Antitrust Law Daily Wrap Up, ANTITRUST—D. Minn.: Valspar’s price fixing claims against Kronos transferred to Texas court, (Oct 3, 2014)

By Jody Coultas, J.D.

The federal district court in St. Paul, Minnesota, has transferred price fixing claims filed by The Valspar Corporation against Kronos Worldwide, Inc. to the United States District Court for the Southern District of Texas. Kronos’s motion to sever Valspar’s claims against it was also granted (Valspar Corp. v. Kronos Worldwide, Inc., October 1, 2014, Kyle, R.).

In order to manufacture its paint and coating products, Valspar uses titanium dioxide—a chemical used for whiteness and brightness. Valspar purchased titanium dioxide from a number of suppliers, including Kronos.

Several titanium dioxide purchasers filed an antitrust suit in the United States District Court for the District of Maryland, alleging that Kronos, Millennium Inorganic Chemicals, Inc., Huntsman International LLC, and E.I. du Pont de Nemours and Company conspired to manipulate the market and price for titanium dioxide. The case settled, but Valspar opted out of the settlement agreement and filed its own suit.

Pursuant to mandatory forum-selection clauses in their supply contracts, the court in an April 2014 decision severed the claims against Huntsman and DuPont and transferred them to the United States District Courts for the Southern District of Texas and the District of Delaware, respectively. Kronos moved to sever the claims against it and transfer them to the Southern District of Texas.

Courts look at whether the action might have been brought in the proposed transferee district, as well as the convenience of the parties, the convenience of witnesses, and the interests of justice when deciding whether to transfer a case.

The Southern District of Texas would have had jurisdiction over Kronos had Valspar filed there, according to the court. Kronos processes all of its orders for titanium-dioxide sales in the United States at a customer service office located in Houston. This was sufficient to confer jurisdiction over Kronos.

Transfer to the Southern District of Texas was proper, according to the court. Valspar is located in Minnesota, while Kronos is headquartered in Texas. However, the court already transferred Valspar’s claims against Huntsman to the Texas court. The fact that Valspar had to proceed against Huntsman in that court weighed in favor of transferring the claims against Kronos to that same court. The convenience-of-witnesses factor was generally the most important in the inquiry, yet neither party made much effort to identify non-party witnesses or discuss the materiality of their expected testimony. Valspar did not identify one third-party witness who would be burdened by litigating in Texas, while Kronos only identified one third-party witness, who lived in Texas. Trying the claims against Kronos and Huntsman in one venue would eliminate the possibility of inconsistent verdicts. Valspar would have been unable to enforce a judgment in Minnesota. Valspar was already litigating in Texas and had obtained local counsel there—an expense Kronos need not bear if the claims against it were transferred, and litigating in Texas appeared to be less costly than litigating in Minnesota. Therefore, transfer was in the interests of justice.

The case is No. 13-3214 (RHK/LIB).

Attorneys: Richard Ihrig, James M. Lockhart, James P. McCarthy, John C. Ekman, Jessica L. Meyer (Lindquist & Vennum LLP) for Valspar Corp. Clifford M. Greene, Bethany D. Krueger, John W. Ursu (Greene Espel PLLP) and Paul E. Coggins, Kelly R. Vickers, Amanda L. Burcham (Locke Lord LLP) for Kronos Worldwide, Inc.

Companies: Valspar Corp.; E.I. DuPont de Nemours and Co.; Huntsman International LLC; Kronos Worldwide, Inc.; Millennium Inorganic Chemicals, Inc.

Cases: Antitrust MinnesotaNews