FILED UNDER SEAL CIVIL ACTION NO. 05-CV-666

MDL NO. 1682

THIS DOCUMENT CONTAINS CONFIDENTIAL AND HIGHLY CONFIDENTIAL INFORMATION SUBJECT TO THE STIPULATED PROTECTIVE ORDER

APPROVED BY THE COURT BY ORDER DATED NOVEMBER 8, 2005

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

IN RE: HYDROGEN PEROXIDE ANTITRUST LITIGATION

CIVIL ACTION NO. 05-CV-666 MDL No.: 1682

THIS DOCUMENT RELATES TO: DIRECT PURCHASER ACTION

MEMORANDUM IN SUPPORT OF DIRECT PURCHASER PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS TO PRODUCE ALL DOCUMENTS PROVIDED TO THE EUROPEAN COMMISSION IN CONNECTION WITH ITS HYDROGEN PEROXIDE PRICE-FIXING INVESTIGATION AND FOR LIMITED MODIFICATION OF THE

COURT’S ORDER DATED OCTOBER 24, 2005

The Direct Purchaser Plaintiffs (“plaintiffs”), by the undersigned Interim Co-Lead

Counsel, submit this memorandum of law in support of their motion to compel defendants to

produce (a) copies of all pre-existing business documents that defendants previously furnished to

the European Commission (“E.C.”) in connection with the E.C.’s investigation ("E.C.

investigation") and adjudication1 of price-fixing in the market for hydrogen peroxide; and (b) all

1 After trial, the E.C.’s antitrust enforcement authority found that several defendants in this action (Arkema S.A.; Solvay, S.A.; Degussa A.G.; Akzo Nobel Chemicals International, Inc.; Kemira Oyj; FMC and FMC's European affiliate, FMC Foret) unlawfully fixed and monitored target prices of hydrogen peroxide and its downstream products, sodium perborate and sodium percarbonate (collectively, “hydrogen peroxide”) and agreed upon "a model for sharing out among producers." See Plaintiffs’ Class Cert. Brief, Ex. 6. On May 3, 2006, the EU announced that it had fined seven companies, including the aforementioned defendants, €388.128 million for their unlawful manipulation of the market for hydrogren peroxide. See id. The fines imposed

copies of defendants’ pre-existing business documents that were seized by the E.C. in connection

with the E.C. investigation.2

If the Court concludes that the relief requested by plaintiffs is outside the literal scope of

the Court’s Order of October 24, 2005, approving the parties’ Stipulation Re: Plaintiffs’ First

Request for Production of Documents Directed to All Defendants (“October 24 Order”)(see

Exhibit B), plaintiffs respectfully submit that good cause exists for a limited modification of the

October 24 Order to permit production of the additional documents that are the subject of this

motion.

I. BACKGROUND

The legal and factual foundation of this action have been set forth in detail before this

Court, both in the context of defendants' motion to dismiss plaintiffs' Consolidated Amended

Class Action Complaint, In re Hydrogen Peroxide Antitrust Litig., 401 F. Supp. 2d 451 (E.D.Pa.

2005) (Dalzell, J.), and in the Direct Purchaser Plaintiffs’ Memorandum in Support of their

Motion for Class Certification (“Class Cert. Brief”), which plaintiffs filed on June 16, 2006.

