Defendants have filed motions to dismiss in the multi-district litigation cases captioned In re Chocolate Confectionary Antitrust Litigation, and are awaiting a ruling from Judge Conner of the Middle District of Pennsylvania.
Briefing on the motions was completed in December, and oral argument was held before the Court on January 16. Some of the key issues raised in the motions are: (1) whether personal jurisdiction existed over the Canadian defendants; (2) whether the Court can consider conduct that occurred in Canada when ruling on the motions to dismiss; and (3) whether the amended complaints satisfy the Twombly pleading standard with respect to defendants whose allegedly anticompetitive conduct was not described in Informations filed in connection with the Canadian criminal investigation.
In 2007, the Supreme Court heightened the pleading standard for an antitrust challenge to allegedly collusive conduct, ruling in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), that Plaintiffs must allege enough factual matter to suggest that an agreement was made – i.e., that the claim is "plausible," not just "possible." Under the new standard, Plaintiffs need to allege more facts in support of their claim than the mere existence of a government investigation.
Class action lawsuits are typically filed very shortly after the public disclosure of the existence of a government antitrust investigation. In such situations, the plaintiffs try to include as many additional facts regarding the alleged conspiracy as they can quickly gather, which can be a difficult task given that the government's evidence is not public information. The additional facts are often largely circumstantial "plus factors" suggesting an agreement, such as pre-textual explanations of price increases, communications or meetings that provide the opportunity to conspire, such as trade association meetings, or conduct that would be against a company's self-interest if acting alone, but not when acting in concert.
In the chocolate investigation, the Department of Justice has not made its evidence public, but the Canadian Competition Bureau has filed publicly available Informations, which includes direct allegations of an agreement. In the Informations, the Canadian government indicates that it has received evidence from a party that has applied to participate in its immunity program, including specific factual allegations regarding agreements to fix prices of chocolate in Canada. While price-fixing in Canada is not direct evidence of price-fixing in the United States, it certainly makes such a claim plausible, and, in my opinion, should be sufficient to allow the Chocolate cases to survive the motion to dismiss.
We'll likely find out what the Court thinks in a few months, when it rules on the motions to dismiss.
Related posts: Study Shows That Commodity Price Rises Don't Justify Chocolate Price Rises; Chocolate Price Fixing Cases Consolidated; Retail Grocery Chains File Suit Against Chocolate Makers; Investigation of Chocolate Makers Goes Global; Chocolate Makers Allegedly Fixed Prices.