Segal McCambridge Achieves $100 Million-Plus Settlement in U.S. Antitrust Class Action Case

News

January 30, 2013

Chicago, IL - The Segal McCambridge class action team, representing a group of U.S. farmers and small businesses, achieved a preliminary settlement of more than $100 million in Minn-Chem, Inc. et al. v. Agrium Inc. et al., a complex antitrust case against seven of the world's largest potash producers and distributors. The settlement will compensate for a 600% price increase in potash, an essential mineral used in farming around the world, inflicted upon United States farmers and agricultural businesses between 2003 and 2008.  The case is also significant in that it introduces new possibilities in e-discovery and clarifies the scope of United States foreign trade antitrust regulations.

Through the proposed settlement, Potash Corporation of Saskatchewan and The Mosaic Company will each pay $43.75 million. Agrium Inc. will pay $10 million. JSC Uralkali, on behalf of itself, JSC Silvinit, and their affiliates, agreed to settle in September 2012 for $10 million. Shareholder Steven Hart led the Segal McCambridge team, with assistance from shareholder Brian Eldridge and associates Elizabeth Schieber and Kyle Pozan.

Potash, a main ingredient in agricultural fertilizers, is a homogenous commodity, meaning each manufacturer offers the same product and buyers select their suppliers based on price. A small group of Canadian and Russian potash producers dominate the global market, controlling 71% of the world's supply. In 2008, Plaintiffs filed suit alleging that seven potash producers and distributors formed a global cartel to artificially drive up the price of potash. This resulted in a drastic price increase, which did not correlate to changes in the market demand for potash or the cost of production. Plaintiffs claimed the Defendants' concerted efforts to restrict free trade violated the Foreign Trade Antitrust Improvements Act (FTAIA).

After four years of tumultuous litigation, the Seventh Circuit Court of Appeals reheard the case en banc in July 2012 and subsequently passed a landmark antitrust ruling establishing that it is illegal for businesses to benchmark prices outside the United States, knowing that the inflated prices will have an adverse effect on U.S. commerce. The judges articulated this in the en banc opinion, stating, "Foreigners who want to earn money from the sale of goods or services in American markets should expect to have to comply with U.S. law" (Minn-Chem, Inc. v. Agrium Inc., 683 F.3d 845, 850 (7th Cir. 2012) (en banc). This interpretation of the FTAIA provides a critical clarification of the extent of U.S. antitrust law in international cases.

Minn-Chem is also significant in its use of e-discovery. The Plaintiffs' attorneys opened new avenues in the collection of electronic data, and their work called into question how far the courts should go to ensure efficient e-discovery research.

In many U.S. antitrust cases, the U.S. Department of Justice has already initiated an investigation and its findings are available to the attorneys on the case. This was not the case in Minn-Chem. Plaintiffs' attorneys relied entirely on their own knowledge, resources, and research to further the case. In more ways than one, Minn-Chem represented a real-life David vs. Goliath scenario. The Plaintiffs' counsel's diligent efforts will make it possible for hundreds of farmers and small businesses to benefit from a nine-figure settlement and stricter controls over potash pricing in the future.