upon Arkema and Solvay were increased by 50 percent because they were “repeat cartel offenders” -- recidivists that were undeterred from engaging in what Competition Commissioner Neelie Kroes termed “unacceptable corporate behaviour that deprive[d] customers of the benefits of the Single Market.” Id. The E.C.’s formal Opinion will not be publicly available until E.C. antitrust regulators and the defendant companies “establis[h] a version of the decision that does not contain any business secrets or other confidential information….” Id. 2 See Direct Purchaser Plaintiffs’ Request for Product of Documents Directed to All Defendants, dated May 9, 2006 (“Document Requests”), attached hereto as Exhibit A, Document Requests No. 4 and 6. Document Request No. 1 also requested production of “[a] complete, unredacted copy of the 2006 written adjudication by the AS-DG Competition of the European Commission . . . concerning the E.C.’s investigation of price-fixing and other collusive conduct in the hydrogen peroxide and perborate industries . . . .” To avoid or narrow this discovery dispute, plaintiffs agreed to limit their Document Requests and seek, at this time, only pre-existing business documents provided by defendants to the E.C. See Exhibit C. Defendants rejected this proposed compromise. See Exhibit D. Because the remaining documents sought by the Document Requests (particularly the currently unpublished E.C. decision) are highly relevant, plaintiffs may later be required to move to compel the production of the remaining documents after the Court’s adjudication of class certification issues, unless defendants reconsider their refusal to provide them.

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The parties have worked cooperatively and in good faith to address and resolve most of

the discovery issues that have arisen, and they will continue to do so as this litigation proceeds.

This motion to compel relates to one discrete -- but significant -- disagreement over whether

defendants should produce copies of pre-existing documents previously furnished to or seized by

the E.C. in connection with the E.C.’s investigation.

II. DEFENDANTS ARE OBLIGATED TO PRODUCE THE REQUESTED DOCUMENTS

Defendants formed and created a global cartel to control the pricing of hydrogen peroxide

both in the United States and Europe. The cartel in both locations involved the same companies,

many of the same executives, the same mechanisms and meetings, and the same objectives. In

large part, the cartel in both locations overlapped as to the time of its duration. Under such

circumstances, it cannot be seriously argued that collusive conduct in Europe by the same

parties, on the same products and during much of the same period is not relevant to the claims in

this matter. Therefore, defendants are obligated to produce the requested documents. See In re

Automotive Refinishing Paint Antitrust Litigation., 2004 U.S. Dist. LEXIS 29160 at *14-17

(E.D. Pa. Oct. 29, 2004). Moreover, the [REDACTE Defendants are statutorily required to

produce such documents under the Antitrust Criminal Penalty Enhancement and Reform Act of

2004 (the “Act”), Pub.L. 107-273.

A. The [REDACT Defendants Have a Statutory Duty to Produce All Potentially Relevant Documents

The [REDACTE defendants are participants in the corporate leniency programs of both

the United States Department of Justice (“DOJ”) and the E.C. As a condition for leniency from

governmental prosecution in both Europe and the United States, the dddddd?? defendants, inter

alia, must make a complete confession of their complicity in the price-fixing conspiracy and

provide evidence of the participation of other conspirators. See Class Cert. Br., Ex. 5.

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Under Section 213(b) of the Act, in exchange for the leniency they seek, the [REDACTE

defendants are also required to provide full and unconditional cooperation to civil plaintiffs,

including production of “all potentially relevant” documents in their possession and control.

Both the Act and its legislative history indicate that Congress anticipated that amnesty

defendants will provide private plaintiffs with cooperation that extends well beyond that required

by previous rules. Michael Hausfeld & Megan Jones, The Antitrust Criminal Penalty

Enhancement and Reform Act Has Changed the Landscape in Civil Enforcement of Anti-Cartel

Activity, Presented to the American Bar Association, 54th Antitrust Law Spring Meeting (March

29-31, 2006), a copy of which is attached here as Exhibit E.

The Act requires an amnesty defendant to provide a “full account” of all facts

“potentially relevant” to a related civil action. See § 213(b)(2). This indicates a discovery

requirement broader both in scope and in reach than that envisioned by the liberal discovery

provisions of the Federal Rules of Civil Procedure, which requires production of “relevant”

documents. See Fed. R. Civ. P. 26. The House Report states that the Act’s “use of the term

‘potentially relevant’ is intended to preclude a parsimonious view of the facts or documents to

which a claimant is entitled. Documents or other items in the applicant's possession, custody, or

control must be produced even if they are otherwise arguably located outside the jurisdiction of

the U.S. courts.” See Cong. Rec., June 2, 2004, at H3658 (Statement of Rep. Sensenbrenner)

(emphasis added) (attached as Exhibit F hereto). Thus, under the Act, the [REDACTE

defendants are obligated to produce European documents relating to the same conspiracy, the

same product and the same objective as is the subject of this antitrust litigation in the United

States. The documents requested by plaintiffs qualify as such. In declining to fulfill their

discovery obligations to plaintiffs under the Act, the [REDACTE defendants have not provided

the unconditional cooperation required by law.

