In re Chocolate Confectionary Antitrust Litigation

674 F.Supp.2d 580

In re CHOCOLATE CONFECTIONARY ANTITRUST LITIGATION This Document Applies to: All Cases.

MDL Docket No. 1935.

Civil Action No. 1:08-MDL-1935.

United States District Court, M.D. Pennsylvania.

December 2, 2009.

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Joseph Goldberg, Freedman Boyd Hollander Goldberg & Ives, P.A., Albuquerque, NM, Steven A. Kanner, Freed Kanner London & Millen LLC, Bannockburn, IL, Richard L. Coffman, The Coffman Law Firm, Beaumont, TX, Thomas A. Muzilla, The Muzilla Law Firm LLP, Cleveland, OH, David P. Germaine, Vanek Vickers & Masini PC, Amber M. Nesbitt, Edward A. Wallace, Kenneth A. Wexler, Wexler Wallace LLP, Adam J. Levitt, Mary J. Fait, Wolf Haldenstein Adler Freeman & Herz LLC, Chicago, IL, Mark S. Goldman, Goldman Scarlato & Karon PC, Conchohocken, PA, Brian Wade McKay, Daniel H. Gold, Lawrence Andrew Gaydos, Haynes and Boone, Barry C. Barnett, Susman Godfrey LLP, Dallas, TX, Joseph R. Gunderson, Jason D. Walke, Gunderson Sharp & Walke LLP, Des Moines, IA, Mark S. Shane, Shane and White, LLC, Edison, NJ, James J. McCarthy, Jr., McCarthy Weisberg Cummings, P.C., Steven D. Shadowen, Eric L. Bloom, Hangley Aronchick Segal & Pudlin, Jane Gowen Penny, Killian & Gephart, LLP, Lee C. Swartz, Stephen M. Greecher, Jr., Tucker, Arensberg, P.C., James J. McCarthy, Jr., McCarthy Weisberg Cummings, P.C., Joseph U. Metz, Joshua D. Wolson, Dilworth Paxson LLP, Walter W. Cohen, Obermayer Rebmann Maxwell & Hippel LLP, Harrisburg, PA, Benjamin F. Johns, Chimicles & Tikellis LLP, Haverford, PA, Stephen D. Susman, Susman & Godfrey, LLP, Houston, TX, Krishna B. Narine, Law Office of Krishna B. Narine, PC, Huntingdon Valley, PA, Arthur N. Bailey, Arthur N. Bailey & Associates, James-town, NY, Gordon Ball, Ball & Scott, Knoxville, TN, Dianne M. Nast, Roda & Nast, P.C., Lancaster, PA, Bernice Conn, Los Angeles, CA, Michael A. Geibelson, Roman M. Silberfeld, Robins Kaplan Miller & Ciresi LLP, Jayne A. Goldstein, Shepherd, Finkelman, Miller & Shah, LLP, Media, PA, Douglas H. Patton, James T. Almon, Richard Alan Arnold, Scott E. Perwin, William J. Blechman Kenny Nachwalter, P.A., Miami, FL, Aaron M. McParlan, James S. Reece, Michael E. Jacobs, Richard M. Hagstrom, Zelle, Hofmann, Voelbel, Mason & Getter LLP, K. Craig Wildfang, Robins, Kaplan, Miller & Ciresi LLP, Jason S. Kilene, Gustafson Gluek PLLC, Minneapolis, MN, Clinton P. Walker, Fred A. Silva, Kathy L. Monday, Roger M. Shrimp, Damrell, Nelson, Schrimp, Pallios, Pacher & Silva, Modesto, CA, W. Joseph Bruckner, Lockridge, Grindal & Nauen, Michael M. Buchman, Pomerantz Haudek Block Grossman & Gross LLP, Klari Neuwelt, Law Office of Klari Neuwelt, Bernard Persky, Gregory S. Asciolla, Morissa R. Falk, Gregory S. Asciolla, Labaton Sucharow LLP, Seth R. Gassman, Cohen, Milstein, Hausfeld & Toll, PLLC, Linda Nussbaum, Robert N. Kaplan, Kaplan Fox & Kilsheimer LLP, Beverly L. Tse, Daniel Hume, David E. Kovel, Peter S. Linden, Kirby McInerney LLP, Paul