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849061.5

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS

IN RE: POTASH ANTITRUST LITIGATION (II)

MDL Docket No. 1996

Case No. 08-cv-6910 (Consolidated with 08-cv-5635)

Date: December 11, 2012 Time: 10:00 a.m. CTRM: 2141

Judge R. Castillo

THIS DOCUMENT APPLIES TO:

DIRECT PURCHASER ACTIONS

DIRECT PURCHASER PLAINTIFFS’ MOTION TO PRELIMINARILY APPROVE SETTLEMENT WITH

DEFENDANTS JSC URALKALI AND JSC SILVINIT AND TO CONDITIONALLY CERTIFY SETTLEMENT CLASS AND APPROVE CLASS NOTICE PROGRAM

Case: 1:08-cv-06910 Document #: 444 Filed: 11/26/12 of 29 PageID #:5811

849061.5 i

TABLE OF CONTENTS

Page

I. INTRODUCTION ........................................................................................................................1

II. PROCEDURAL HISTORY ........................................................................................................2

A. THE LITIGATION TO DATE ................................................................................2

B. THE URALKALI AND SILVINIT SETTLEMENT AGREEMENT ....................4

III. ARGUMENT .............................................................................................................................5

A. CLASS ACTION SETTLEMENT PROCEDURE. ................................................5

B. THE PROPOSED SETTLEMENT IS WITHIN THE RANGE OF

POSSIBLE APPROVAL AND SHOULD BE PRELIMINARILY

APPROVED UNDER FED. R. CIV. P. 23(e). ........................................................6

C. THE COURT SHOULD PRELIMINARILY CERTIFY THE

SETTLEMENT CLASS. .......................................................................................10

1. The Requirements of Rule 23(a) Are Satisfied. .........................................10

a. The Class Is So Numerous That Joinder Is Impracticable. ............10

b. vcThere Are Questions of Law and Fact Common to the

Class. ..............................................................................................11

c. Plaintiffs' Claims Are Typical of the Claims of the Class. ............12

d. Plaintiffs Will Fairly and Adequately Represent the

Interests of the Class. .....................................................................13

2. The Proposed Settlement Class Satisfies Rule 23(b)(3). ...........................14

a. Common Questions of Law and Fact Predominate Over

Individual Questions. .....................................................................15

b. A Class is Superior To Any Other Method of Adjudicating

This Case. .......................................................................................16

D. INTERIM CO-LEAD CLASS COUNSEL SHOULD BE APPOINTED

AS SETTLEMENT CLASS COUNSEL. ..............................................................16

E. PLAINTIFFS’ PROPOSED CLASS NOTICE PROGRAM MEETS THE

REQUIREMENTS OF RULE 23(e). .....................................................................17


849061.5 ii

F. THE COURT SHOULD SCHEDULE A FINAL APPROVAL

HEARING..............................................................................................................19

IV. CONCLUSION........................................................................................................................21


849061.5 iii

TABLE OF AUTHORITIES

Page(s)

CASES

Am. Int'l Grp., Inc. v. ACE INA Holdings, Inc.,

Nos. 07 C 2898, 09 C 2026, 2011 WL 3290302 (N.D. Ill. July 26, 2011) ............................6, 9

Amchem Prods., Inc. v. Windsor,

521 U.S. 591 (1997) ...............................................................................................10, 15, 16, 18

Bell Atlantic Corp v. Twombly,

550 U.S. 544 (2007) ...................................................................................................................3

Burlington Indus., Inc. v Milliken & Co.,

690 F.2d 380 (4th Cir. 1982) .....................................................................................................8

City of Greenville v. Syngenta Crop Prot.,

No. 3:10-cv-188, 2012 WL 1948153 (S.D. Ill. May 30, 2012) ...................................17, 18, 19

E.E.O.C. v. Hiram Walker & Sons, Inc.,

768 F.2d 884 (7th Cir. 1985) .....................................................................................................6

Eggleston v. Chicago Journeymen Plumbers' Local Union No. 130,

657 F.2d 890 (7th Cir. 1981) ...................................................................................................13

Hubler Chevrolet, Inc. v. Gen. Motors Corp.,

193 F.R.D. 574 (S.D. Ind. 2000) ..............................................................................................11

Hughes v. Baird & Warner, Inc.,

No. 76 C 3929, 1980 WL 1894 (N.D. Ill. Aug. 20, 1980) .......................................................15

In re AT&T Mobility Wireless Data Servs. Sales Litig.,

270 F.R.D. 330 (N.D. Ill. 2010) .............................................................................................6, 8

In re Baldwin-United Corp.,

105 F.R.D. 475 (S.D.N.Y. 1984) .............................................................................................10

In re Bromine Antitrust Litig.,

203 F.R.D. 403 (S.D. Ind. 2001) ..........................................................................................6, 16

In re Carbon Black Antitrust Litig.,

No. CIV.A.03-10191-DPW, MDL No. 1543, 2005 WL 102966 (D. Mass. Jan. 18,

2005) ..................................................................................................................................15, 16

In re Corrugated Container Antitrust Litig.,

643 F.2d 195 (5th Cir. 1981) ...................................................................................................14


849061.5 iv

In re Corrugated Container Antitrust Litig.,

MDL 310, 1981 WL 2093 (S.D. Tex. June 22, 1981) ...........................................................7, 9

In re Drexel Burnham Lambert Grp., Inc.,

960 F.2d 285 (2d Cir. 1992).....................................................................................................13

In re Foundry Resins Antitrust Litig.,

242 F.R.D. 393 (S.D. Ohio 2007) ......................................................................................15, 16

In re Linerboard Antitrust Litig.,

292 F. Supp. 2d 631 (E.D. Pa. 2003) .....................................................................................7, 8

In re Mercedes-Benz Antitrust Litig.,

213 F.R.D. 180 (D.N.J. 2003) ..................................................................................................13

In re Packaged Ice Antitrust Litig.,

No. 08-MD-01952, 2011 WL 717519 (E.D. Mich. Feb. 22, 2011) .....................................7, 17