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B. Other Defendants Pleaded Guilty to a Hydrogen Peroxide Conspiracy That Operated in the United States and Abroad

On March 14, 2006, two other defendants, Solvay S.A. and Akzo Nobel Chemicals

International, B.V. - - the foreign-based parent corporations of global chemical manufacturing

enterprises operating in the United States - - were charged criminally with, and pleaded guilty to,

fixing prices of hydrogen peroxide, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.

See Class Cert. Br., Ex. 1 and 2.3 In its respective plea agreement, each defendant specifically

agreed that:

During the relevant period, the defendant, through certain executives and employees, participated in a conspiracy among major hydrogen peroxide producers, the primary purpose of which was to suppress and eliminate competition by fixing the price of hydrogen peroxide sold in the United States and elsewhere. In furtherance of the conspiracy, the defendant, through certain executives and employees, engaged in discussions with representatives of other major hydrogen peroxide producers. During these discussions, agreements were reached to fix the price of hydrogen peroxide to be sold in the United States and elsewhere.

See Class Cert. Br., Ex. 3, 4 (emphasis added). The plea agreements recite that “[t]he business

activities of the defendant and its co-conspirators in connection with the production and sale of

hydrogen peroxide affected by this conspiracy were within the flow of interstate and foreign

commerce.” Id. at ¶ 4(c)(emphasis added). The Akzo and Solvay plea agreements also suggest

that their executives, at least some of which had concurrent responsibility for U.S. and European

operations, are implicated in the conspiracy. See Solvay Plea Agreement, ¶ 14(b)(Class Cert.

Br., Ex. 3); Akzo Plea Agreement, ¶ 13(a)(Class Cert. Br., Ex. 4).4

3 Defendants' guilty pleas establish plaintiffs' prima facie case against them. See 15 U.S.C. §16(a). 4 Under the Solvay plea agreement, three officials employed by Solvay, S.A. or its affiliates remain subject to prosecution: Gareth L. Hall, Robert N. Monsen, and Jean-Marie Demoulin. See Solvay Plea Agreement, ¶ 14(b)(Class Cert. Br., Ex. 3). Under the Akzo plea

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In addition, Akzo and Solvay5 were among those adjudicated by the E.C. antitrust

regulators to have engaged in price-fixing and other anticompetitive activity with respect to

hydrogen peroxide during a period of time that overlaps, in part, with the scope of the Akzo and

Solvay plea agreements in the United States. Thus, Solvay and Akzo cannot now attempt to

shield from production documents produced to or seized by European competition authorities on

the ground of non-relevance. The facts of this case show that there is a highly commingled level

of unlawful activity between cartel activities in Europe and the United States. Defendants should

therefore be required to produce the documents requested by plaintiffs.

C. Evidence of Global Cooperation Among Defendants

in Foreign Price-Fixing is Relevant to Plaintiffs’ U.S. Allegations

Evidence from defendants’ internal documents demonstrates that there was substantial

overlap in defendants’ sales, pricing and marketing activities relating to hydrogen peroxide in

Europe and the United States. See, e.g., DEG FCIV 03450-03456, Draft Minutes of Degussa

“Bleaching Chemicals Global Marketing Meeting,” held in Hasbrouck Heights, New Jersey, on

September 14-15, 1998, attached hereto as Exhibit G. Under circumstances in which defendants

engaged in a global price-fixing conspiracy, there is no legitimate claim that documents

defendants provided to the E.C. are irrelevant.

