The opinion of the court was delivered by: MICHAEL MIHM, District Judge
ORDER ON PRELIMINARY APPROVAL OF
SETTLEMENT WITH DEFENDANTS AMERICAN MAIZE-PRODUCTS
COMPANY AND CARGILL, INCORPORATED
Having considered class Plaintiffs' Motion for an Order Preliminarily
Approving the Settlement with Defendants American Maize Products
Company ("Maize") and Cargill, Incorporated ("Cargill"), the papers filed
in support, and the arguments of counsel presented during the telephonic
hearing on 3/11/04.
THE COURT HEREBY FINDS THAT:
1. The proposed settlement with Maize and Cargill falls within the
range for possible approval by the Court and warrants notice apprising
class members of the settlement and the setting of procedures for a
hearing for final approval under Rule 23(e).
2. The forms of mail and publication notice, in the form of Exhibits A
and B attached to the accompanying motion, respectively, satisfy the
requirements of due process and are hereby approved as to form.
THEREFORE, IT IS HEREBY ORDERED that the settlement agreement between
class plaintiffs and defendants Maize and Cargill is preliminarily
approved and the notices attached on Exhibit A and B are hereby approved
as to form.
IT IS FURTHER ORDERED that the schedule for notice to the members of
the class on the settlement shall be as follows:
1. Notice in the form attached as Exhibit A shall
be mailed to all class members identified on
the customer lists provided by defendants on or
before March 25, 2004;
2. Notice in the form attached as Exhibit B shall be
published twice in the national edition of The Wall
Street Journal and USA Today on or before April 5,
3. A hearing before the Court on final approval of
the settlement shall take place on May 19, 2004
at 3:00 p.m. ("Hearing Date");
4. Any motions and memoranda for final approval of
the settlement shall be filed on or before May
5. Any comments or objections to the settlement,
or requests to speak at the fairness hearing
must be received by the Clerk on or before May
TO: DIRECT PURCHASERS OF HIGH FRUCTOSE CORN SYRUP
If you bought high fructose corn syrup in the United States during
the period July 21, 1991 through June 30, 1995 directly from one or more
of the five defendant companies mentioned below.
THIS IS A NOTICE OF PARTIAL SETTLEMENT
A federal court authorized this notice. This is not a solicitation
from a lawyer.
The five defendants initially named in this
litigation were Archer Daniels Midland Company
("ADM"), A.E. Staley Manufacturing Company
("Staley"), Cargill, Incorporated ("Cargill"), CPC
International, Inc. ("CPC"), and American Maize
Products Company ("Maize"). The allegations are that
the defendants conspired to fix prices and allocate
volumes of high fructose corn syrup in the United
States in violation of Sherman Act § 1.
You were previously notified in July 1996 of the
existence of this class action, the nature of the
class' claims, and a partial settlement with
defendant CPC. You were then given the opportunity
to exclude yourself from the Class certified by the
Court on May 9, 1996. If you previously excluded
yourself from the Class, you are not a member of the
A partial settlement has now been reached with two
additional defendants, Maize and Cargill. The
settlement, if approved by the Court, will provide
$24,000,000 to pay claims of direct purchasers of
high fructose corn syrup in the United States during
the period July 21, 1991 through June 30, 1995 and
reasonable expenses of litigation and attorneys'
The litigation is continuing against ADM and
Staley, and the Court has set a trial date of
September 7, 2004.
Your legal rights are affected whether you act or
don't act. Read this notice carefully.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS PARTIAL SETTLEMENT:
COMMENT OR OBJECT Write to the Court about the settlement.
GO TO A HEARING Ask to speak in Court about the fairness of the settlement.
DO NOTHING If you previously did not exclude yourself from the Class, you
are a member of the Class and need do nothing at this time.
Since this is a partial settlement, no distribution of the
proceeds will be made at this time. At some time in the
future, a claim form will be disseminated which you will need
to complete and return to receive your share of the settlement
proceeds. As stated in the previous notice, you should
maintain all of your records of purchases of high fructose corn
syrup from any of the defendants for the period July 21, 1991
through June 30, 1995.
