Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Ark.: Antitrust case brought by Arkansas AG against Syngenta and Corteva will stay in Arkansas, (Jan 19, 2024)

By Donielle Tigay Stutland, J.D.

An antitrust lawsuit brought in Arkansas over pesticide makers' loyalty programs will remain in Arkansas despite consumer MDL and an FTC suit against Syngenta and Corteva in North Carolina.

The federal district court in the Eastern District of Arkansas denied a motion to transfer the venue of an antitrust suit filed by the Attorney General of the State of Arkansas alleging that the loyalty programs of several pesticide manufacturers were in violation of federal and state antitrust and consumer-protection laws. Pesticide makers Syngenta Crop Protection AG, Syngenta Corporation, Syngenta Crop Protection, LLC (collectively, “Syngenta”), and Corteva, LLC (“Corteva”) argued that the action brought in an Arkansas district court should be transferred to the Middle District of North Carolina, where there is pending antitrust litigation against the defendants’ loyalty programs brought by both the Federal Trade Commission and ten state attorneys general and consumers. The court denied the motion to transfer after determining that the convenience of the parties and witnesses and the interest of justice were not so compelling as to overcome the State of Arkansas’ choice of forum (State Of Arkansas v. Syngenta Crop Protection AG, January 17, 2024, Miller, B.).

Background. The State of Arkansas (the “State”) sued the Syngenta defendants and Corteva alleging that defendants’ loyalty programs for their crop-protection products violated federal and state antitrust and consumer-protection laws. Prior to Arkansas filing its lawsuit, the FTC and ten state attorneys general (later joined by two more states) sued the defendants in the Middle District of North Carolina alleging antitrust violations related to the loyalty programs.

In addition to these suits, consumers of crop-protection products then filed twenty-nine putative class actions against defendants in six states, also bringing claims related to the loyalty programs. The twenty-nice consumer suits—nine of which were filed before the state of Arkansas’ suit—were centralized into multi-district litigation (“MDL”) proceedings in the Middle District of North Carolina.

These multiple actions arise out of similar allegations that defendants stifled competition and inflated the prices that farmers pay for crop protection products by using “loyalty programs” with their distributors. These programs allegedly operated to exclude market entry by generic pesticide competitors by only providing payment if the distributors limited business with competing pesticide manufacturers. Arkansas brought claims for violations the Sherman and the Clayton Act, as well as for violations of state antitrust and consumer protection laws.

The pesticide manufacturers filed a motion in Arkansas federal court to transfer the Arkansas suit to the Middle District of North Carolina, where the other suits are pending.

Transfer of Venue. The pesticide manufacturers argued that the Arkansas case should be transferred under 28 U.S.C. § 1404(a) and the first-filed rule. The State contended that pursuant to 28 U.S.C. § 1407(g),which was amended by the State Antitrust Enforcement Venue Act of 2022 (“SAEVA”), transfer is exempted and that transfer is not warranted under § 1404(a) or the first-filed rule. The court analyzed the §1404 factors of convenience and interest of justice, as well as the first-filed rule and concluded that they were not compelling enough to overcome the State’s choice of venue.

Convenience. The court began by reviewing the convenience of the parties, the convenience of the witnesses, the accessibility to records and documents, the location where the conduct complained of occurred, and the applicability of each forum state’s substantive law. The court found the convenience of the parties factor to be neutral, as Syngenta is headquartered in North Carolina, but the other defendants are not, and Arkansas is more convenient for the State. The court found that the convenience of witnesses factor tilts slightly in favor of transfer because it would be easier for witnesses to appear in one venue instead of two. However, it was noted that if or when the cases in the MDL are transferred back to their original venues for trial, witnesses may be required to appear in multiple venues. The court determined that the remaining convenience factors are neutral. Looking at all of the convenience factors, the court concluded they did not weigh heavily in favor of transfer.

Interest of Justice. Next, the court reviewed the interest of justice factors, such as judicial economy, the plaintiff’s choice of forum, the comparative costs to the parties of litigating in each forum, and the advantages of having a local court determine questions of local law in order to determine whether they weighed in favor of transfer. While the court found that considerations of judicial economy tilt in favor of transfer, the court also found that the other interest-of-justice factors did not weigh heavily in favor of transfer.

Additionally, the court noted that “the recent amendment of 28 U.S.C. §1407(g), while not dispositive, counsels against transfer.” The court indicated that “the enactment of SAEVA—which expanded the exemption to antitrust suits brought by a state—shows Congress’s intent to defer to a state’s choice of venue in antitrust suits.” The court placed emphasis on the fact that the State chose to sue defendants in this district, and that choice “is given considerable deference.” The court concluded that given that the other factors do not tilt heavily in favor of transfer, transfer is not warranted under this factor.

First-Filed Rule. Finally, the court reviewed whether transfer was warranted under the first-filed rule, which allows a district court to transfer a case when parallel litigation has been instituted in a separate court “to conserve judicial resources and avoid conflicting rulings.” However, the court highlighted that under Novartis AG, “a court may decline to follow the first-filed rule if the balance of convenience weighs against transfer.” While the antitrust claims and the defendants were the same in the other lawsuits, the court still denied the transfer under the first-filed rule, after determining that ”the balance of convenience does not weigh in favor of transfer, and neither does the interest of justice.”

The Case is No. 4:22-cv-01287-BSM.

Attorneys: Alex Jerome Brown (Lanier Law Firm PC) for Leslie Rutledge. Paul S. Mishkin (Davis, Polk & Wardwell LLP) for Syngenta Crop Protection AG.

Companies: Syngenta Crop Protection AG

Cases: Antitrust ArkansasNews