In an analogous setting, the Court reached the same conclusion:

Evidence of cooperation between Defendants in foreign price-fixing, through a trade association or otherwise, would certainly be relevant to establish the existence of an illegal combination or conspiracy in

agreement, two officials employed by Akzo Nobel Chemicals International, B.V. or its affiliates remain subject to prosecution: Dag Stromqvist, a former member of the Netherlands-based company's Board of Management, and Borje Andersson. See Akzo Plea Agreement, ¶ 13(b)(Class Cert. Br., Ex. 4). 5 Solvay received an enhanced fine because it was a “repeat cartel offender.” See supra at 1, n.1.

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restraint of trade, which is a required element of a §1 Sherman Act claim. . . . Evidence of foreign price-fixing among Defendants would also be material to prove that they had the opportunity and ability to engage in domestic price fixing. . . . [E]vidence of foreign price-fixing activities is relevant in determining the nature and scope of an alleged international conspiracy. As the Supreme Court has noted, '[t]he character and effect of a conspiracy are not to be judged by dismembering it and viewing its separate parts, but only by looking at it as a whole.'

In re Automotive Refinishing Paint Antitrust Litig., 2004 U.S.Dist. LEXIS 29160 at *14-17 (E.D.

Pa. Oct. 29, 2004), quoting Cont'l Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699

(1962). See also In re Plastic Additives Antitrust Litig., 2004 WL 2743591 at *14 (E.D. Pa. Nov.

29, 2004); In re Vitamins Antitrust Litig, 2001 WL 1049433 at *11, 13 (D.D.C. June 20, 2001);

In re Uranium Antitrust Litig., 480 F. Supp. 1138, 1154-56 (N.D. Ill. 1979); Cf. United States v.

Microsoft Corp., 1995 WL 505998, at *6 (D.D.C. Aug. 21, 1995); SmithKline Beecham Corp. v.

Apotex Corp., 2006 WL 279073 at *3 (E.D. Pa. Jan. 31, 2006) ("[t]he fact that the United States

is the relevant market in [a] case does not necessarily limit discovery to the United States").

Contemporaneous collusion among defendants, in other areas and markets, with respect

to hydrogen peroxide and otherwise, is relevant, probative and admissible to create an inference

of conspiracy in this litigation, and it "may reasonably be inferred to demonstrate an industry

inundated with collusion." Fears v. Wilhelmina Model Agency, Inc., 2004 WL 594396 at *13

(S.D.N.Y. Mar. 23, 2004).6

6 See generally United States v. Ghant, 339 F.3d 660, 663 (8th Cir. 2003)(“assuming that there were two separate conspiracies, they were close in time and similar to each other . . . the evidence of Mr. Ghant’s participation in one would have been probative of his intent to participate in the other”); United States v. Suntar Roofing, Inc., 897 F.2d 469, 479-80 (10th Cir. 1990)(district court did not err in admitting evidence “concerning similar customer allocation agreements entered into by the defendants before and during the time period charged in the indictment ‘to show that participation of the defendants in the charged customer allocation conspiracy was part of a course of conduct and was knowing and intentional, rather than the result of accident or mistake,’” where “the similar acts presented were reasonably similar and close in time to the offense charged.”). Accord United States v. Smith Grading & Paving, Inc., 760 F.2d 527, 530 (4th Cir. 1985)(“the evidence of Dellinger’s prior bid rigging is relevant to his

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Defendants’ pre-existing business documents already produced to or seized by the E.C.

are relevant to the subject matter of this litigation.7 They should be produced to plaintiffs

immediately.

III. DEFENDANTS’ OTHER GROUNDS FOR RESISTING PRODUCTION OF THEIR E.C. DOCUMENTS SHOULD BE REJECTED

Defendants’ object to the production of the E.C. documents on two principal grounds.

