According to a local news report, direct purchasers of chocolate from Hershey, Mars, Cadbury Schweppes, and Nestle have started filing price-fixing cases and pleading for class action treatment.
Venue. Two of the cases are pending in Harrisburg, Pennsylvania, federal court — just down the road from the Hershey headquarters in, uh, Hershey, Pennsylvania. A third putative class action is in the U.S. District Court for the District of New Jersey. Blawgletter expects that, before long, someone will discover that one of the defendants has its main U.S. offices in California.
The report suggests that the filing lawyers have relied on the issuance of search warrants in Canada and on disclosures that the U.S. Antitrust Division of the Justice Department has opened an investigation of its own. Smoke and fire, you know.
What happens next? Others will file chocolate price-fixing cases, probably near locations where the chocolatiers have their U.S. headquaters. A party or parties will petition the Judicial Panel on Multidistrict Litigation to move all the lawsuits to one federal judge for all pretrial purposes. The seven federal judges on the Panel gather six times a year to consider just such requests.
Organization. Plaintiffs counsel will at the same time attempt "private ordering". Which means that they will try to negotiate an arrangement that nominates a group of firms as "co-lead counsel" and other firms as members of various committees, possibly including an executive committee, a discovery committee, an experts committee, and a briefing committee, among others. The bargaining often leads to submission of a consensus plan — usually in the form of a "Pretrial" or "Practice and Procedure" order — to the lucky "transferee" judge to whom the Panel sends the cases. His or Her Honor may reject or modify such a plan, thus wielding authority that tends to discourage complex or inefficient organization structures.
Sometimes private ordering doesn’t work, and a fight breaks out. The transferee judge then has to select the best organization of plaintiffs’ counsel for the case. Usually the best trial lawyers win such contests. Those victories tend to assure that consensus structures do, indeed, include capable trial counsel and not simply pretrial litigators.
A lot more will occur of course — not least retention of superb defense counsel, hiring of economics experts, contacting of potential witnesses, and gathering of evidence.
The goal. The cases aim to recover overcharges that resulted from a price-fixing conspiracy. In an industry that sells billions of dollars of products in the U.S. each year, the damages could run into the hundreds of millions or even more than $1 billion. Treble that — automatic under federal antitrust law — and pretty soon you’re talking real money.
Blawgletter will continue watching developments in what we expect will soon get a name like "In re Chocolate Price-Fixing Litigation".
We even expect to be involved in it. Sweet.
