Antitrust Law Daily Wrap Up, ANTITRUST—D. N.J.: Purchasers’ alleged anticompetitive conduct not relevant in urethane price fixing action, (Dec 22, 2015)

By Michael Menzhuber, J.D., LL.M.

In a price fixing action by purchasers of polyether polyol products (PPPs) against Dow Chemical, the federal district court in Newark, New Jersey, excluded evidence of purchasers’ anticompetitive conduct in downstream markets. The court determined that the evidence was not relevant and was precluded by Federal Rule of Civil Procedure 403 (In Re Urethane Antitrust Litigation, December 21, 2015, Martini, W.).

Dow was named as a defendant in a consolidated class action lawsuit filed in the federal district court in Kansas City, Kansas, that alleged price fixing of PPPs, used to manufacture foam products. Several PPP purchasers opted out of the certified class and brought an action in the federal district court in Newark.

During pre-trial proceedings, Dow sought to compel discovery related to the plaintiffs’ anticompetitive conduct as a seller of foam products in the downstream market. The Kansas City court granted the motion to compel discovery, but did not rule on the admissibility of the evidence.

After Dow concluded its discovery, which contained documents and depositions relating to plaintiffs’ conduct in downstream markets, the plaintiffs filed a motion in limine to exclude the evidence.

The court disagreed with Dow’s argument that the Kansas City court had already ruled on the relevance of the downstream evidence when it permitted Dow’s motion for discovery, since the court expressly stated that admissibility of the evidence would be determined at trial. The court determined that the evidence as to the plaintiffs’ alleged anticompetitive conduct in the foam market was not admissible because it was not relevant to the issue in the case—whether Dow conspired with other urethane manufacturers to manipulate PPP prices in violation of antitrust laws.

Even if the evidence could be considered relevant, it should be excluded under Rule 403, which excludes relevant evidence for prejudice. In weighing the probative value of the evidence against the risk of unfair prejudice, the court found that the probative value of the evidence was low and the risk of prejudice was high. Consequently, the court granted Dow's motion in limine to preclude the evidence.

The case is No. 2:08-5169 (WJM-MF).

Attorneys: James E. Cecchi (Carella Byrne Cecchi Olstein Brody & Agnello, PC) for Carpenter Co., Carpenter Canada Co., E.R. Carpenter, L.P., Burkart Foam, Inc. and Flexible Foam Products, Inc. Lawrence S. Lustberg (Gibbons, PC) for The Dow Chemical Co., Steven P. Benenson (Porzio, Bromberg & Newman, PC) for Lyondell Chemical Co.

Companies: Carpenter Co.; Carpenter Canada Co.; E.R. Carpenter, L.P.; Burkart Foam, Inc.; Flexible Foam Products, Inc.; BASF Corp.; BASF Canada Inc.; The Dow Chemical Co.; Dow Chemical Canada Inc.; Huntsman International LLC; Lyondell Chemical Co.

Cases: Antitrust NewJerseyNews