(The Degussa defendants’ objections and responses to the Document Requests, which are

representative of those of other defendants, are submitted here as Exhibit H). First, defendants

contend that plaintiffs are seeking “merits discovery” that exceeds the boundaries of defendants’

intent and knowledge of the charged conspiracy”); United States v. Misle Bus & Equipment Co., 967 F.2d 1227, 1233-34 (8th Cir. 1992); Ostrofe v. H.S. Crocker Co., 740 F.2d 739, 743 (9th Cir. 1984), cert. denied, 469 U.S. 1200 (1985)(evidence of one price-fixing conspiracy admissible as probative of the existence of a second related conspiracy); LaSalvia v. United Dairymen of Arizona, 804 F.2d 1113, 1116 (9th Cir. 1986); Bray v. Safeway Stores, Inc., 392 F.Supp. 851, 861 (N.D. Cal. 1975)(in action alleging conspiracy to fix wholesale prices to one set of customers, evidence admitted of simultaneous conspiracy by same defendants to fix retail prices to another set of customers: “To prevent the jury from hearing evidence concerning retail price fixing would . . . have irrationally segmented the defendant’s behavior into artificial components. The jury should not be forced to examine the conspiracy in a vacuum, the evidence relating to retail prices allowed the jury to scrutinize the behavior of the defendant in its entirety and understand the intent, motive and method behind it’s activities”).

7 Even when relevance is less clear, courts are guided by the fundamental axiom that discovery is broad and liberal in actions such as this. See In re Plastics Additives Antitrust Litigation, 2004 WL 2743591 (E.D. Pa. Nov 29, 2004) (“It is well-settled that courts presiding over antitrust cases generally take a liberal [or ‘expansive’] view of relevance in determining the scope of discovery”). Accord SmithKline Beecham Corp. v. Apotex Corp., 2006 WL 279073, at *3 (E.D. Pa. Jan. 31, 2006)(in antitrust case, the court ruled that “[r]elevance is generally construed broadly . . . As such, the liberal discovery permitted by the Federal Rules of Civil Procedure ensures that no relevant facts remain hidden.”)(citations omitted); In re Automotive Refinishing Paint Antitrust Litig., 2004 U.S. Dist. LEXIS 29160 at *14-17 (E.D. Pa. October 29, 2004)(accord). “The Courts have traditionally allowed liberal discovery, particularly when there are allegations of conspiracy and where ‘broad discovery may be needed to uncover evidence of invidious design, pattern or intent.’” In re Potash Antitrust Litig., 1994 WL 1108312, at *14 n.20 (D. Minn. Dec. 5, 1994). See generally In re Uranium Antitrust Litig., 480 F. Supp. 1138, 1155 (N.D. Ill. 1979)(“the heart of any American antitrust case is the discovery of business documents. Without them, there is virtually no case”); SmithKline Beecham Corp. v. Apotex Corp., 2006 WL 279073 at *3 (citations omitted)(“Where there is doubt over relevance, the rule indicates that the Court should be permissive” in granting the discovery request).

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discovery obligations under the October 24 Order. Second, defendants insist that any production

of documents given to the E.C. in connection with its hydrogen peroxide price-fixing

investigation is contrary to E.C. law and principles of international comity. Both of these

contentions are without merit.

A. The October 24 Order Should Not Preclude Production of the Disputed Documents

In paragraph 1(a) of the October 24 Order (Ex. B), this Court directed defendants to

provide to plaintiffs, inter alia, “[a]ll documents produced to the Grand Jury and/or to the United

States Department of Justice (‘DOJ’) relating to the investigation into allegedly anti-competitive

conduct relating to hydrogen peroxide, and/or its downstream products sodium perborate and

sodium percarbonate (collectively, ‘hydrogen peroxide’)….” Paragraph 1(e) of the October 24

Order relieved defendants of the obligation to provide additional documents “prior to the Court’s

resolution of the Direct Purchaser Plaintiffs’ motion for class certification,” unless “there is good

cause” and such documents are “necessary for litigating class certification issues.” As

demonstrated below, the October 24 Order should not operate to postpone the production of the

documents sought here, which are merely European counterparts to the Grand Jury and DOJ

documents that the October 24 Order explicitly directed defendants to produce.8

The October 24 Order reflects an understanding that there may be appropriate limits to

discovery in antitrust litigation before entry of an order granting class certification. The Court

nevertheless acknowledged plaintiffs’ right to “make further follow-up requests for documents

and information if there is good reason” and the requested documents are “necessary for

litigating class certification issues.”

