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Office supply giant 3M is facing a trio of antitrust suits over its alleged monopolizing of the market for transparent tape now that a Pennsylvania federal judge has refused to dismiss a suit brought by a class of large-volume retailers. In his 16-page opinion in Meijer Inc. v. 3M, U.S. District Judge John R. Padova rejected 3M’s argument that the suit should be dismissed on statute of limitations grounds and because the plaintiffs had failed to state a valid claim of antitrust injury. The case directly stems from a prior suit, LePage’s Inc. v. 3M, which resulted in a $68 million verdict. In the wake of the LePage’s verdict, 3M was hit with a class action brought by direct purchasers. That case, Bradburn Parent/Teacher Store Inc. v. 3M, at first hit a snag when Padova refused to certify the class, finding that it suffered from internal conflicts since small-volume retailers who sold only 3M’s brand-name tapes — Scotch and Highland — would likely take a different approach to proving their damages from large-volume retailers who also sold 3M’s “private label” or store brand tapes. The plaintiffs lawyers solved the problem by narrowing the class to exclude such large-volume retailers. Since then, 3M has been hit with two more suits brought by large-volume retailers that were excluded from the Bradburn class. The first, Publix Super Markets Inc. v. 3M, was filed on behalf of a Florida-based chain of supermarkets, the 10th largest chain in the country with $18.6 billion in annual revenue from its 855 stores in Florida, Georgia, South Carolina, Alabama and Tennessee. Publix is represented by attorneys Anthony Bolognese and Joshua H. Grabar of Bolognese & Associates, along with Paul E. Slater of Sperling & Slater in Chicago. The second suit is a proposed class action on behalf of all large-volume retailers filed by Meijer Inc. Lawyers for 3M moved for dismissal of the Meijer class action, arguing that the plaintiff had waited too long before filing suit. But the plaintiffs’ lawyers argued that the suit should not be barred by the four-year statute of limitations — despite the fact that they are seeking damages beginning in 1998 — because the claim qualified for two exceptions. In their brief, the plaintiffs lawyers — led by attorney Ira Neil Richards of Trujillo Rodriguez & Richards in Philadelphia — argued that the suit is timely under the “continuing violation” and “speculative damages” exceptions to the four-year accrual rule. The continuous violation exception should be applied, the plaintiff’s team argued, because the predatory and exclusionary practices 3M engaged in outside the limitations period have resulted in continuing and accumulating harm within the limitations period by allowing 3M to continue to charge supracompetitive prices for its invisible and transparent tape. Padova agreed, saying, “courts have held that, in purchaser antitrust actions, the requisite injurious act within the limitations period can include being overcharged as the result of an unlawful act which took place outside the limitations period but continues to allow the defendant to maintain market control.” In the LePage’s suit, the plaintiff claimed that 3M set out to drive it out of the market for transparent tape by offering “bundled” rebates to large retailers for reaching sales goals in several categories of 3M products. In reality, the suit said, the rebates could be earned only by removing LePage’s products from their shelves. In the Meijer suit, the plaintiffs’ lawyers argue that “as found in LePage’s … 3M’s unlawful maintenance of its tape monopoly has suppressed competition and has maintained prices paid by direct purchasers to 3M above competitive levels, even after any 3M rebates attributable to tape purchases.” Padova concluded that the suit alleges a valid claim under the continuing violation theory “on the basis of an initial overt act of unlawful maintenance of monopoly power that occurred more than four years ago, but which continues to allow 3M to commit the injurious act of overcharging Meijer and other purchasers.” Meijer also argues that it qualified for an exception to the statute of limitations because its damages were speculative prior to the filing of the suit. Padova agreed, saying, “In purchaser antitrust actions, damages from future overcharges necessarily fall into the speculative damages exception to the four-year statute of limitations.” Padova cited the 1979 decision from the 2nd U.S. Circuit Court of Appeals in Berkey Photo Inc. v. Eastman Kodak Co., in which the court explained that “at the time a monopolist commits anticompetitive conduct it is entirely speculative how much damage that action will cause its purchasers in the future. … Not until the monopolist actually sets an inflated price and its customers determine the amount of their purchases can a reasonable estimate be made.” Adopting that logic, Padova found that Meijer’s claims cannot be barred as untimely. “To hold otherwise would require a purchaser to predict and prove, within four years of the time it was first injured by anticompetitive conduct, the amount of future overcharges, the quantity of future product purchases, the level of future competition in the relevant market, and the availability of substitutes and new suppliers over time,” Padova wrote. “Resolution of these issues depends on overall changes in consumer demand for tape, developments in the purchaser’s overall business, variations in the cost of producing the product over time, and the future prices which the supplier ultimately decides to charge. These considerations are too speculative and remote to properly predict a purchaser’s future damages,” Padova wrote. As a result, Padova concluded that “Meijer’s antitrust claim against 3M could not accrue until it actually payed the overcharge.” In addition to Richards, the plaintiff’s team includes attorneys Kathryn C. Harr of Trujillo Rodriguez; Joseph M. Vaneck, Thomas A. Vickers and David P. Germaine of Daar & Vaneck in Chicago; and Daniel A. Small, Brent W. Landau and Linda P. Nussbaum of Cohen Milstein Hausfeld & Toll’s New York and Washington, D.C., offices. The defense team for 3M consists of attorneys John G. Harkins Jr. and Eleanor Illoway of Harkins Cunningham in Philadelphia, along with Brent N. Rushforth, David W. Engstrom, Katherine E. Wood, Kit A. Pierson and Paul Alexander of Heller Ehrman in Washington.

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