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In re Chocolate Confectionary Antitrust Litigation

April 8, 2009

IN RE: CHOCOLATE CONFECTIONARY ANTITRUST LITIGATION


The opinion of the court was delivered by: Judge Conner

THIS DOCUMENT APPLIES TO: ALL CASES

MDL DOCKET No. 1935

MEMORANDUM

Presently before the court is defendants' motion (Doc. 588) to certify an interlocutory appeal from the memorandum and order of court (Doc. 582) dated March 4, 2009 (hereinafter "the March 4 Memorandum"). For the reasons that follow, the motion will be granted.

I. Procedural History and Background*fn1

Plaintiffs in the above-captioned matters allege that defendants conspired to fix prices in the United States market for chocolate candy in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. Defendants allegedly implemented three coordinated prices increases from 2002 to 2007, raising prices in nearly identical proportion to one another on each occasion. During the same period, formidable barriers to entry protected the chocolate candy market, defendants' raw material costs remained stable, and consumer demand waned, thereby providing defendants with the market power and motive to act in an anticompetitive manner.

Defendants also allegedly engaged in price fixing in Canada. In mid-2007, Canadian antitrust authorities released documents depicting an orchestrated conspiracy by defendants' Canadian subsidiaries to exchange pricing information, control retail promotion costs, and implement price increases in the Canadian chocolate market. Defendants have allegedly integrated their American and Canadian operations through, inter alia, coordinated manufacturing and distribution systems, cross-border licensing agreements, and fusion of corporate oversight. Plaintiffs contend that, in light of this market integration, evidence of defendants' Canadian conduct lends plausibility to the alleged pricing conspiracy in the United States.

All defendants filed motions to dismiss the amended complaints pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. On March 4, 2009, the court denied the motions of certain defendants*fn2 under the Supreme Court's recent decision in Bell Atlantic Co. v. Twombly, 550 U.S. 544 (2007). (See Doc. 582, Part III.B.1.) Defendants presently move to certify an interlocutory appeal of the court's application of Twombly. The parties have fully briefed the motion, which is now ripe for disposition.

II. Discussion

Denials of motions to dismiss are not final orders, and a losing party may not ordinarily pursue an immediate appeal from them. Nevertheless, a court may certify a non-final order for interlocutory appeal under 28 U.S.C. § 1292(b) if (1) the order "involves a controlling question of law," (2) "a substantial ground for difference of opinion" exists with regard to the issue involved, and (3) an immediate appeal "may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b); Simon v. United States, 341 F.3d 193, 199 (3d Cir. 2003). The certification decision rests with the discretion of the district court, and the court may decline to certify an order even if the parties have satisfied all elements enumerated in the statute. Knipe v. SmithKline Beecham, 583 F. Supp. 2d 553, 599 (E.D. Pa. 2008); L.R. v. Manheim Twp. Sch. Dist, 540 F. Supp. 2d 603, 608 (E.D. Pa. 2008).

A. Criteria for Certification under 28 U.S.C. § 1292(b)

Defendants in the present matter request certification of the following two issues for interlocutory appeal:

(1) [W]hether Twombly, as a matter of antitrust law, allows a court on a motion to dismiss to draw an inference of conspiracy in a parallel pricing case based on market characteristics, absent any direct allegations of actual agreement; and

(2) [W]hether allegations stemming from a foreign antitrust investigation can lend "plausibility" under Twombly to ...


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