F. Novak, Milberg LLP, Ronald J. Aranoff, Bernstein Liebhard & Lifshitz, LLP, New York, NY, Fred T. Isquith, Wolf Haldenstein Adler Freeman & Herz LLP, Craig M. Essenmacher, Peggy J. Wedgworth, Christopher Lovell, Lovell Stewart Halebian, LLP, David S. Stellings, New York, NY, Gregory P. Hansel, Joshua R. Carver, Randall B. Weill, Preti, Flaherty, Beliveau, Pachios & Haley, LLC, Portland, ME, Roger P. Poorman, Steven Dane Irwin, David V. Weicht, Leech Tishman Fuscaldo & Lampl, Pittsburgh, PA, Adam S. Levy, Donald E. Haviland, Michael J. Lorusso, The Haviland Law Firm LLC, Christopher H. Casey, Dilworth Paxson, Jonathan Shub, Seeger Weiss LLP, Joseph T. Lukens, Hangley, Aronchick, Segal & Pudlin, Douglas A. Abrahams, William E. Hoese, Kohn Swift & Graf, P.C., Simon B. Paris, Saltz, Mongeluzzi, Barrett & Bendesky, P.C., Adam J. Pessin, Allen D. Black, Gerard A. Dever, Jeffrey S. Ist-van, Ria C. Momblanco, Roberta D. Liebenberg, Donald L. Perelman, Fine Kaplan and Black, R.P.C., Howard J. Sedran, Levin, Fishbein, Sedran & Berman, Anthony J. Bolognese, Joshua H. Grabar, Bolognese& Associates, LLC, Bryan L. Clobes, Cafferty Faucher LLP, Eugene A. Spector, Jay S. Cohen, William G. Caldes, Spector Roseman Kodroff & Willis, P.C., Ruthanne Gordon, H.L. Montague, Jr., Berger & Montague, PC, Mark R. Cuker, Williams Cuker Berezofsky, Jeffrey B. Gittleman, Barrack, Rodos & Bacine, Philadelphia, PA, Mark J. Tamblyn, Wexler Toriseva Wallace LLP, Sacramento, CA, Bonny E. Sweeney, Coughlin Stoia Geller Rudman & Robbins LLP, San Diego, CA, Joseph M. Patane, Law Office of Joseph M. Patane, Lauren Clare Russell Trump Alioto Trump & Prescott, LLP Dean M. Harvey, Lieff Cabraser Heimann & Bernstein LLP, Aaron M. Sheanin, Elizabeth C. Pritzker, Girard Gibbs LLP, Allan Steyer, Henry A. Cirillo, Jayne A. Peeters, Steyer Lowenthal Boodrookas Alvarez & Smith LLP, Bruce L. Simon, Pearson, Simon, Warshaw & Penny, LLP, Richard A. Saveri, Saveri & Saveri, Inc., Michael A. McShane, Audet & Partners, LLP, Adam C. Belsky, Terry Gross, Gross Belsky Alonso LLP, San Francisco, CA, R. Laurence Macon, Akin, Gump, Strauss, Hauer & Feld, et al., San Antonio, TX, Michael J. Flannery, Carey & Danis, LLC, St. Louis, MO, Rachel S. Black, Susman Godfrey, LLP, Seattle, WA, Kevin B. Love, Criden & Love, P.A., South Miami, FL, Tanya S. Chutkan, William A. Isaacson, Boies, Schiller & Flexner LLP, Richard L. Wyatt, Jr., Todd M. Stenerson, Torsten M. Kracht, Hunton & Williams, Kevin J. Miller, Kfir B. Levy, Steven F. Benz, Andrew M. Hetherington, Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Hilary K. Ratway, Michael D. Hausfeld, Robert G. Eisler, Hilary K. Ratway, Hausfeld LLP, Elizabeth K. Tripodi, Richard M. Volin, Finkelstein Thomspon LLP, Daniel A. Small, Christopher J. Cormier, Cohen Milstein Sellers & Toll PLLC, Washington, DC, Joseph B. Smith, Michael C. Maher, Steven R. Maher, The Maher Law Firm, Winter Park, FL, Kevin P. Roddy, Wilentz Goldman & Spitzer P.A., Woodbridge, NJ, Rees Griffiths, CGA Law Firm, York, PA, for Plaintiffs.