1. Defendants Will Not Suffer Undue Burden 8 Because Degussa A.G. and Solvay, S.A. are not parties to the Stipulation approved by the Court’s October 24 Order, they should not rely upon the terms of the Stipulation to evade plaintiffs’ legitimate discovery requests.

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in Producing Documents Already Given to the E.C. The requested documents may relate to class certification because they bear on the same

cartel, members, practices and impacts. There is, in any event, no question that the requested

documents are important to the prosecution of this case. They can be produced easily at this time

without undue burden to defendants and without offending the underlying concept of the October

24 Order that class certification issues should be decided before “full blown” merits discovery.

The October 24 Order was entered upon a stipulation executed by plaintiffs. However,

several material events have subsequently occurred. As noted above, on March 14, 2006,

defendants Solvay and Akzo were charged criminally and pleaded guilty to charges of fixing the

prices of hydrogen peroxide products “sold in the United States and elsewhere.” On May 3,

2006, the E.C. imposed its extraordinary fines on certain defendants. After these events

transpired, plaintiffs propounded additional document requests on defendants relating to the E.C.

investigation. Plaintiffs agreed to limit these requests to documents that defendants had already

given to the E.C. in connection with its hydrogen peroxide price-fixing investigation (see Exhibit

C).9 With plaintiffs’ request narrowly circumscribed, defendants cannot credibly contend that

they would endure any hardship if they were required to produce the same documents they

already surrendered to the E.C. Such documents have already been collected, segregated and

reviewed. Defendants can make these documents available to plaintiffs with virtually no

additional effort. See, e.g., Automotive Refinishing Paint, 2004 U.S. Dist. LEXIS 29160 at *20

("...a number of [p]laintiffs' requests deal with documents previously produced to a federal, state

9 In a good faith effort to avoid this discovery dispute, plaintiffs narrowed the Document Requests significantly to cover only two of several categories of documents sought: (a) all documents provided to the EC in connection with the EC Investigation; and (b) copies of all documents seized by the EC in connection with the EC Investigation. See Exhibit A, Document Requests 4 and 6.

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or foreign governmental entity or investigatory body, and reproduction of those documents to

Plaintiff should not cause an unnecessary burden or hardship on defendants").

2. The Previous Grounds for Delay of Merits Discovery Are Now Moot Plaintiffs stipulated to this Court’s entry of the October 24 Order, including its deferment

of “merits” discovery, based upon a now-superceded case management schedule in which all

class certification discovery and briefing was to have been concluded by July 31, 2006. See

Exhibit I. The parties worked cooperatively to meet that deadline, and they agreed that there was

good cause to petition the Court to extend the schedule for class certification, which the Court

has done. See Exhibits J and K. Under the current revised schedule, class certification

submissions in opposition to class certification must be completed by October 17, 2006. See

Exhibit L.

Given the unanticipated length of class certification proceedings (and, even more

importantly, the intervening EC adjudication of certain defendants’ involvement in the hydrogen

peroxide cartel during the relevant time period in this litigation and the guilty pleas entered in the

United States by European-based defendants Solvay S.A. and Akzo Nobel Chemicals

International, B.V.), plaintiffs believe that it is now appropriate to proceed with limited

additional discovery of documents that (a) are relevant to the case; (b) will have to be produced

by defendants and reviewed by plaintiffs at some point in the case; and (c) have already been

collected, reviewed and segregated by defendants and therefore can be readily produced to

plaintiffs with minimal effort and distraction. Production of these documents will allow plaintiffs

to make more effective use of their time in this litigation as defendants continue to focus their

principal efforts on class certification briefing.

