INFO CENTER

Livestock Company Files for Vitamin Cartel Damages in Panama

A Panama dairy farming company has filed a class action claiming it was overcharged in the purchase of bulk vitamins as a result of pharmaceuticals company Hoffman-La Roche’s participation in a price fixing cartel.
Industrias Lacteas, which raises cattle for milk products, claims Roche overcharged it for vitamins used in animal feed between January 1992 and March 1998. Panamanian law allows corporate and individual claimants from Panama and abroad to join the claim as a class action.

According to a release by plaintiff’s firm Hausfeld LLP, whose Latin American partner firm, Rubio Alvarez Solis & Abrego filed the action, this is the first class action filed in Latin America against a non-Latin American defendant where foreign plaintiffs are allowed to join.

The class action follows a 1999 judgment by the US Department of Justice in which Roche agreed to pay $500 million for leading the conspiracy to fix prices and allocate market shares for several vitamins sold in the US and elsewhere. Three Roche executives also paid criminal fines and served prison sentences for their participation in the cartel.

In 2001, the European Commission fined Roche €462 million for its leading role in the price fixing and market sharing agreements, and because it participated in all of the vitamin cartels.

This is the second jurisdiction in which Hausfeld has attempted to bring a class action on behalf of foreign purchasers. In 2004, the Supreme Court ruled in Ecuadorean shrimp and tilapia company Empagran’s case against Hoffman-La Roche that foreign purchasers could not bring claims in US courts under the Sherman Act where the injuries suffered in their home jurisdictions were separate from any effect experienced in the US. 
 

John Taladay at Howrey LLP in Washington, DC, says the plaintiffs bar is using Panamanian law, as few foreign jurisdictions permit a cause of action specifically against cartelists, and still fewer allow class action litigation.

“This is a form of missionary work by the plaintiffs bar to convert foreign jurisdictions to the class action religion,” Taladay says. “Panamanian law purportedly allows foreign plaintiffs with similar claims to join in the Panamanian class action whereas in the US the plaintiffs bar failed in the Empagran case to get the courts to recognise foreign plaintiffs’ claims, except when the foreign defendants’ claims are integral to the US claim.”
Taladay says this could have been a measure taken in order to keep forum shopping out of the US. “The US doesn’t want to become the international court of law for antitrust class actions.”

Michael Hausfeld at Hausfeld LLP in Washington says other non-Panamanian purchasers are currently “in discussions” over joining the new claim. “If claims from foreign companies cannot be brought in the US, there are laws in Latin America that encourage and permit such claims,” he says. “More and more of these cases will be filed in jurisdictions other than the US and European Union, allowing companies to obtain compensation no matter where the violations have taken place.”
 

More information on this case: Vitamins

Practice Areas: Antitrust / Competition