Kelvin D. Chen, Leah A. Ramos, Morrison & Foerster LLP, New York, NY, Alan R. Boynton, Jr., James P. DeAngelo, Kimberly M. Colonna, Kimberly A. Selemba, McNees, Wallace & Nurick, Harrisburg, PA, Brian M. English, Tompkins, McGuire, Wachenfeld & Barry, LLP, Newark, NJ, Nicole L. Castle, Stefan M. Meisner, McDermott Will & Emery LLP Jonathan D. Brightbill Thomas D. Yannucci Craig S. Primis, Kirkland & Ellis LLP, Washington, DC, Frederick E. Blakelock, Guy V. Amoresano, Jennifer Mara, Michael F. Quinn, Thomas S. Brown, Gibbons, P.C., Philadelphia, PA, for Defendants.

MEMORANDUM

CHRISTOPHER C. CONNER, District Judge.

This multidistrict matter arises from defendants' alleged attempts to fix prices for chocolate confectionary products in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Plaintiffs contend that defendants, who control approximately 75% of the U.S. chocolate candy market, conspired to inflate prices artificially and reaped windfall profits as a result of several coordinated price increases implemented between 2002 and 2007.

All defendants filed motions to dismiss (Docs. 464, 469, 476) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A subset of defendants comprised of Cadbury plc, Cadbury Holdings Ltd. ("Cadbury Holdings"), Mars Canada, Inc. ("Mars Canada"), Nestlé S.A., and Nestlé Canada, Inc. ("Nestlé Canada") also challenged the court's personal jurisdiction under Rule 12(b)(2). (See Docs. 466, 471, 473, 474.) These defendants (hereinafter collectively "the Rule 12(b)(2) defendants") allege that they do not engage in business in the United States, maintain no presence here, and are therefore beyond the court's jurisdictional ken. On March 3, 2009, the court deferred ruling on these issues and granted plaintiffs a period of limited discovery to develop a factual basis for jurisdiction over the Rule 12(b)(2) defendants. See In re Chocolate Confectionary Antitrust Litig. (Chocolate I), 602 F.Supp.2d 538, 573-74, 577 (M.D.Pa.2009). Discovery closed on April 24, 2009, and all parties to the Rule 12(b)(2) motions submitted supplemental briefs and accompanying exhibits. For the reasons that follow, the jurisdictional motions of Mars Canada, Nestlé S.A., and Nestlé Canada will be granted; the motions filed by Cadbury plc and Cadbury Holdings will be denied.

I. Factual Background¹

The Rule 12(b)(2) defendants share many characteristics pertinent to the jurisdictional analysis. None of the Rule 12(b)(2) defendants own real property in the United States, none of them have bank accounts here, and none of them maintain a stateside workforce. They do not sell chocolate or other products directly to American consumers, and they do not have manufacturing facilities within U.S. borders. Nevertheless, plaintiffs contend that their ties to the United States place them within the court's jurisdictional reach. It is to these contacts that the court now turns.

A. Mars Canada

Mars Canada is an indirectly owned operating subsidiary of defendant Mars, Inc. ("Mars Global") that manufactures and distributes Mars-branded products in Canada. (Doc. 622, Ex. 2 at 68-69, 83; Doc. 622, Ex. 33.) It employs more than 460 individuals, all of whom work in Canada. (Doc. 622, Ex. 2 at 93-94; Doc. 622, Ex. 11.) Mars Canada is required to obtain the approval of Mars Global for its annual budget, for capital expenditures in excess of $500,000, and for executive appointments and compensation packages. (Doc. 622, Ex. 2 at 153-55, 159; see also Doc. 622, Ex. 17 §§ 2.9.1, .4; Doc. 622, Exs. 27-31, 34-35.)

Mars Canada periodically transfers its profits to Mars Global or to other Mars entities in the U.S. through dividend payments or through an asset-transfer process known as "capital repatriation."² (Doc. 622, Ex. 2 at 82, 86.) Either Mars Global or Mars Canada may...