In re Potash Antitrust Litig.,

667 F. Supp. 2d 907 (N.D. Ill. 2009) ...................................................................................3, 14

In re Pressure Sensitive Labelstock Antitrust Litig.,

584 F. Supp. 2d 697 (M.D. Pa. 2008) ........................................................................................7

In re Ready-Mixed Concrete Antitrust Litig.,

261 F.R.D. 154 (S.D. Ind. 2009) ..................................................................................11, 12, 13

Isby v. Bayh,

75 F.3d 1191 (7th Cir.1996) ..................................................................................................6, 8

Johns v. DeLeonardis,

145 F.R.D. 480 (N.D. Ill. 1992) ...............................................................................................11

Keele v. Wexler,

149 F.3d 589 (7th Cir. 1998) ...................................................................................................12

Levitan v. McCoy,

No. 00-C-5096, 2003 WL 1720047 (N.D. Ill. Mar. 31, 2003) ................................................10

Minn-Chem, Inc. v. Agrium, Inc.,

657 F.3d 650 (7th Cir. 2011) .....................................................................................................3

Minn-Chem, Inc. v. Agrium, Inc.,

683 F.3d 845 (7th

Cir. 2012) ..................................................................................................2, 4

Ruiz v. Stewart Assoc., Inc.,

171 F.R.D. 238 (N.D. Ill. 1997) ...............................................................................................12


849061.5 v

Scholes v. Stone, McGuire & Benjamin,

143 F.R.D. 181 (N.D. Ill. 1992) ...............................................................................................10

Stoller v. Baldwin-United Corp.,

650 F. Supp. 341 (S.D. Ohio 1986) .........................................................................................18

Wahl v. Midland Credit Management, Inc.,

243 F.R.D. 291 (N.D. Ill. 2007) ...................................................................................13, 14, 15

Weseley v. Spear, Leeds & Kellogg,

711 F. Supp. 713 (E.D.N.Y. 1989) ............................................................................................8


849061.5 1

Direct Purchaser Plaintiffs ("DPPs") hereby move this Court for entry of an order (1)

preliminarily approving the settlement reached with defendants JSC Uralkali and JSC Silvinit;

(2) certifying a settlement class; (3) appointing Interim Co-Lead Class Counsel as Class Counsel;

(4) appointing the named Plaintiffs as Class Representatives; (5) directing the distribution of

notice of the settlement to the Settlement Class to provide Settlement Class Members with the

opportunity to opt out and to object to the proposed settlement; and (6) setting a schedule for

final approval of the proposed settlement.

I. INTRODUCTION

Direct Purchaser Plaintiffs (“DPPs”) have reached an initial “icebreaker” settlement in

this class action with Defendants JSC Uralkali (“Uralkali”) and the company formerly known as

JSC Silvinit (“Silvinit) (collectively the “Settling Defendants”).1 In return for the release of

claims by DPPs and the proposed Settlement Class against Settling Defendants and their

affiliates, including Defendants JSC International Potash Company (“IPC”), JSC Belarusian

Potash Company and BPC Chicago, LLC (“BPC”), Defendant Uralkali has agreed to pay $10

million for the benefit of the Class. The Settling Defendants have also agreed to cooperate with

DPPs by providing proffers of facts, documents, and witness interviews and testimony regarding

the allegations in DPPs’ Complaint as specified in the Settlement Agreement.

DPPs’ Co-Lead Counsel respectfully submit that this substantial cash payment and

Settling Defendants’ cooperation provide a material benefit to the proposed Settlement Class,

and represents an excellent result for the class as an initial settlement. Moreover, this agreement

will obviate substantial issues and obstacles in discovery and judgment collection against the

Settling Defendants.

1 The Settlement Agreement dated Sept. 20, 2012, is attached as Exhibit A to Declaration of Bruce L.

Simon In Support of Plaintiffs' Motion for Preliminary Approval of Settlement With Defendants JSC

Uralkali and JSC Silvinit and to Conditionally Certify Settlement Class and Approve Class Notice

Program (“Simon Decl.”), filed herewith.


849061.5 2

This agreement was reached only after extensive arms-length negotiations. These

negotiations occurred after DPPs’ Class Counsel researched, analyzed and evaluated the

numerous factual and legal issues involved in this case. Even though merits discovery has only

recently commenced, Class Counsel have litigated the case for four years, including significant

prefiling investigation and conducting pre-trial proceedings with Defendants as well as an

extensive amount of appellate practice. Simon Decl. ¶ 10. See Minn-Chem, Inc. v. Agrium, Inc.,

683 F.3d 845 (7th

Cir. 2012).

As established below, the proposed settlement is well within the range of reasonableness,

and the proposed Settlement Class meets the requirements of Fed. R. Civ. P. 23. Accordingly,

DPPs respectfully request that the Court (1) preliminarily approve the Settlement Agreement, (2)

certify a Settlement Class, (3) appoint Interim Co-Lead Class Counsel as Class Counsel; (4)

appoint the named Plaintiffs as Class Representatives; (5) direct the distribution of notice of the

settlement to the Settlement Class to provide Class Members with the opportunity to opt out and

to object to the settlement; and, (6) set a schedule for final approval of the settlement.

II. PROCEDURAL HISTORY

A. THE LITIGATION TO DATE

DPPs' Complaint alleges that Defendants and others conspired to restrict supply and fix

prices of potash sold to U.S. purchasers in violation of Section One of the Sherman Antitrust

Act, 15 U.S.C. § 1.2

The first of these coordinated cases was filed on September 11, 2008. Simon Decl. ¶3.

On December 2, 2008, the Judicial Panel on Multidistrict Litigation transferred related actions to

2 Direct Purchaser Amended Consolidated Class Action Complaint (ECF No. 142), ¶¶159-65.


849061.5 3

this Court.3 On April 23, 2009, this Court granted Defendants’ motion (ECF Nos. 26, 27) to stay

discovery until further order,4 and granted Plaintiffs’ motion (ECF No. 41) for alternative service

of process on those Defendants located in the Russian Federation (ECF No. 64). Id.. Defendants

thereupon moved to dismiss Plaintiffs’ Complaint under Fed. R. Civ. P. 12 (ECF Nos. 104, 107,

127, 135). Id.

