Diamond Chemical Co. v. Akzo Nobel Chemicals B.V.

Citations: 205 F.R.D. 33; 2001 U.S. Dist. LEXIS 21869Docket: No. 01CV02118(CKK)

Court: District Court, District of Columbia; December 20, 2001; Federal District Court

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The court has preliminarily approved the settlement agreement dated October 30, 2001, between Class Plaintiffs and Akzo Nobel Chemicals B.V. and Akzo Nobel Functional Chemicals, L.L.C., referred to as the Settling Defendants. The agreement has been deemed reasonable enough to warrant notification to potential class members. The Akzo Settlement Class is certified, comprising individuals or entities that directly purchased Monochloroacetic Acid in the U.S. from the defendants or their co-conspirators between September 1, 1995, and August 31, 1999, with exclusions for governmental entities, defendants, co-conspirators, and their affiliates. The Class Plaintiff is recognized as an adequate representative for the class. Should the settlement be terminated, class certification will be void, and the Settling Defendants maintain the right to challenge class certification and the adequacy of the Class Plaintiff.

Class Plaintiffs Counsel is tasked with mailing notices of the proposed settlement and settlement hearing to potential class members within 40 days of the order's entry and publishing summary notices in designated publications within specified timelines. A sworn statement confirming compliance with notice provisions must be filed before the Settlement Hearing. The court concludes that the notice method described is the most effective means of notification, fulfilling the requirements of Federal Rule of Civil Procedure 23.

Members of the Akzo Settlement Class wishing to exclude themselves must send a written Request for Exclusion by certified mail to the Claims Administrator by March 25, 2002. The request must include the requesting party's name, address, any trade names, and details of any related entities that purchased Monochloroacetic Acid between September 1, 1995, and August 31, 1999. Contact information for a representative must also be provided. The Claims Administrator will forward copies of exclusion requests to Class Plaintiffs Counsel and, upon request, to the Settling Defendants' counsel. By April 20, 2002, the Claims Administrator will submit a record of those who have excluded themselves to the Clerk of the Court and the involved counsels. Those who fail to timely and properly request exclusion will be included in the Settlement Class and bound by the Settlement Agreement's terms, including any releases and waivers. Court-approved Claim Forms and distribution plans will be provided later for those not excluded. A Settlement Hearing to evaluate the proposed settlement's fairness and adequacy is scheduled for May 10, 2002, at 9:00 a.m. in Washington, D.C.

Members of the Akzo Settlement Class who have not previously filed a Request for Exclusion may attend the Settlement Hearing in person or through counsel to express their views on the proposed settlement and related matters. To oppose the settlement, they must file a notice and statement of their opposition, along with supporting documentation, with the Court by April 5, 2002, and serve copies to specified counsel. The Settlement Hearing's date and time will be included in the Notices sent to the class members, but the Court may adjourn it without further notice beyond what may be posted at the Court or on its website.

Terms defined in the Settlement Agreement are used in this Order as defined therein. Upon approval of the settlement, the Settlement Agreement and its terms will be incorporated into the Court's Order and will have full legal effect. If the settlement is terminated per the Settlement Agreement, all related proceedings will be void, preserving the pre-settlement rights of the Settling Defendants and the Settlement Class members. Additionally, all proceedings in the Class Action against the Settling Defendants are stayed until the Court makes a final decision on the settlement approval and, if approved, issues a final judgment as outlined in the Settlement Agreement.

All individuals and entities who directly purchased monochloroacetic acid or sodium monochloroacetate from Akzo Nobel or its co-conspirators between September 1, 1995, and August 31, 1999, in the U.S. or for delivery in the U.S. are notified of a proposed class action settlement. A hearing is scheduled for May 10, 2002, at 9:00 a.m. before Judge Colleen Kollar-Kotelly at the U.S. District Court for the District of Columbia to assess the fairness and adequacy of a settlement agreement reached with Akzo Nobel Chemicals B.V. and Akzo Nobel Functional Chemicals L.L.C., which includes a cash payment equal to 20% of their sales of the relevant chemicals during the specified period. The settlement aims to benefit the class members and, if approved, will result in dismissal of the litigation against Akzo. Plaintiffs' counsel plans to request attorneys’ fees and reimbursement for costs associated with the settlement at a later date. Class members are advised to read the notice carefully as it may affect their rights, and can obtain additional information by contacting a designated address in Philadelphia. They are instructed not to contact the court or clerk's office regarding this notice.

The Akzo Settlement Class comprises all individuals and entities that directly purchased monochloroacetic acid or sodium monochloroacetate (MCAA) in the United States from any defendants or their co-conspirators between September 1, 1995, and August 31, 1999, excluding government entities and the defendants themselves. Members need not take any action to remain part of the class. Their rights will be represented by the Class Plaintiff and their counsel, and they will later have the opportunity to submit claims to receive compensation from the Akzo Settlement Fund.

Transferees or successors of class members may also submit claims and will be bound by the Settlement Agreement, subject to court approval. The proposed settlement includes a cash payment from Akzo Nobel equal to 20% of its sales of MCAA during the specified period, adjusted for previously resolved claims. This payment will fund distributions to class members who submit valid claims based on their purchase amounts. Additionally, attorneys’ fees for the plaintiffs’ counsel will be sought independently from the Settlement Fund.

