CHEMICAL & ENGINEERING

NEWS M A Y 1 1 , 1 9 6 4

Trustbusters Shift to Phosphate Fertilizers Indictment alleging price fixing in fertilizer follows urethane foam suits

Antitrust attention last week had shifted from urethane foams to fertiliz­ers, following indictment of five phos­phate fertilizer companies by a federal grand jury in Los Angeles. The grand jury indicted the five firms for con­spiring to eliminate price competition in the sale of diy phosphatic fertilizers in the 11 western states.

The indictment is the third attack on chemical and related industries by the Department of Justice in recent weeks. In mid-April, the Justice De­partment filed a civil complaint de­signed to make Monsanto and Farben-fabriken Bayer divest themselves of Mobay Chemical (C&EN, April 20,

page 23) . It filed another complaint to block Allied Chemical's bid to acquire General Foam Corp. (C&EN, April 20, page 19).

Unlike these civil actions, the Los Angeles indictment charges criminal offenses under Section 1 of the Sher­man Act. The bill names five com­panies as defendants: J. R. Simplot Co., Boise, Idaho; Cominco Products, Inc., Spokane, Wash.; Balfour-Guthrie & Co., Ltd., and California Chemical Co., both in San Francisco; and West­ern Phosphates, Inc., Salt Lake City, Utah. Named as co-conspirators, but not indicted, are Anaconda Co., New York City, and Northwest Nitro Chem-

Dismissal Refused in Trade Secrets Case Titanium dioxide battle may go to trial

Chancellor Collins J. Seitz last week denied a motion for summary judg­ment in Du Pont's suit to prevent Dr. Donald E. Hirsch from revealing to American Potash any trade secrets in­volved in Du Pont's chloride process for making titanium dioxide. In chancery court in Wilmington, Del., Chancellor Seitz ruled, in effect, that the case could not be dismissed for lack of legal merit. American Potash had asked for a summary judgment to that effect. Lawyers on both sides expect that the next step will be trial. It is not likely to begin before fall.

Chemical engineer Hirsch worked for Du Pont from 1950 until Novem­ber 1962, when he resigned to join American Potash. During six of his 12 years with Du Pont, Dr. Hirsch was assigned to work on the chloride process. At American Potash, he was

to have become manager of plant tech­nical services at a titanium dioxide plant to be built.

Within a few days after Dr. Hirsch resigned, the Wilmington court, at Du Pont's request, ordered Dr. Hirsch not to reveal to American Potash any confidential information on the Du Pont process (C&EN, Dec. 17, 1962, page 24) . The order also restrains American Potash from seeking or ac­cepting such information. Also, Dr. Hirsch was ordered not to do any work for American Potash in connec­tion with a chloride process. The or­der remains in effect.

In his ruling last week, Chancellor Seitz stated: "Among the substantial and conflicting policies at play in this situation are the protection of employ­ers' rights in their trade secrets on the one hand, versus the right of the indi­vidual to exploit his talents, use mat­ters of general knowledge, and pursue his calling without undue hindrance from a prior employer on the other. . . . What accommodation, if any, is to be made must await the decision after trial."

ical Sales, Ltd., Alberta, Can. No in­dividuals were named.

The indictment charges the five companies, the co-conspirators, and others "to the grand jurors unknown'* with agreeing, conspiring, and taking concerted action to eliminate price competition in dry phosphatic fertiliz­ers in the 11 western states from "at least" 1957 through "at least" 1961.

The indictment specifies five points on which the companies allegedly agreed. These are:

• To allow a distributor discount only to purchasers meeting certain minimum qualifications.

• To establish and maintain a uni­form differential between the prices of bagged and bulk materials.

• To discontinue trucking allow­ances to purchasers who provide their own transportation from plants.

• To apply uniform credit terms.

The indictment charges also that amounts and periods of seasonal dis­counts were agreed upon from time to time.

These agreements have restricted price competition among the defend­ants, says the indictment. Thus, fann­ers, growers, and others allegedly have bought the products on terms and conditions restricted by agree­ments among the defendants.

None of the companies would com­ment on the matter early last week. Stauffer Chemical, parent of Western Phosphates, issued a statement point­ing out that it had just last month pur­chased an outstanding 50% interest in Western Phosphates to become sole owner (C&EN, May 4, page 29). Before then, the statement says, "Western Phosphates . . . was an inde­pendent company in which Stauffer Chemical owned a 50% equity."

Two of the companies, J. R. Simplot Co. and Western Phosphates, are basic producers of phosphate fertilizers or ingredients. Both produce phos­phates from mining operations, Sim­plot in Idaho and Western Phosphates in Utah. Cominco Products is a

M A Y 11, 1964 C & E N 23