After extensive briefing, on November 4, 2009, the Court denied Defendants’ motions to

dismiss DPPs’ Complaint, including the Russian Defendants’5

motions to dismiss, and set a

deadline for the completion of the initial phase of discovery. ECF Nos. 201-02.6 Id., ¶4. In

March 2010, Defendants obtained not only a further stay of discovery but an interlocutory appeal

(ECF No. 294) of this Court’s Order upholding DPPs’ Complaint. Defendants appealed both this

Court’s determination that DPPs’ allegations were sufficient under Bell Atlantic Corp v.

Twombly, 550 U.S. 544 (2007), and its determination that the Foreign Trade Antitrust

Improvements Act of 1982 (“FTAIA”), 15 U.S.C. § 6a, did not bar DPPs’ claims. Id. ¶5. A year

later, in March 2011, this Court lifted the stay of discovery (ECF No. 329), but on Defendants’

emergency motion, the Court of Appeals further stayed discovery pending resolution of the

appeal (ECF No. 331). Id., ¶6.

Finally, more than two and one-half years after this Court upheld DPPs’ Complaint, and

following a reversal by a panel of the Court of Appeals7 and DPPs’ petition for rehearing en

3 Transfer Order, MDL No. 1996 (JPML Dec. 2, 2008).

4 Plaintiffs have consistently opposed discovery stays. E.g., Direct And Indirect Purchaser

Plaintiffs’ Memorandum In Opposition To Defendants’ Motion To Stay Discovery (March 10,

2009) (ECF No. 39).

5 The company formerly known as JSC Silvinit, JSC International Potash Company, and JSC

Uralkali, (collectively, the “Russian Defendants”).

6 In re Potash Antitrust Litig., 667 F. Supp. 2d 907, 937 n.26 (N.D. Ill. 2009).

7 Minn-Chem, Inc. v. Agrium, Inc., 657 F.3d 650 (7th Cir. 2011).


849061.5 4

banc, the Court of Appeals en banc vacated the panel decision and affirmed this Court.8 This

Court promptly ordered discovery to proceed, and set a settlement conference with all parties.

ECF No. 390. Discovery is now underway.

B. THE URALKALI AND SILVINIT SETTLEMENT AGREEMENT

Initial settlement discussions between counsel for DPPs and the Settling Defendants9

began several months ago. After extensive, arms-length and hard-fought negotiations, Settling

Defendants and DPPs’ Class Counsel reached an agreement. Simon Dec., Ex. A (Settlement

Agreement). Defendant Uralkali agreed to pay $10 million for the benefit of the DPP Settlement

Class into an interest-bearing escrow account 45 days after execution of the Settlement

Agreement. The settlement agreement provides that a maximum of $250,000 may be used for

notice and claims administration expenses after preliminary approval. Id. ¶¶6, 15, 18.

Settling Defendants also agreed to cooperate with DPPs’ Class Counsel in their ongoing

prosecution of the case against the non-settling Defendants. Settling Defendants’ counsel will

provide attorney’s proffers of facts known to them, and produce documents regarding their sales,

pricing, production, and their meetings, communications, and cooperation with co-conspirators

as specified in the Settlement Agreement. Settling Defendants will make up to nine witnesses

available for interviews, video depositions, and testimony. Id. ¶23. In exchange, DPPs will

release all claims which were or could have been brought in this action against the Settling

Defendants, Uralkali and Silvinit, as well as their affiliates, including Defendants JSC

8 Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012).

9 JSC Silvinit was, prior to its merger with JSC Uralkali, a Russian company headquartered in

Solikamsk, Russia, that sells potash around the world. JSC Uralkali is a Russian firm

headquartered in Moscow, and half owner of Belarusian Potash Company, RUE PA

Belaruskali’s distributor. Complaint ¶¶ 24, 26, 29.


849061.5 5

International Potash Company (“IPC”), JSC Belarusian Potash Company, BPC Chicago, LLC,

and BPC’s affiliate, RUE PA Belaruskali. Id. ¶3, 13, 14.

III. ARGUMENT

A. CLASS ACTION SETTLEMENT PROCEDURE.

A class action may not be dismissed, compromised, or settled without the Court’s

approval. Judicial proceedings under Fed. R. Civ. P. 23 have led to a defined procedure and

specific criteria for approval of class action settlements. Approval of a class settlement under

Rule 23(e) consists of three steps:

1. Certification of a settlement class and preliminary approval of the proposed

settlement;

2. Dissemination of notice of the settlement to all affected class members; and,

3. A formal fairness hearing, also called the final approval hearing, at which class

members may be heard regarding the settlement, and at which counsel may introduce evidence

and present argument concerning the fairness, adequacy, and reasonableness of the settlement.

This procedure safeguards class members' procedural due process rights and enables the

Court to fulfill its role as the guardian of class interests. See 4 Newberg on Class Actions §§

11.22 et seq. (4th

ed. 2002) ("Newberg") (describing class action settlement procedure).

By way of this motion, Plaintiffs ask the Court to take the first step in the settlement

process and certify a settlement class and preliminarily approve the proposed Settlement.

Plaintiffs further request that the Court appoint Interim Co-Lead Class Counsel as Class Counsel

and the named Plaintiffs as Class Representatives. Plaintiffs also seek the Court’s approval of

their proposed class notice program so that the second step, notice to all affected class members,

may be carried out.


849061.5 6

B. THE PROPOSED SETTLEMENT IS WITHIN THE RANGE OF POSSIBLE APPROVAL AND SHOULD BE PRELIMINARILY APPROVED UNDER FED. R. CIV. P. 23(e).

