Antitrust Law Daily Wrap Up, ANTITRUST—MDPa: Class of Direct Purchasers Certified to Proceed with Antitrust Claims Against Chocolate Makers, (Dec 10, 2012)

By Jeffrey May, J.D.

In a consolidated antitrust action against The Hershey Company, Mars, Inc., and Nestle U.S.A., Inc. for conspiring to fix the prices of chocolate confectionary products, the federal district court in Harrisburg, Pennsylvania, has certified a proposed class of over 2,900 entities that purchased single serving standard and King size chocolate candy for resale directly from the defendants between December 9, 2002, and December 20, 2007. The action was brought pursuant to Section 1 of the Sherman Act, as well as various state antitrust and consumer protection statutes (In Re: Chocolate Confectionary Antitrust Litigation, November 7, 2012, Conner, C.).

The class met the four requirements of Federal Rule of Civil Procedure 23(a): (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy. The court also was satisfied that the direct purchasers could maintain a class action under Rule 23(b)(3), because they established, by a preponderance of the evidence, the rule's dual requirements of predominance and superiority. The court determined that questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action was superior to other available methods for adjudicating the controversy.

The direct purchasers “thoroughly satisfied” their burden of showing that they will be able to prove their antitrust injury with evidence common to the class, it was decided. The court concluded that proof of antitrust injury may be accomplished with evidence common to the class despite the facts that: (1) chocolate confectionary products are heavily branded and (2) many class members paid different net prices for these products.

Expert Testimony to Establish Class–Wide Impact

The defendants moved to exclude the testimony of two experts who the plaintiffs contended would show that evidence common to the class would prove class-wide impact. The motions were denied.

The direct purchasers submitted the expert reports and testimony of an economist who opined that the structure of the chocolate confectionary industry facilitated collusive pricing. The plaintiffs also presented the expert reports and testimony of a statistician who used econometric models to demonstrate class-wide impact and to quantify the extent of the overcharge on a class-wide basis. The economist utilized the econometric analyses undertaken by the statistician to assert class-wide antitrust injury.

The court found that the experts' opinions met the requirements of Rule 702 of the Federal Rules of Evidence and the standard announced in the Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Any dispute as to the bases for these opinions or the merits of the experts’ conclusions went to the weight, not to the admissibility, of the expert testimony, according to the court.

Michael D. Hausfeld (Hausfeld LLP ) for plaintiffs. Brian M. English (Tompkins, McGuire, Wachenfeld & Barry, LLP) for The Hershey Company. Brian J. McMahon (Gibbons PC) for Mars, Inc. Carmine R. Zarlenga (Mayer Brown) for Nestle U.S.A., Inc.

Cases: Antitrust PennsylvaniaNews