Antitrust Law Daily Wrap Up, TOP STORY—Producers of Canadian Potash Agree to Settle Antitrust Claims, (Jan 30, 2013)

By William Zale, J.D.

Producers of Canadian potash have agreed to settle antitrust claims brought by direct and indirect purchasers in the federal district court in Chicago. Press releases announcing the settlement were issued on January 30 byPotash Corp. of Saskatchewan Inc., Mosaic Co., and Agrium Inc. Potash Corp. agreed to pay $43.75 million, Mosaic agreed to pay $43.75 million, and Agrium agreed to pay $10 million.

In November 2009, the direct and indirect purchasers of potash—mineral and chemical salts used principally as agricultural fertilizer but also in the production of glass, soaps, and numerous other products—asserted price fixing claims against the potash producers under the Sherman Act and the state antitrust laws of Michigan, Mississippi, Iowa, and Kansas. The district court denied a motion to dismiss the claims, In re: Potash Antitrust Litigation, 2010-2 Trade Cases ¶77,112, 667 FSupp2d 907 (ND Ill. 2009).

In June 2012, the U.S. Court of Appeals in Chicago held that the Foreign Trade Antitrust Improvements Act (FTAIA) did not bar the U.S. purchasers’ price fixing claims against the producers, in an en banc decision, 2012-1 Trade Cases ¶77,943, 683 F.3d 845. In November 2012, the U.S. Supreme Court granted the producers’ petition for review of the case. The producers asked the Court: (1) whether a “direct effect” on U.S. commerce within the meaning of the FTAIA is an effect that has only a “reasonably proximate causal nexus” with that commerce (as held by the Seventh Circuit) or, instead, is one that “follows as an immediate consequence of the defendant’s activities” (as held by the Ninth Circuit); and (2) whether the FTAIA’s “import-commerce” exclusion applies whenever a defendant sells its products in the United States (as held by the Seventh Circuit) or, instead, only when a defendant engages in allegedly anticompetitive conduct as part of its efforts to sell its product in the United States (as held by the Second and Third Circuits).

According to the direct purchasers’ motion for preliminary approval of the settlement, the producers agreed to pay $80 million to settle the direct purchasers’ class claims. According to the indirect purchasers’ memorandum in support of their motion for preliminary approval, the settlement provides for a cash payment of $17,500,000 for the benefit of the indirect purchasers’ settlement class. The settlements are subject to final approval by the district court.

The case is No. No. 08-C-6910.

Attorneys: Steven A. Hart (Segal McCambridge Singer & Mahoney, Ltd.) for direct purchaser plaintiffs. Marvin A. Miller (Miller Law LLC) for indirect purchaser plaintiffs. Patrick M. Collins (Perkins Coie LLP) for Agrium defendants. Michael Sennett (Jones Day) for Potash Corporation of Saskatchewan Inc. and PCS Sales USA, Inc. Britt M. Miller (Mayer Brown LLP) for Mosaic defendants.

Companies: Potash Corp. of Saskatchewan Inc.; PCS Sales USA, Inc.; Mosaic Co.; Agrium Inc.

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