“Federal courts naturally favor the settlement of class action litigation.” Isby v. Bayh, 75

F.3d 1191, 1196 (7th Cir.1996). The first step in approval is for the court to determine whether

the proposed settlement is within the range of possible approval sufficient to justify sending

notice to the class of the proposed settlement and holding a final approval hearing. See In re

AT&T Mobility Wireless Data Servs. Sales Litig., 270 F.R.D. 330, 346 (N.D. Ill. 2010). If so, a

proposed settlement may be finally approved by the Court if it is determined to be lawful, fair,

reasonable and adequate. Isby, 75 F.3d at 1196; E.E.O.C. v. Hiram Walker & Sons, Inc., 768

F.2d 884, 889 (7th Cir. 1985). At the preliminary approval stage, however, “the court’s task is

merely to determine whether the proposed settlement is within the range of possible approval,

not to conduct a full-fledged inquiry into whether the settlement meets Rule 23(e)’s standards.”

Am. Int'l Grp., Inc. v. ACE INA Holdings, Inc., Nos. 07 C 2898, 09 C 2026, 2011 WL 3290302,

*6 (N.D. Ill. July 26, 2011) (quotation omitted); see also In re Bromine Antitrust Litig., 203

F.R.D. 403, 416 (S.D. Ind. 2001).

Five factors aid courts in analyzing preliminary approval:

(1) the strength of plaintiffs' case compared to the terms of the proposed settlement;

(2) the likely complexity, length and expense of continued litigation;

(3) the amount of opposition to settlement among [a]ffected parties;

(4) the opinion of competent counsel; and (5) the stage of the proceedings and the amount of discovery

completed.

AT&T, 270 F.R.D. at 346; Am. Int'l Group, 2011 WL 3290302, at *5; see Isby, 75 F.3d at 1198–

99 (factors to aid court’s analysis).

In evaluating settlements, courts give extra value to an initial “icebreaker” settlement.


849061.5 7

An “ice-breaker” settlement “is the first settlement in the litigation – and should increase the

likelihood of future settlements. An early settlement with one of many defendants can ‘break the

ice’ and bring other defendants to the point of serious negotiations.” In re Linerboard Antitrust

Litig., 292 F. Supp. 2d 631, 643 (E.D. Pa. 2003) (citation omitted); see In re Packaged Ice

Antitrust Litig., No. 08-MD-01952, 2011 WL 717519, at *10 (E.D. Mich. Feb. 22, 2011) (“[a]lso

of significant value is the fact that the Settlement Agreement with Home City can serve as an

‘ice-breaker’ settlement”); In re Corrugated Container Antitrust Litig., MDL 310, 1981 WL

2093, at *19 (S.D. Tex. June 22, 1981) (settlement “was the first one negotiated and, in addition

to the benefits already detailed, broke the ice and brought other defendants to the point of serious

negotiations”). Accordingly, the first settlement in a case with multiple defendants is important.

Early ice-breaker settlements in multi-defendant antitrust cases also add value for the

class by strategically building higher recoveries for later settlements. An earlier opinion

explained, “this strategy was designed to achieve a maximum aggregate recovery for the class

and the fact that the later settlements were at considerably higher rates tends to show that the

strategy was successful.” Corrugated Container, 1981 WL 2093, at *23. That court also noted,

“the coercive impact of such a strategy, combined with the law on joint and several liability … is

increasingly great as one settlement succeeds another.” Id. at *23. A settling defendant’s

cooperation adds recognized value to a settlement. E.g. Packaged Ice, 2011 WL 717519, at *10

(cooperation “has already been beneficial to the Plaintiffs in their continued prosecution of their

claims against the non-settling Defendants”); In re Pressure Sensitive Labelstock Antitrust Litig.,

584 F. Supp. 2d 697, 702 (M.D. Pa. 2008) (“significant cash payout, coupled with Settling

Defendants' extensive proffer of facts and information represents an immediate and valuable

benefit to the Class that will aid in the ongoing litigation against the non-settling Defendants.");


849061.5 8

Linerboard, 292 F. Supp. 2d at 643 (cooperation “a substantial benefit to the classes” strongly

supporting settlement approval).

The factors mentioned in Isby and AT&T support preliminarily approving this Settlement.

First, this settlement provides $10 million for the Settlement Class, a substantial recovery in view

of the challenges of litigating an international price-fixing conspiracy against Settling

Defendants and their affiliates who are essentially located entirely in the former Soviet Union.

This settlement’s cooperation signals to other Defendants they should reconsider their previous

settlement positions. Settling Defendants’ sales to the Class are not removed from the case, thus

the imposition of joint and several liability on co-conspirators under the Sherman Act leaves the

non-settling Defendants liable for three times the damages caused by the entire conspiracy.10

Nothing in this Settlement Agreement alters that liability. This settlement agreement's

cooperation provision strengthens DPPs' case against the remaining Defendants, providing a

substantial benefit that strongly supports approval.

Second, continued litigation with the Settling Defendants and their affiliates “‘would

require the resolution of many difficult and complex issues,’ would ‘entail considerable

additional expense,’ and would ‘likely involve weeks, perhaps months, of trial time.’” Isby, 75

F.3d at 1199 (quoting Taifa v. Bayh, 846 F. Supp. 723, 727 (N.D. Ind. 1994)). Antitrust class

actions are “notoriously complex, protracted, and bitterly fought,” Weseley v. Spear, Leeds &

Kellogg, 711 F. Supp. 713, 719 (E.D.N.Y. 1989), and continuing this litigation against these

Settling Defendants in particular could pose a long and expensive battle for the Settlement Class.

Russia has ignored the Hague Convention for Service Abroad, which would complicate and

10

See Burlington Indus., Inc. v Milliken & Co., 690 F.2d 380, 391 (4th Cir. 1982) (joint and

several liability).


849061.5 9

multiply discovery.11

Moreover, collecting any resulting judgment, including locating and

attaching available assets in Russia and Belarus, likely would pose additional challenges and

delays.

