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In re Urethane Antitrust Litigation

United States District Court, Tenth Circuit

September 30, 2013

BASF SE, et al. This Order Relates to the following Polyether Polyol Case Carpenter Co., et al.


JAMES P. O'HARA, Magistrate Judge.

The plaintiffs in this multidistrict litigation allege that the defendant, The Dow Chemical Company, conspired with other chemical manufacturers to fix prices for polyether polyol products sold throughout the world.[1] Merits discovery in this litigation closed, for the most part, on February 17, 2012.[2] Direct-action plaintiffs Carpenter Co. and E.R. Carpenter, L.P. (collectively, "Carpenter") have filed a motion to reopen discovery for the limited purpose of allowing current and former Carpenter employees who previously invoked the Fifth Amendment privilege[3] to withdraw the invocation and testify (doc. 3027). Dow has filed a motion to strike Carpenter's motion to reopen discovery, arguing that it is in essence a surreply to a currently pending motion to dismiss filed by Dow (doc. 3033). Alternately, Dow asserts that Carpenter's motion should be denied as untimely and/or because Carpenter has not demonstrated good cause to allow the discovery. Because the court believes Carpenter's motion to reopen discovery is a valid motion and is based on good cause, that motion is granted and Dow's motion to strike is denied.

I. Background

A. The Witnesses' Invocation of the Fifth Amendment

In July 2010, it was publicly reported for the first time that the United States Department of Justice was conducting a grand-jury investigation into a possible price-fixing conspiracy by manufacturers of foam products, including Carpenter and four other direct-action plaintiffs ("DAPs"). It also became known that the Canadian Competition Bureau was conducting a parallel investigation into possible violations of Canadian antitrust laws. Related to those investigations, the United States and Canada subpoenaed documents and seized evidence from foam manufacturers. Upon learning of the criminal investigations, Dow and its co-defendants served discovery requests seeking information relating to the investigations, and noticed the depositions of twenty-six individuals allegedly implicated in the foam conspiracy. Citing, in part, Fifth Amendment concerns, DAPs moved for a protective order prohibiting defendants from conducting discovery into whether DAPs engaged in a conspiracy to fix prices for foam products. The court denied that motion.[4] In January 2012, six current or former Carpenter employees ("the Carpenter witnesses") were deposed. Each answered certain background questions, but declined to answer all other questions on Fifth Amendment grounds.

B. Dow's Motion to Dismiss and the Parties' Discussions Regarding Withdrawal of the Fifth Amendment Invocations

After the conclusion of the class-action trial in this litigation, the court invited the parties in the direct-action cases to submit statements of issues that they believed remained in the direct-action cases.[5] Dow stated its intention to seek dismissal of DAPs' claims based on DAPs' refusal to provide discoverable information due to their employees' invocations of the Fifth Amendment.[6] Following a status hearing on May 21, 2013, the court entered an order setting forth the procedure for Dow to file a dispositive motion relating to the witnesses' invocation of the Fifth Amendment.[7]

On June 14, 2013, Dow's counsel sent a letter to DAPs' counsel asking whether persons who previously refused to provide testimony on Fifth Amendment grounds might now agree to provide testimony which would allow Dow to defend itself and thereby alleviate the need for Dow to file a motion to dismiss.[8] Specifically, the letter read,

Dow intends to file a motion seeking to dismiss the claims of several plaintiffs on the grounds this widespread use of the Fifth Amendment to refuse to provide discovery has left Dow unable to obtain information relevant and important to its defenses in these case.... Of course, Dow understands that dismissal should be avoided if there is a way to obtain this discoverable information now, even if it was not available at the time it was sought. Therefore, Dow asks that plaintiffs agree to supplementary discovery for the limited purpose of updating the testimony from those persons who previously refused to provide it on Fifth Amendment grounds.[9]

Dow asked DAPs to respond to the letter by July 18, 2013. Counsel for DAPs timely responded that DAPs were willing to "work with you... to see if there can be an accommodation, " but noted that each of the witnesses whom invoked the Fifth Amendment was represented by separate counsel who would have to be contacted.[10] DAPs' counsel made inquires to their various clients, who in turn contacted counsel for the witnesses. But because the timing of responses from the witnesses was uncertain, DAPs' counsel suggested that Dow file its motion to dismiss by its approaching deadline for so doing.[11] On July 23, 2013, Dow filed a motion to dismiss the DAPs' claims, asserting that "Dow has been denied information critical to its ability to defend itself at trial" because DAP employees "have invoked their Fifth Amendment rights and refuse to testify about what they know."[12]

On August 14, 2013, counsel for DAPs informed Dow that it learned the day before that "Stan Pauley of Carpenter, who previously asserted his rights under the Fifth Amendment, is willing to sit for deposition in our case."[13] DAPs asked Dow whether it would consent to a motion by DAPs to open discovery for the purpose of permitting Dow to depose Pauley.[14] Over the next few days, DAPs informed Dow that Frank Hurst and Stan Yukevich of Carpenter also were now willing to give substantive testimony in this case.[15] On August 19, 2013, Dow responded by letter that "[i]f the DAP agree to a six-month period of general discovery into and related to the claims asserted by Carpenter and Dow's defenses, then Dow will not oppose a motion seeking leave to permit Dow to depose Messrs. Pauley, Hurst, Yukevich and Malechek."[16]

DAPs filed their response to Dow's motion to dismiss on August 21, 2013.[17] Thereafter, the parties continued to negotiate the reopening of the Carpenter witnesses' depositions. DAPs informed Dow that, while they did not agree to the unlimited reopening of discovery on Carpenter's claims, they did "acknowledge that it is possible that after the depositions there might be limited reasonable follow up concerning matters that Dow could not have raised earlier and we would agree to address those as they occur."[18] On August 26, 2013, Dow responded that, while it was willing to discuss the duration of a general period of discovery, it was "not willing to agree to any other restrictions on its ability to conduct this discovery."[19] Because the parties could not reach agreement on the discovery that would be permitted if the Carpenter witnesses were re-deposed, Carpenter filed the instant motion.

II. Analysis

Before reaching the merits of Carpenter's motion to allow the Carpenter witness to withdraw their Fifth Amendment invocations and testify, the court will address Dow's arguments that the motion ...

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