FARMER PRICE-FIXING SUIT GETS GREEN LIGHT
Jun 16, 1999
Appeals court overturns ruling in Mobile, says five Alabama farmers still
have case against American Cyanamid
By EDDIE CURRAN
Five Alabama farmers call proceed with their nationwide class action lawsuit that accuses American Cyanamid of a scheme to fix prices oil the sale of its herbicides and pesticides, a federal appeals court ruled last week.
Mobile-based U.S. District Court Brevard Hand had dismissed the farmers' case oil the grounds that the lawsuit failed to include as defendants some 2,500 dealers who distributed American Cyanamid products.
At issue in the case is tile sale of chemicals used by farmers to protect their crops from insects and other crop-killing pests and plants. The anti-trust claims, brought oil behalf of as many as 100,000 farmers nationwide, are potentially worth tens of millions of dollars to the plaintiffs.
The plaintiffs, represented by lawyers from California and Georgia, and locally by the Mobile firm of Cunningham, Bounds, Yance, Crowder & Brown, went to the U.S. Court of Appeals for the 11th Circuit In Atlanta, which reversed Hand's ruling and sent tile case back to his court.
The lawsuit claims that American Cyanamid engaged in a vertical price-fixing conspiracy, as opposed to a horizontal price-fixing conspiracy involving secret deals with other producers.
According to the plaintiffs, American Cyanamid initiated two similar programs with tile dealers who sold tile company's products front 1989 to 1995. The company agreed to pay tile dealers a rebate oil each sale, tinder the condition that the dealers sold the products at or above sales prices dictated by American Cyanamid. These rebate agreements inflated tile prices that farmers paid for tile products, and constituted a violation of federal trade laws, the plaintiffs contend.
American Cyanamid, in asking Hand to dismiss the case, argued that the farmers could not just sue
American Cyanamid, but also must include the distributors as defendants. Hand agreed, and dismissed tile lawsuit.
The appeals court decision overturning Hand's ruling doesn't declare that American Cyanamid did or did not fix prices; it only states that Hand's reasoning for dismissing the case was incorrect, and that the plaintiffs may pursue the court action.
Though a major victory for the Mobile lawsuit, a recent development in Tennessee could sideline the lawsuit. While tile case was oil appeal, American Cyanamid settled in almost identical nationwide class action lawsuit brought against it in a' - state court In Tennessee. A state court judge approved the settlement, which forces tile company to pay $5.2 million, a third of which will be paid to the plaintiffs lawyers.
The plaintiff lawyers In the Mobile case had tip-get the Tennessee court not to approve tile settlement. They argued that American Cyanamid was willing to go along with the settlement only because it allowed the company to pay far less than it might otherwise have to pay in the Mobile case.