Third, Class Counsel, experienced antitrust class action lawyers, believe this is a strong

initial settlement that provides substantial benefit to the Settlement Class, and recommend its

approval. Simon Decl., ¶14. See Am. Int'l Grp., 2011 WL 3290302, at *8 (court “entitled to rely

heavily on the opinion of competent counsel”). There are no known objections at this time.12

Fourth, the settlement is a result of arms-length negotiations after ongoing litigation,

involving numerous negotiations between Class Counsel and counsel for the Settling Defendants.

Simon Decl., ¶11. These conversations occurred after Class Counsel researched, analyzed, and

evaluated numerous factual and legal issues, conducted contentious pre-trial proceedings with

Defendants, defeated Defendants’ extensive motions to dismiss DPPs’ Complaint, and won a

unanimous en banc appellate decision upholding their Complaint. Id.

This icebreaker settlement provides $10 million to the Settlement Class, plus cooperation

that will strengthen Direct Purchaser Plaintiffs’ case as part of a strategy “designed to achieve a

maximum aggregate recovery for the class.” Corrugated Container, 1981 WL 2093, at *23. It

saves considerable expense, attorney and judicial time, and avoids particular problems of

discovery and collection from Russian Defendants. Experienced Class Counsel recommend the

settlement. Consequently, the proposed settlement is “at least sufficiently fair, reasonable and

11

The fact that Russia ignores the Hague Convention for Service Abroad was briefed

extensively in Plaintiffs’ Motion To Allow Alternative Service on the Russian Defendants (ECF

No. 41), which the Court granted in April 2009 (ECF No. 64).

12 If the Settlement is preliminarily approved, affected class members will receive notice of the

Settlement and will have an opportunity to appear and object, if they choose, prior to final

approval. See Section III E infra.


849061.5 10

adequate to justify notice to those affected and an opportunity to be heard.” In re Baldwin-

United Corp., 105 F.R.D. 475, 482 (S.D.N.Y. 1984).

C. THE COURT SHOULD PRELIMINARILY CERTIFY THE SETTLEMENT CLASS.

A court may certify a class action for settlement purposes. See, e.g., Amchem Prods., Inc.

v. Windsor, 521 U.S. 591, 619–20 (1997). A settlement class must meet the certification

requirements under Rule 23(a) and one or more of the requirements of 23(b). As shown below,

the proposed Settlement Class meets these requirements.

Direct Purchaser Plaintiffs seek certification of the following Settlement Class consisting

of:

All persons and entities who purchased potash in the United States directly from one or more of the Settling Defendants, or their affiliates BPC and IPC, or from Non-Settling Defendants between July 1, 2003 and September 20, 2012. Excluded from the Class are defendants, their parent companies, subsidiaries and affiliates, any co-conspirators, all governmental entities, and any judges or justices assigned to hear any aspect of this action.

Although the proposed Class Period in the Complaint is defined as from July 1, 2003 to the

present (see Complaint ¶32), the proposed Settlement Class definition includes that same period

except that the end date is the effective date of the proposed settlement, i.e., September 20, 2012.

Simon Decl., ¶ 17.

1. The Requirements of Rule 23(a) Are Satisfied.

a. The Class Is So Numerous That Joinder Is Impracticable.

A class must be so numerous as to make joinder of all parties “impracticable.” Fed. R.

Civ. P. 23(a)(1). Joinder is impracticable if it is extremely difficult or inconvenient. See Levitan

v. McCoy, No. 00-C-5096, 2003 WL 1720047, *3 (N.D. Ill. Mar. 31, 2003). Courts consider the

number of class members and “common sense assumptions” to determine whether a proposed

class satisfies the numerosity element. Scholes v. Stone, McGuire & Benjamin, 143 F.R.D. 181,


849061.5 11

184 (N.D. Ill. 1992) (internal quotation omitted) (certifying class between 129 and 300

members); see also Hubler Chevrolet, Inc. v. Gen. Motors Corp., 193 F.R.D. 574, 577 (S.D. Ind.

2000) (“While there is no magic number held to satisfy this requirement, classes of forty or more

members have generally been found to be sufficiently numerous.”). This Settlement Class

includes all entities that purchased potash from any Defendant in the United States during the

class period. While the precise number remains in Defendants’ exclusive possession for now,

Class Counsel reasonably believe that there are thousands of Settlement Class members, and that

they are geographically dispersed across the United States. Simon Decl., ¶17. Since their

numbers and dispersion make joining them all impracticable, the numerosity requirement is

satisfied.

b. vcThere Are Questions of Law and Fact Common to the Class.

Commonality requires a legal or factual question common to the class. Fed. R. Civ. P.

23(a)(2). It does not require all questions of law or fact to be identical “but merely that the class

claims arise out of the same legal or remedial theory.” See Johns v. DeLeonardis, 145 F.R.D.

480, 483 (N.D. Ill. 1992). A “single course of conduct that results in injury to the class as a

whole” usually suffices. Id. Commonality is easily met in antitrust cases, since plaintiffs “‘have

a shared interest in attempting to prove that Defendants engaged in a conspiracy to fix, raise, and

maintain the prices’ of the product.” In re Ready-Mixed Concrete Antitrust Litig., 261 F.R.D.

154, 167 (S.D. Ind. 2009) (quoting In re Foundry Resins Antitrust Litig., 242 F.R.D. 393, 405

(S.D. Ohio 2007)).

DPPs’ core allegations are that Defendants formed and operated an illegal cartel to

restrict supply and raise prices for potash. Settling Defendants deny these allegations and deny

liability generally. Since all of the Direct Purchaser Settlement Class Members’ Sherman Act

claims arise from the same legal theory based on these same allegations, they have “a shared


849061.5 12

interest in attempting to prove” Defendants’ alleged conspiracy to fix prices. In addition, DPPs

and the Settlement Class share other legal and factual questions, including but not limited to:

each Defendant’s role in the cartel;

whether Defendants’ conduct violated Section 1 of the Sherman Act;

whether Defendants’ conduct inflated the price of potash sold in the United States

to supracompetitive levels;

whether Defendants shared non-public information, restricted potash output, or

committed other conduct to further the alleged conspiracy; and,

whether Defendant’s conduct injured DPPs and other Settlement Class members,

and if so, the appropriate class-wide damages.