The class action lawsuit alleges that Akzo Nobel and co-defendants engaged in price-fixing of MCAA in violation of the Sherman Act, leading to higher prices for consumers. A negotiated settlement has been reached, pending court approval. The court certified the Akzo Settlement Class and conditionally designated the Class Plaintiff as its representative on December 20, 2001, while also preliminarily approving the Settlement Agreement.

The court has not made any rulings on the claims or defenses presented by either party and does not express any opinion on their merits. Class Plaintiffs Counsel initiated an investigation into MCAA following public disclosures and investigations involving Akzo Nobel. They conducted thorough fact-finding and consulted various experts, concluding that the proposed settlement is fair, reasonable, and in the best interests of the Akzo Settlement Class.

Under the proposed settlement, Akzo Nobel will make a cash payment equivalent to 20% of its MCAA sales, adjusted for prior claims, within 10 business days of executing the Settlement Agreement. This payment, along with any accrued interest, will constitute the “Akzo Settlement Fund.” Akzo Nobel has the right to terminate the settlement if purchasers representing over 10% of its sales opt out of the agreement, excluding those who have previously settled antitrust claims with Akzo.

Post-Final Approval, the court may allow interim disbursements from the Settlement Fund for reasonable costs and expenses before the remaining funds are distributed to class members according to an approved distribution plan. Akzo Nobel has also agreed to assist the Class Plaintiffs in ongoing litigation by providing access to relevant documents and personnel.

If individuals do not opt out of the Akzo Settlement Class and the court approves the Settlement Agreement, they will be bound by all court orders and judgments, including the dismissal and release of their claims, regardless of their participation in the settlement or submission of a claim form.

If the Court approves the Settlement Agreement, members of the Akzo Settlement Class who did not exclude themselves will release Akzo Nobel and its affiliates (collectively referred to as "Releasees") from all claims related to the purchase, sale, or pricing of MCAA and any conduct alleged in the Class Action prior to the Settlement Agreement. This includes a waiver of known and unknown claims, regardless of whether they have been asserted or could have been asserted in the Class Action. However, this release does not affect the rights of Releasors to seek damages for MCAA purchased directly from the manufacturer outside the U.S. or to participate in settlements for indirect purchasers of MCAA. The release also encompasses a waiver of rights under California Civil Code Section 1542, which pertains to unknown claims. Each Releasor acknowledges the possibility of discovering new facts but agrees to fully release any claims upon Court approval of the Settlement Agreement, regardless of subsequent discoveries. Claims against individuals or entities other than the Releasees remain unaffected, and product liability or breach of contract claims unrelated to the Class Action are also excluded from the release.

Attorneys’ fees and expenses for Class Plaintiffs Counsel will not be requested at this time but may be paid from the Settlement Fund upon Court approval. Akzo Nobel will also separately pay attorneys’ fees after Court approval. Notice will be provided to Class Counsel when a request for payment of attorneys’ fees and litigation costs is made.

Members of the Akzo Settlement Class who do not opt out and whose settlement becomes effective will be eligible to participate in the Akzo Settlement Fund. Claim Forms will be distributed later, and members must retain documentation for MCAA purchases claimed. Prior agreements settling antitrust claims related to MCAA purchases will preclude recovery under this Settlement Agreement for those specific purchases.

The distribution of the Akzo Settlement Fund will occur after the Court's final approval of the settlement and the resolution of any appeals. Authorized Claimants, who submit valid Claim Forms, will receive distributions based on direct MCAA purchases made in the U.S. from September 1, 1995, to August 31, 1999. Recovery is not available for purchases outside this period or for those who did not purchase MCAA at all during the eligibility timeframe. Submission of a Claim Form does not guarantee payment, as the Court may deny claims based on eligibility or legal grounds.

To exclude oneself from the Akzo Settlement Class, a written request must be sent via certified mail, postmarked by March 25, 2002, including the name, address, and any trade names of the entity seeking exclusion, as well as details of MCAA purchases made during the specified period.

To be excluded from the Akzo Settlement Class, individuals must submit a timely request for exclusion, regardless of any personal lawsuits filed against the defendants related to the same claims. Proper exclusion means individuals will not be bound by the Settlement Agreement and will not receive benefits from the Akzo Settlement Fund but can pursue their legal rights at their own expense. 

The Court will hold a Settlement Hearing to determine the fairness and adequacy of the Akzo Settlement Agreement and whether to dismiss the claims against the defendants with prejudice. Members of the Settlement Class who do not exclude themselves can attend the hearing to express their views, provided they file a notice of intention to appear and supporting documents by April 5, 2002. Failure to comply with these procedures will result in waiver of the right to contest the Settlement Agreement.

For detailed information regarding the litigation and settlement, individuals can inspect relevant documents at the United States District Court for the District of Columbia. All inquiries should be directed to the class plaintiff's counsel in writing, and not by phone or to the Court. Changes in address must be promptly reported to ensure receipt of important updates regarding the litigation.