B. Production of the Pre-existing Business Records Produced to The E.C. Does Not Violate E.C. Law or Principles of International Comity

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Defendants also refuse to produce the business records furnished to or seized by the E.C.

on the grounds that such production would violate E.C. rules and “principles of international

comity as set forth by the Supreme Court in F. Hoffman-Laroche v. Empagran S.A., 542 U.S.

155, 164 and 169 (2004).” See, e.g., Objections and Responses of Defendants Degussa

Corporation and Degussa A.G. (Ex. H) at ¶¶ 5-7 (quoting, 2002 Commission Notice on

Immunity from Fines and Reduction of Fines in Cartel Cases; Commission Notice on the rules

for access to the Commission file in cases pursuant to Articles 81 and 82 of the E.C. Treaty,

Articles 53, 54 and 57 of the EEA Agreement and Counsel Regulation (EC) No 139/2004 of

December 22, 2005 (2005/C 325/07)).

Nothing in Empagran or the above-cited E.C. pronouncements suggests that customers

pursuing antitrust claims in United States federal courts should be denied access to pre-existing

business records that have been furnished to the E.C. Moreover, the latest and most authoritative

statement by E.C. officials in relation to the issue of discovery in antitrust actions pending before

United States courts was made on April 4, 2006 by Paul Lowe, Director General of the European

Commission Competition DG, who emphasized that discovery of pre-existing business records

submitted by price-fixers to the E.C. is both appropriate and desirable:

[W]e would like to underline that our plea [for confidential treatment of leniency applicant statements] does not extend to a protection from disclosure and discovery for all documents that form part of our administrative file. . . . [P]rotection should be afforded only to those submissions that a company has prepared and produced exclusively for the European Commission’s investigation. Consequently [the Directorate General for Competition] wants to underline that it has no interest to generally protect pre-existing documents (that the applicant is required to submit under the EC Leniency program) from discovery in US Courts.

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See April 4, 2006 letter and attachment from Paul Lowe to A. Heimert, Executive Director of

Europe’s Antitrust Modernisation Commission (“E.C. Submission”), a copy of which is attached

as Exhibit M, at 6.

The E.C. Submission contradicts defendants’ assertion that pre-existing documents

turned over to or seized by the E.C. are exempt from production to plaintiffs in this litigation.10 It

also recognizes the wisdom of United States federal courts that have held that documents in the

possession of the E.C. relating to international price-fixing conspiracies are probative of

antitrust price-fixing claims asserted by American consumers in their domestic judicial forums.

See supra at 6-7.

Defendants’ reliance upon Empagran as a reason why the disputed documents should be

withheld from plaintiffs is similarly misplaced. In Empagran, Chief Judge Thomas F. Hogan of

the District Court for the District of Columbia granted a motion to dismiss foreign purchasers’

antitrust claims for lack of subject matter jurisdiction on the ground that plaintiffs’ purchases

were “wholly foreign transactions,” and the foreign transactions at issue were not deemed to

have “direct, substantial, and reasonably foreseeable effects upon United States commerce.”

Empagran S.A. v. F. Hoffman-La Roche, Ltd., 2001 WL 761360 at *3-4 (D.D.C. June 7, 2001)

(emphasis supplied). No issue relating to discovery was presented to Chief Judge Hogan in

Empagran nor was any such issue decided by him there.

After the D.C. Circuit reversed the District Court’s ruling in Empagran (315 F.3d 338

(D.C. Cir. 2003)), the Supreme Court vacated and remanded the Court of Appeals’ opinion,

concurring with Chief Judge Hogan’s conclusion that the Sherman Act provides no remedy when

10 To streamline the discovery dispute now before the Court, plaintiffs do not at this time seek an order requiring defendants’ production of the E.C.’s currently unpublished ruling or transcripts of testimony given by representatives of defendants before the E.C, all of which were sought in plaintiffs’ Document Requests. See, supra, at 2 n. 2. However, those documents should be produced later in this litigation if and when this Court grants class certification.