Consequently, the Settlement Class satisfies Rule 23(a)(2)’s commonality requirement.

c. Plaintiffs' Claims Are Typical of the Claims of the Class.

Claims of the class representatives must be typical of all class members’ claims. Fed. R.

Civ. P. 23(a)(3). Typicality does not require the claims of class members and representatives to

be identical, only substantially similar. Ruiz v. Stewart Assoc., Inc., 171 F.R.D. 238, 242 (N.D.

Ill. 1997). A “plaintiff’s claim is typical if it arises from the same event or practice or course of

conduct that gives rise to the claims of other class members and his or her claims are based on

the same legal theory.” Keele v. Wexler, 149 F.3d 589, 595 (7th Cir. 1998) (quoting De La

Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983)).

“Typicality in the antitrust context will be established by plaintiffs and all class members

alleging the same antitrust violations by the defendant.” Ready-Mixed Concrete, 261 F.R.D. at

168 (quoting Estate of Garrison v. Warner Brothers, No. CV95-8328, 1996 WL 407849, at *2


849061.5 13

(C.D. Cal. June 25, 1996)); In re Mercedes-Benz Antitrust Litig., 213 F.R.D. 180, 185 (D.N.J.

2003) (typicality found where all harmed by illegal price-fixing conspiracy).

DPPs here allege and must prove the same Sherman Act violations that absent Settlement

Class members would have to prove: the existence, operation, and effects of the conspiracy to

restrict output and fix, raise and maintain prices. DPPs assert the same legal claims on behalf of

themselves and the proposed class; namely, that they purchased potash directly at

supracompetitive prices as a result of the antitrust conspiracy between Defendants. Defendants'

alleged price-fixing scheme is the basis for the claims of every named Plaintiff and class

members who purchased potash directly from Defendants during the class period. Because the

named Plaintiffs’ claims arise out of the same alleged anticompetitive conduct, are based on the

same alleged theories, and will require the same kinds of evidence to prove those theories, Rule

23(a)(3)’s typicality requirement is satisfied.

d. Plaintiffs Will Fairly and Adequately Represent the Interests of the Class.

Representative parties must “fairly and adequately protect the interests of the class.” Fed.

R. Civ. P. 23(a)(4). Adequacy requires that class representatives retain adequate counsel and

have no conflicting interests with other class members. Ready-Mixed Concrete, 261 F.R.D. at

168; In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 291 (2d Cir. 1992) (to same

effect); Eggleston v. Chicago Journeymen Plumbers' Local Union No. 130, 657 F.2d 890, 896

(7th Cir. 1981) (“competent and experienced counsel able to conduct the litigation”); cf. Fed. R.

Civ. P. 23(g)(1)(A) (counsel appointment requirements). Some cases also inquire whether the

named plaintiff has a sufficient interest in the case “to ensure vigorous advocacy.” Wahl v.

Midland Credit Management, Inc., 243 F.R.D. 291, 298 (N.D. Ill. 2007) (quoting Sebo v.

Rubenstein, 188 F.R.D. 310, 316 (N.D. Ill. 1999)). When class representatives and members


849061.5 14

seek the common goal of the largest possible recovery for the class, their interests do not

conflict. In re Corrugated Container Antitrust Litig., 643 F.2d 195, 208 (5th Cir. 1981); see

Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 453 (S.D.N.Y. 2004) (“There is no

conflict between the class representatives and the other class members. All share the common

goal of maximizing recovery.”).

The Settlement Class members’ interests are well protected by the named Plaintiffs and

Class Counsel are not aware of any interests that they have that are antagonistic to the interests

of the class. Simon Decl., ¶8. Settlement Class members share an aligned, overriding interest in

obtaining the largest possible dollar recovery from this case. The named Plaintiffs purchased

potash from one or more Defendant(s), and have an interest in pursuing these claims. Id. Class

Counsel are qualified, experienced, and thoroughly familiar with antitrust class action litigation.

See Minute Order, February 24, 2009 (ECF No. 34) (appointing Class Counsel); Motion Of All

Direct Purchaser Plaintiffs To Appoint Interim Co-Lead And Liaison Class Counsel (Feb. 9,

2009) (ECF No. 7). See also Simon Decl. ¶15. Class Counsel have successfully prosecuted

many antitrust actions, developed this case, have invested substantially in it, diligently pursued it

through appellate proceedings, and will continue to litigate the case vigorously. Id. Accordingly,

Rule 23(a)(4)’s requirements are satisfied.

2. The Proposed Settlement Class Satisfies Rule 23(b)(3).

In addition to the requirements of Rule 23(a), Plaintiffs here must show that (1)

“questions of law and fact common to the members of the class predominate over any questions

affecting only individual members[;]” and (2) that “a class action is superior to the other

available methods for the fair and efficient adjudication of the controversy.” Wahl, 243 F.R.D. at

299 (quoting Fed. R. Civ. P. 23(b) (3)). Both are true here.


849061.5 15

a. Common Questions of Law and Fact Predominate Over Individual Questions.

Common questions predominate when generalized evidence “proves or disproves an

element in the case on a simultaneous, class-wide basis, since such proof obviates the need to

examine each class member’s individualized position.” Foundry Resins, 242 F.R.D. at 408.

Predominance is shown when a business practice harms class members in a consistent way, aside

from individual questions. See Wahl, 243 F.R.D. at 299 (form letters supported predominance).

Antitrust claims naturally satisfy predominance. See Amchem Prods., 521 U.S. at 625

(“Predominance is a test readily met in certain cases alleging consumer or securities fraud or

violations of the antitrust laws.”). “As a general rule in price-fixing cases . . . courts have

consistently found that common issues regarding the existence and scope of the conspiracy

predominate over questions affecting only individual members.” Foundry Resin at 408; see In re

Carbon Black Antitrust Litig., No. CIV.A.03-10191-DPW, MDL No. 1543, 2005 WL 102966,

*15 (D. Mass. Jan. 18, 2005) (“the common question of the existence of a horizontal price-fixing

conspiracy has almost invariably been found to satisfy Rule 23(b)(3)”); Hughes v. Baird &

Warner, Inc., No. 76 C 3929, 1980 WL 1894, at *3 (N.D. Ill. Aug. 20, 1980) (“Clearly, the

existence of a conspiracy is the common issue in this case. That issue predominates over issues

affecting only individual sellers.”).

