(CN) - A federal judge melted down claims that Hershey, Mars and Nestle ran a $726 million chocolate cartel, finding that "nothing scandalous or improper has been discovered."
The multidistrict litigation sprang from 91 separate civil actions
first brought in 2007 against Hershey, Mars, Nestle and Cadbury. Cadbury settled for $1.3 million and was dismissed
from the case in 2011, and a year later U.S. District Judge Christopher Conner certified
a class of direct purchasers: those who directly purchased standard and king-size candy bars for resale from the defendants.
An expert for the plaintiffs had estimated damages at $726 million.
The confectioneries later moved for summary judgment as to the direct-purchaser class and the individual purchaser plaintiffs. The latter include major supermarkets and pharmacies like Kroger, Safeway, CVS and Rite Aid, but a civil action from Associated Wholesale Grocers is not included.
After mediation proved unsuccessfully this fall, Conner granted the motions on Feb. 26.
Hershey and the others may have upped prices "with awareness of their competitors' pricing decisions," and may have been "influenced or motivated" by their competitors' actions, but other variables were also at play, according to the ruling.
These factors include rising input costs, like raw materials, labor, health and energy costs.
The judge tossed aside the claim that the chocolatiers relied solely on "an attractive opportunity for us to catch people by surprise," as one top Mars executive put it.
"The overt evidence before the court establishes that defendants' actions, while parallel, were nonetheless the result of reasoned, independent business mindedness," Conner wrote. "Quite simply, plaintiffs have failed to establish that defendants' actions were unreasonable or irrational in the competitive market."
Although Canadian affiliates of the defendants were charged in a price-fixing scheme to which Hershey Canada pleaded guilty last June, Conner said the purchasers failed to show "any
tie" between the Canadian and American goings-on. (Emphasis in original.)
"Initially, plaintiffs' claims of a domestic price-fixing conspiracy were quite plausible," Conner wrote. "The Canadian trade spend conspiracy raised the specter of Sherman Act violations in our contiguous marketplace."
He added: "Despite diligent efforts on the part of plaintiffs' counsel and nearly unfettered access to defendants' records, plaintiffs are before the court with nothing more than speculation as to the who, what, when, where, and how of the communications that allegedly facilitated the parallel price increases. Nothing scandalous or improper has been discovered within our borders, and no evidence permits a reasonable inference of a price-fixing agreement."
The original four defendants controlled more than 80 percent of the $16 billion U.S. chocolate market in 2006, and half the world market, according to one 2007 class action filed in New Jersey.
Conner's ruling makes no mention of indirect purchasers, a portion of the action in which he reopened discovery