Friday, January 17, 2014

Blomkest Fertilizer, Inc. v. Postash Corp. of Saskatchewan, Inc. case brief

Blomkest Fertilizer, Inc. v. Postash Corp. of Saskatchewan, Inc. case brief summary

A Canadian potash (used in creating fertilizer) mining firm was privatized and raised its prices significantly after entering into a Suspension Agreement with the U.S. Department of Commerce regarding alleged dumping of potash into the U.S. market. The Court found that parallel pricing plus evidence of price verification after sales was insufficient to show an anticompetitive agreement.

Notable Facts
  • A memorandum issued by Canpotex, a lawful Canadian potash cartel, which included a price list, was disregarded because there was limited evidence to how widely it was dispersed (or where it was intended to go) and that evidence that companies were aware of their competitors prices before they raised their own prices was merely parallel pricing.
  • The court found that they were not acting against their own self-interest, a potential plus factor.
  • Dissent suggests that the only problem was deterring cheating, not reaching consensus; consequently the fact that price verification calls were only made after the sales were complete makes complete sense.
Legal Considerations
  • A prima facie case requires that ╬ás present evidence that tends to exclude the possibility of independent action (citing Monsanto)
  • If the evidence is equally likely to support a hypothesis of independent action as it is to support a hypothesis of an anticompetitive agreement, the evidence is insufficient (citing Matsushita)
  • The court disregarded expert testimony because it relied excessively on facts that were not probative as a matter of law and because it failed to account for the privatization of PCS.

  • Baker suggests that the dissent synthesizes the plus factors into a story about collusion, whereas the majority merely treats them as a checklist. The dissents’ story is much more complex and relies more heavily upon an economic analysis than that of the majority: a common issue post-Matsushita.
  • The best evidence of the majority is the alternative explanation for the rise in prices i.e. the privatization of PCS and the agreement with the U.S. Department of Commerce.

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