The existence, operation, and effects of this conspiracy to restrict output and fix, raise

and maintain prices are central issues in this case that call for proof common to DPPs and all

Settlement Class members. Furthermore, DPPs contend that the structural characteristics of the

potash industry facilitated the conspiracy itself and resulted in changes in potash pricing having a

common impact on all class members. These issues will be proven with evidence common to all


849061.5 16

class members. See Foundry Resin, 242 F.R.D. at 410. Therefore, this case satisfies the

predominance requirement.

b. A Class is Superior To Any Other Method of Adjudicating This Case.

Rule 23(b)(3) requires a “predominance” class action to be superior to other methods of

handling the case. Courts recognize that in antitrust cases, class actions regularly are less

complicated, time-consuming, and expensive than individual trials. Carbon Black, 2005 WL

102966, at *22 (“Antitrust class actions are expensive endeavors and joining forces with other

similarly situated plaintiffs is often the only way to effectuate a case.”). Further, the class action

approach saves judicial resources. Bromine, 203 F.R.D. at 416.

This case meets Rule 23(b)(3)’s superiority requirement. Here, a Settlement Class

member’s individual interest in prosecuting a separate claim is far outweighed by the efficiency

of the class mechanism. Thousands of entities purchased potash during the class period; thus,

settling these claims in the context of a class action conserves judicial and private resources and

hastens Settlement Class recovery. Numerous individual plaintiffs would encounter various

problems with discovery of and collection of any judgment in Russia from these Settling

Defendants. DPPs see no management difficulties in this settlement. Cf. Amchem, 521 U.S. at

620 (for settlement-class certification, court need not review trial management “for the proposal

is that there be no trial.”). The proposed Settlement Class is substantially superior to other

available methods for fair and efficient adjudication of the controversy with these Settling

Defendants.

D. INTERIM CO-LEAD CLASS COUNSEL SHOULD BE APPOINTED AS SETTLEMENT CLASS COUNSEL.

"An order certifying a class action . . . must also appoint class counsel under Rule 23(g)."

Fed. R. Civ. P. 23(c)(1)(B). In appointing class counsel, courts must consider the following


849061.5 17

factors: (i) the work counsel has done in identifying or investigating potential claims in the

action; (ii) counsel's experience in handling class actions, other complex litigation, and the types

of claims asserted in the action, (iii) counsel's knowledge of the applicable law; and (iv) the

resources that counsel will commit to representing the class. Fed. R. Civ. P. 23(g)(1)(A).

The work done by Interim Co-Lead Counsel since their appointment provides a

substantial basis for the Court to find that they are well qualified to serve as class counsel.

Simon Decl., ¶¶3-7. Accordingly, Interim Co-Lead Counsel should be appointed as class

counsel for purposes of the settlement.

E. PLAINTIFFS’ PROPOSED CLASS NOTICE PROGRAM MEETS THE REQUIREMENTS OF RULE 23(e).

Rule 23(e)(1) states that "[t]he court must direct notice in a reasonable manner to all class

members who would be bound by a proposed settlement, voluntary dismissal or compromise."

Notice of a proposed settlement must inform class members of the following: (1) the nature of

the pending litigation; (2) the general terms of the proposed settlement; (3) that complete

information is available from court files; and (4) that any class member may appear and be heard

at the fairness hearing. See Newberg § 8.32; Packaged Ice, 2011 WL 717519, at *5 (quoting

Newberg passage); see also City of Greenville v. Syngenta Crop Prot., No. 3:10-cv-188, 2012

WL 1948153, at *4 (S.D. Ill. May 30, 2012) (stating Rule 23(e) notice contents “sufficient” with

above elements) (quoting AT&T, 270 F.R.D. at 351). For a Rule 23 (b)(3) predominance class,

the notice must also state that class members have an opportunity to opt out, that the judgment

will bind all class members who do not opt out, and that any member who does not opt out may

appear through counsel. Fed. R. Civ. P. 23(c)(2)(B). The form of notice is "adequate if it may

be understood by the average class member." Newberg § 11.53.


849061.5 18

Notice to class members must be "the best notice practicable under the circumstances,

including individual notice to all members who can be identified through reasonable effort."

Amchem Prods., 521 U.S. at 617 (quoting Fed. R. Civ. P. 23(c)(2)); City of Greenville, 2012 WL

1948153 at *4 (same). Notice should be mailed to members who can be identified through

reasonable effort, and other members should be notified by publication. City of Greenville,

2012 WL 1948153 at *4; see Stoller v. Baldwin-United Corp., 650 F. Supp. 341, 343–44 (S.D.

Ohio 1986) (approving combination of mailing and publication).

Plaintiffs’ proposed notice plan in this case includes: (1) direct notice given by mail or

email to each class member who can be identified by reasonable effort; (2) a summary notice

published in three trade journals (Ag Ads,13

Ag Professional, and Crop Life); and (3) the posting

of both forms of notice on a public website.

Plaintiffs have retained KCC, an experienced national class action notice provider and

class administrator, to assist with class notice for this settlement.14

Declaration of Patrick M.

Passarella, filed herewith, ¶3. KCC has experience with administering over 1,500 settlements.

Its services include settlement funds escrow and reporting, class member data management, legal

notification, call center support, and claims administration. KCC will send a notice packet to

reasonably ascertainable class members through First Class U.S. mail. Id., ¶5–6. KCC will

check the names and addresses against the USPS Change of Address database, certify them

through a coding accuracy system, and use a delivery point validation system, and follow up on

13

Ag Ads is a tabloid size publication that targets fertilizer companies, grain elevators, feed

mills, the poultry industry, commercial agricultural contracting, manufacturing and supply

companies. Ag Professional is a standard size publication that targets retailers and distributors of

crop inputs (fertilizer, seed, chemicals, etc.), crop consultants and professional farm managers.

