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Chocolate lawsuits to be consolidated


May 30, 2008
By Cam Wood


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May 30, 2008, Harrisburg, Pa. – A federal judge and dozens of lawyers
on Thursday began the process of figuring out how to consolidate about
80 lawsuits that claim chocolate manufacturers conspired to
artificially boost prices.

May 30, 2008, Harrisburg, Pa. – A federal judge and dozens of lawyers
on Thursday began the process of figuring out how to consolidate about
80 lawsuits that claim chocolate manufacturers conspired to
artificially boost prices.

U.S. District Judge Christopher C. Connor is handling cases from across the United States that have been merged in Harrisburg federal court, about 10 miles from the headquarters of defendant The Hershey Co.

Hershey lawyer Thomas D. Yannucci argued that his client and the other defendants _ units of Mars Inc., Nestle SA and Cadbury Schweppes PLC, as well as ITWAL Ltd., a Canadian distributor – deserve the right to seek dismissal before having to start turning over documents that might be used against them.

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In the Chocolate Confectionary Antitrust Litigation, as the court has captioned the case, manufacturers are being sued by companies that purchased chocolate directly and indirectly, and by consumers.

Yannucci said the cases involve actions that allegedly occurred in Canada – not in the United States.

"They haven't alleged a single meeting in the United States by anybody at any time to fix prices," Yannucci told the judge.

Investigations into price-fixing allegations in the chocolate industry have been launched by U.S., Canadian and European authorities. Canadian court documents unsealed in December alleged that senior executives held secret price-fixing meetings in coffee shops and restaurants as well as at industry conventions.

Plaintiffs' attorney Walter W. Cohen said his clients want documents that have been, or will be, provided to government investigators.

The plaintiffs said in court papers last week that a series of unprecedented price increases for chocolate products began in December 2002. They described those price rises as unusual because they occurred during a period of declining demand.

The plaintiffs allege the defendants colluded to artificially inflate prices and then concealed their actions. They want to know more about what occurred in both the United States and Canada.

Cohen noted in court papers that some company executives are responsible for both the United States and Canada and that "the defendants' United States and Canadian operations are run on an integrated basis."

The defendants filed court papers last week that said parallel pricing behavior is allowed as long as there is no agreement among the companies. They said they planned to seek dismissal because no one has asserted a valid claim under U.S. antitrust law.

The defendants said it was not surprising that chocolate prices rose along with overall food prices.

"Nor should it surprise any objective observer that manufacturers of products whose primary ingredients are cocoa, milk, sugar, nuts and other similar inputs all face similar cost increases at the same time," they wrote.

Source: The Associated Press