In re Diisocyanates Antitrust Litig.
341 F. Supp. 3d 1376 (2018)
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Rule of Law:
Under 28 U.S.C. § 1407, civil actions pending in different federal districts that involve one or more common questions of fact may be transferred to a single district for coordinated pretrial proceedings if centralization serves the convenience of parties and witnesses and promotes the just and efficient conduct of the litigation.
Facts:
- Multiple chemical companies, including Bayer A.G. and BASF Corporation, manufactured and sold methylene diphenyl diisocyanate (MDI) and toluene diisocyanate (TDI) in the United States.
- MDI and TDI are key components used in a wide variety of polyurethane consumer and industrial products, such as insulation, mattress foams, and adhesives.
- Various corporate purchasers of these chemicals alleged that beginning in early 2015 or 2016, the defendant chemical companies engaged in a conspiracy to fix, raise, maintain, or stabilize the prices of MDI and TDI.
- The alleged conspiracy involved the defendants agreeing to limit the supply of these chemicals through coordinated, planned manufacturing shutdowns at plants worldwide.
- As part of the alleged conspiracy, the defendants also implemented coordinated price increases for MDI and TDI sold in the United States.
Procedural Posture:
- Multiple purchasers of industrial chemicals, including Utah Foam Products, Inc., filed separate antitrust lawsuits against numerous chemical manufacturers in at least three different U.S. District Courts (W.D. Pa., E.D. Mich., and D.N.J.).
- After the initial filings, the U.S. Judicial Panel on Multidistrict Litigation (JPML) was notified of nine additional related federal actions filed in other districts.
- A plaintiff in one of the actions filed a motion with the JPML, pursuant to 28 U.S.C. § 1407, to centralize all related actions for coordinated or consolidated pretrial proceedings.
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Issue:
Does centralization of multiple antitrust actions under 28 U.S.C. § 1407 serve the convenience of the parties and promote the just and efficient conduct of the litigation when all actions share common factual questions regarding an alleged nationwide conspiracy to fix prices?
Opinions:
Majority - Sarah S. Vance, Chair
Yes. Centralization is appropriate because the actions share complex common questions of fact regarding the alleged price-fixing conspiracy, and consolidation will serve convenience and judicial efficiency. The actions all arise from allegations of a conspiracy to fix prices for MDI and TDI. Centralizing these cases will eliminate duplicative discovery, which is expected to be international in scope, and prevent inconsistent pretrial rulings on critical issues like class certification and Daubert motions concerning expert testimony. This consolidation conserves the resources of the parties, their counsel, and the judiciary. The Western District of Pennsylvania is the most appropriate venue because one defendant is headquartered there, five others are located in nearby districts, and relevant documents and witnesses are likely to be found in or near the area.
Analysis:
This case is a standard application of the multidistrict litigation (MDL) statute, 28 U.S.C. § 1407, demonstrating the Judicial Panel on Multidistrict Litigation's (JPML) function in managing complex, sprawling litigation. The decision underscores the core purpose of the MDL process: to streamline pretrial proceedings for efficiency and consistency, particularly in antitrust cases where allegations involve a common conspiracy affecting numerous plaintiffs. The Panel's analysis for selecting the transferee district highlights the practical, logistical factors—such as the location of corporate headquarters, documents, and witnesses—that guide its venue decisions, prioritizing convenience and access to evidence.
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