Crop Life is a standard size publication that targets agricultural dealers and distributors,

including retailers, dealers and distributors of crop inputs, and fertilizer producers.

14 See http://www.kccllc.com.


http://www.kccllc.com/

849061.5 19

returned notices. KCC will also place quarter or half-page advertisements of the published

notice in the three industry trade journals. KCC will also post an informational website with a

memorable domain name, providing additional information and documents, and a toll-free

number for frequently asked questions and requests for mailing of further information.

The content of the proposed Class Notice, which consists of a summary notice and a long

form notice, fully complies with due process and Rule 23. (The proposed summary and long

form notices are attached to the Simon Declaration as Exhibit A and Exhibit B.) It defines the

class, describes the nature of the action, defines the class claims, and explains the procedure for

making comments and objections. The Class Notice describes the terms of the Settlement with

the Settling Defendants, and informs the Settlement Class Members that there is no plan of

distribution at this time. The Class Notice provides the date, time and place of the final approval

hearing, and informs class members that they may enter an appearance through counsel. The

Class Notice also informs Settlement Class Members how to exercise their rights to participate

in, opt out of, or object to the proposed settlement, how to make informed decisions regarding

the proposed Settlement, and tells them that if they do not opt out, the judgment will be binding

upon them. It further informs them about the motion of Class Counsel for reimbursement of

costs to be heard at the same time as the hearing on final approval of the proposed settlement.

“Accordingly, the Notice goes far above and beyond the requirements imposed by Fed. R. Civ.

P. 23(c)(2) and 23(e) and constitutes the best notice practicable under the circumstances of this

lawsuit.” City of Greenville, 2012 WL 1948153, at *4 (quotation omitted).

F. THE COURT SHOULD SCHEDULE A FINAL APPROVAL HEARING.

The last step in the settlement approval process is the final approval hearing, at which the

Court may hear all evidence necessary to evaluate the proposed settlement. At that hearing,


849061.5 20

proponents of the settlement may explain and describe its terms and conditions and offer

argument in support of the settlement approval and members of the settlement class, or their

counsel, may be heard in support of or in opposition to the settlement. Plaintiffs propose the

following schedule of events necessary for a hearing on final approval of the settlement.

DATE EVENT 1. Within 30 days after

Preliminary Approval is granted

Mailing and publication of Class Notice15

2. Within 35 days after Preliminary Approval is granted

Class Counsel will file their motion for Reimbursement of Expenses

3. 60 days after the mailing of Notice

4. 10 days after last day to opt out

Last day for Settlement Class Members to opt out of the settlement and any class member to file objections to the settlement Class Counsel shall file with the Court a list of all persons and entities who have timely requested exclusion from the Settlement Class.

5. 14 days before Fairness Hearing

Class Counsel shall file motion for final approval of settlement and all supporting papers, and Class Counsel and Settling Defendants may respond to any objections to the proposed settlement

6. 14 days before Fairness Hearing

Last day for Settling Defendants to withdraw from the Settlement and terminate the Settlement Agreement

7. No sooner than 45 days after the deadline to opt out

Final Settlement Fairness Hearing

15

Counsel for Plaintiffs requested that the Non-Settling Defendants produce a list of their customers' contact information during the class period to facilitate notice to the Class Members consistent with the requirements of Rule 23(e)(1). To date, the Agrium and Mosaic Defendants have agreed to do so. The PCS Defendants have agreed to produce the requested information only if the Court grants this motion. Simon Decl., ¶18. Depending on the timing of the production of contact information from the Non-Settling Defendants, the proposed schedule for notice to Class Members, and all other dates that follow, may need to be adjusted to allow for the receipt and analysis of the subject contact information. Counsel for DPPs will apprise the Court regarding the status of this information as necessary.


849061.5 21

IV. CONCLUSION

WHEREFORE, for the above stated reasons, DPPs respectfully request that the Court (1)

grant preliminary approval of the class settlement with Defendants JSC Uralkali and JSC

Silvinit; (2) certify the proposed settlement class; (3) appoint Interim Co-Lead Class Counsel as

Class Counsel; (4) appoint the named Plaintiffs as Class Representatives; (5) direct the

distribution of notice of the settlement to the Settlement Class to provide Class Members with

the opportunity to opt out and to object to the settlement; and (6) schedule the final settlement

approval process.

Dated: November 26, 2012 Respectfully submitted,

LOCKRIDGE GRINDAL NAUEN P.L.L.P.

s/W. Joseph Bruckner W. Joseph Bruckner Heidi M. Silton Craig S. Davis 100 Washington Avenue South Suite 2200 Minneapolis, MN 55401 Tel: (612) 339-6900 Fax: (612) 339-0981 Email: [email protected] [email protected] [email protected] Bruce L. Simon Jonathan M. Watkins Robert G. Retana PEARSON, SIMON, WARSHAW & PENNY, LLP 44 Montgomery Street, Suite 2450 San Francisco, CA 94104 Tel: (415) 433-9000 Fax: (415) 433-9008 Email: [email protected] [email protected]

[email protected]


mailto:[email protected]





849061.5 22

Direct Purchaser Plaintiffs' Interim Lead Counsel

Steven A. Hart SEGAL McCAMBRIDGE SINGER & MAHONEY, LTD 233 South Wacker Drive Sears Tower-Suite 5500 Chicago, IL 60606 Tel: (312) 645-7800 Fax: (312) 645-7711 Email: [email protected]

Direct Purchaser Plaintiffs' Interim Liaison Counsel



23

CERTIFICATE OF SERVICE I, Steven A. Hart, state that I have served a copy of this pleading upon all counsel of record via the United States Court for the Northern District of Illinois’s ECF Document Filing System on November 26, 2012. By: s/ Steven A. Hart x] As provided by law pursuant to Rule 5(b) of Fed. Rules of Civil

Procedure, I certify that the statements set forth herein are true and correct.


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