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defendants’ anticompetitive conduct “causes independent foreign harm and that foreign harm

alone gives rise to the plaintiff’s claim.” 542 U.S. 155, 166, 175 (2004) (emphasis in original).

Again, neither the Court of Appeals nor the Supreme Court in Empagran considered the issue of

discovery, much less invoked principles of international comity as a justification for denying

relevant documents to American parties pursuing claims under the United States antitrust laws.

Apparently, no other court has applied Empagran to produce such an anomalous result.

However, less than two weeks after he dismissed foreign plaintiffs’ claims in Empagran,

Chief Judge Hogan considered the same type of argument made by defendants here. In In re

Vitamins Antitrust Litig., supra, No. 99-197, 2001 WL 1049433, at *11 (D.D.C. June 20, 2001),

an antitrust class action by American customers alleging that an international price-fixing

conspiracy had an impact on United States commerce, the judge discussed and distinguished his

opinion in Empagran, holding:

Although these [non-United States governmental] actions may not be admissible to establish damages because, as this Court has previously ruled, plaintiffs’ claims are limited to those injuries with a sufficient United States nexus, the information would be relevant to show the breadth of the conspiracy, the role that each defendants’ executives played in implementing, expanding, enforcing and concealing the conspiracy, and how the conspiracy was maintained for the length of time alleged. It could also lead to the discovery of other admissible information by allowing plaintiffs to discover “the identity and location of persons having knowledge of any discoverable matter,” which is explicitly authorized by Revised Fed. R. Civ. P. 26(b)(1). Furthermore, this information could be extremely relevant for purposes of impeaching defendants’ trial witnesses.

Id. at *11 (citations in text omitted) and n.24 (citing Empagran, 2001 WL 761360 (June 7,

2001)).

As the presiding judge in both Empagran and Vitamins, Chief Judge Hogan was in a

unique position to appreciate the distinction between international discovery (which he approved

in Vitamins) and subject matter jurisdiction (which he found lacking in Empagran). Given the

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very different considerations involved, Empagran does not support defendants’ refusal to

produce the pre-existing business records they turned over to the E.C. That fact that defendants

rely so heavily upon inapposite precedent serves only to underscore the absence of merit

underlying their objections to the discovery at issue in this motion.

III. CONCLUSION

For the foregoing reasons, plaintiffs' motion to compel discovery should be granted.

Respectfully submitted,

Dated: August 30, 2006 BOLOGNESE & ASSOCIATES LLC By:

Anthony J. Bolognese Joshua H. Grabar John G. Narkin One Penn Center 1617 JFK Blvd., Suite 650 Philadelphia, PA 19103 Telephone: (215) 814-6750 Facsimile: (215) 814-6764

Michael D. Hausfeld William P. Butterfield Reena Gambhir COHEN MILSTEIN HAUSFELD & TOLL, PLLC 1100 New York Avenue, N.W. West Tower, Suite 500 Washington, DC 20005 Telephone: (202) 408-4600 Facsimile: (202) 408-4699 Robert N. Kaplan Gregory Arenson Jason Zweig KAPLAN FOX & KILSHEIMER LLP 805 Third Avenue, 22nd Floor New York, NY 10022 (212) 687-1980 (212) 687-7114 (fax)

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Steven A. Kanner William H. London Douglas A. Millen MUCH SHELIST FREED DENENBERG AMENT & RUBENSTEIN, P.C. 191 North Wacker Drive, Suite 1800 Chicago, IL 60606 Telephone: (312) 521-2000 Facsimile: (312) 521-2100 Interim Co-Lead Counsel for Plaintiffs

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