .
Pan-0-Gold Baking Co. v. CPC International, Inc., et al.,
4 C.A. No. 3-79-638
Land O'Lakes, Inc., etc. v. CPC International, Inc., et al., s
5 C.A. No. 4-80-96
District of New Jersey
6 Land O'Lakes, Inc., etc. v. CPC International, Inc., et al.,	C.A. No. 80-185
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