Sunday, July 18, 2010

Packaged Ice Class Action Survives Motion to Dismiss

On July 1, a federal court denied defendants Reddy Ice and Arctic Glacier's motion to dismiss a direct purchaser class action antitrust lawsuit, allowing plaintiffs to proceed with the case alleging a nationwide conspiracy to allocate customers and territories.

Defendants Reddy Ice and Arctic Glacier had argued that the plaintiffs did not allege enough factual matter to plausibly suggest a nationwide conspiracy, as Arctic Glacier and Home City's criminal guilty pleas to customer allocation were limited to a small geographic area. The Court held that "Plaintiffs have offered sufficient factual content to 'raise a reasonable expectation that discovery will reveal evidence of illegal agreement,'" citing guilty pleas of several individuals, the pending government investigations, allegations made by former sales executive Martin McNulty and several other former employees, and the structure of the packaged ice industry,

With the resolution of the motion to dismiss, discovery should commence shortly. Discovery is likely to be limited, however, to written discovery and not depositions until the resolution of the ongoing criminal investigation of Reddy Ice.

Home City Ice previously entered into a settlement agreement with the class action plaintiffs, agreeing to pay $13.5 million.

 

The Law Firm of Kotchen & Low LLP - Civil Litigation, Counseling, and Representation Before Government Agencies


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