These rights and options and the deadlines to
exercise them are explained in this notice.
The Court in charge of this case still has to decide
whether to approve the settlement.
SUMMARY OF PARTIAL SETTLEMENT
Current Status of the Litigation
This litigation was commenced in 1995. On May 9, 1996, the Court
certified the case to proceed as a class action. In July 1996, via mail
and publication the Court notified the Class of the certification of the
class and the nature of the class' claims, afforded eligible persons the
opportunity to exclude themselves from the Class, and reported that a
partial settlement had been reached with defendant CPC for approximately
Between 1996 and 2001, the plaintiffs and the remaining parties engaged
in extensive discovery including more than 100 depositions of the
defendants' relevant executives and employees (both current and former),
the class plaintiffs' representatives, absent class members'
representatives, and other relevant third parties. In addition, both the
plaintiffs and defendants engaged in extensive document discovery and
hundreds of thousands of pages of documents were produced. The plaintiffs
and defendants also utilized the services of expert witnesses to analyze
the high fructose corn syrup market, and these experts produced reports
and gave depositions.
In April 2001, defendants moved for summary judgment seeking dismissal
of class plaintiffs' claims. On August 23, 2001, the Court granted the
motion for summary judgment dismissing plaintiffs' claims. Class
plaintiffs appealed to the United States Court of Appeals for the Seventh
Circuit ("Seventh Circuit"). The Seventh Circuit reversed the grant
of summary judgment in June 2002. reinstated plaintiffs' claims, and
remanded the case to this court for trial.
After the Seventh Circuit decision, the parties continued their
preparations for trial. At the Seventh Circuit's suggestion, the court
appointed an economic expert to evaluate the parties' experts' analyses.
The court appointed expert filed a report on January 6, 2004 and was
deposed on February 17 and 18, 2004. Among other things, the parties
filed more than 50 so called in Hmine motions seeking to preclude
certain evidence at trial. During the week of November 17, 2003. the
Court held a hearing on these motions. The Court found that a large
amount of evidence that class plaintiffs planned to use at trial was
admissible against ADM but not against Maize and Cargill. The Court also
issued two additional rulings. First, the Court denied ADM's motion to
compel the testimony of two former ADM executives, Terrance Wilson and
Michael D. Andreas, who had previously invoked their Fifth Amendment
privilege. Second, the Court denied Staley's, Cargill's and Maize's motion
to hold a separate trial from ADM. The district court certified these
decisions for immediate appeal to the Seventh Circuit. At the time this
settlement was entered into, the Seventh Circuit had not yet ruled
whether it would hear these appeals. Since then, the Seventh Circuit
declined to hear the appeal concerning the testimony of the former ADM
A proposed settlement has now been reached with defendants Maize and
Cargill for $24,000,000, which has been paid into escrow and is earning
interest. This proposed settlement, when added with the settlement with
CPC, would bring the total settlements in this case to over $31,000,000.
These are partial settlements. A portion of the proceeds from the CPC
settlement has been used with Court approval to pay necessary expenses of
The litigation against ADM and Staley is proceeding, and the Court has
set a trial date of September 7, 2004.
Further information regarding the Action and this Notice may be
obtained by contacting
Reasons for the Settlement
Plaintiffs' counsel believe that the proposed partial settlement is a
good recovery and is in the best interests of the Class. Because of the
risks associated with continuing to litigate and proceeding to trial with
Cargill and Maize, there was a danger that plaintiffs would not have
prevailed on any of their claims, in which case the Class would receive no
further recovery. For example, as a result of the tentative settlement
Maize's and Cargill's appeal regarding a separate trial from ADM was
dismissed. If that appeal had been successful and a separate trial was
held without ADM, according to the Court's rulings, much evidence
admitted against ADM would not be admissible in the trial with Maize and
Therefore, the parties agreed to the partial settlement to help to
ensure a fair and reasonable resolution to this matter and to provide
further monetary benefits to the members of the Class recognizing the
existence of complex, contested issues of law and fact; the risks
inherent in such complex litigation; the likelihood that in the absence
of settlement future proceedings could take additional years and be
extremely costly; and the magnitude of the benefits resulting from the