Thursday, October 02, 2008
Price Fixing Claims Against Aspartame Makers Barred as Untimely
This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.
Claims on behalf of a putative class of purchasers of the artificial sweetener Aspartame—alleging that producers had engaged in a worldwide, horizontal price fixing and market allocation conspiracy—were barred by the Sherman Act's four-year statute of limitations, the federal district court in Philadelphia has ruled.
Complaints were filed in 2006 on behalf of a class of all persons and entities that had purchased Aspartame since 1992. However, the named plaintiffs had not made any purchases of Aspartame from any of the defendants after 1999. Thus, a motion for summary judgment in favor of the producers was granted.
Tolling of Statutory Period
The purchasers were not entitled to sufficient tolling of the accrual of their cause of action, pursuant to the doctrine of fraudulent concealment, which would have brought their claims within the limitations period, the court held.
Although their last purchases of the sweetener occurred well more than four years before they filed suit and they should have been aware of the facts supporting their claims, they took no steps to investigate their potential claims during the limitations period, the court noted. Thus, the purchasers failed to exercise due diligence.
Failure to Investigate Claims
While the record contained no red flag that provided them with unequivocal proof of the existence of their claims, it did contain numerous warnings that collectively revealed significant barriers to entry and lack of competition in the market for the sweetener—including (1) prices in 1994 and 1995 that were described by one plaintiff as “out of sight,” (2) complaints related to the sale and marketing of Aspartame abroad in 1993, and (3) a Harvard Business School study of those complaints that was released in 1993 and again in revised form in 1995 and 2000.
In light of these warnings, the court said, it was unreasonable for the purchasers to have taken no steps or actions to investigate their claims. The purchasers likewise failed to establish that they could not have discovered the alleged antitrust violations through the exercise of reasonable diligence, the court concluded.
The decision is In re Aspartame Antitrust Litigation, 2008-2 Trade Cases ¶76,311.