Now that executives at the world's largest vitamin makers have 'fessed up to the cheekiest price-fixing schemes since the feds crashed John D. Rockefeller's oil party, they might as well tack "Sue Me" signs to their pinstripes. Already, 27 law firms have lined up for a cut of the vitamin booty, signing up a few dozen animal feed, grain and poultry corporations -- all big vitamin buyers -- as well as retail vitamin producers. With the liability question firmly settled by the Justice Department bust, the litigation will consist of massive haggling sessions over damages.
The central question: How much would consumers and corporations have paid for the full alphabet of vitamins, including the ever popular A, C and E, if an international cartel had never rigged prices?
"The defendants will spend a lot of money on fancy economists to prove that when all is said and done prices set by the conspiracy weren't that different than if the market had been allowed to operate freely," said Kenneth Adams, a partner at Dickstein Shapiro Morin & Oshinsky, a firm suing vitamin makers on behalf of Tyson Foods Inc. "And we'll argue to the contrary."
All the way to the bank. Bulk vitamins are a $3 billion-a-year business and damage estimates floated by plaintiffs lawyers are in the low 10 figures, say, $1.5 billion. That's a lot of Flintstones chewables.
And a lot of that cash is going to wind up inside the Beltway. The case is the brainchild of David Boies, the multi-tasking partner of Washington's Boies & Schiller, and a litigator who apparently engineers the Justice antitrust case against Microsoft in his spare time. Boies got the idea from his son, also named David, whose Alabama-based firm, Bainbridge & Straus, is credited with filing the first vitamin antitrust lawsuit.
On May 17, the elder Boies hosted a summit meeting of plaintiff's attorneys at the Mayflower where he and colleagues mapped strategy and corraled a consensus from the several dozen firms scavenging for clients and readying their own suits. The Washington contingent wants this case heard in a D.C. court rather than in another jurisdiction, and it is angling for seats on the lawyer committees that the court will soon designate to oversee the litigation.
So Boies and Co. have been bringing friendly firms into the fold, hoping to create critical mass to sway the Panel on Multidistrict Litigation, the group that decides where class actions get heard. (A hearing before the panel is set for June 21.) In addition to Dickstein, firms suing the vitamin makers include Cohen, Milstein, Hausfeld & Toll as well as Stein, Mitchell & Mezines. The Springfield office of Bainbridge & Straus is also involved.
Sitting across the table, representing the drug companies when the talking starts, will be other D.C. lawyers. Defending F. Hoffman La Roche & Co. of Switzerland is Bruce Montgomery of Arnold & Porter and Scott Muller of the local office of Davis Polk & Wardwell. On the team of Rhone-Poulenc SA is George Manning and Joe Sims of Jones, Day, Reavis & Pogue. For all these firms, "vitamin fortified" is taking on a whole new meaning.
Holland & Knight is heading to the Promised Land. The rapidly growing firm, which is based in Florida but has its largest office here, will become the first foreign law firm with an outpost in Israel. Holland has entered into a strategic alliance with the Tel Aviv firm Haim Samet, Steinmetz, Haring & Co. and will open for business in June.
Holland says it's merely following the money. Accounting firms, investment banks and companies like Intel Corp. and Motorola Inc. have all flocked to Israel in the past decade, cashing in on one of the world's great high-tech hothouses.
"There are more high-tech start-ups in Israel than anywhere other than Silicon Valley," said David Goren, a Holland & Knight lawyer who will head the Isreal office. "More than 120 Israeli companies trade publicly in the U.S., more than any country except Canada. We think this is an important market."
Now, Play Nice
District Court Judge Royce Lamberth is apparently tired of playing referee at the ongoing sandbox spat that is the FBI Filegate case.
The judge is overseeing discovery in the suit, brought by the conservative legal foundation, Judicial Watch, on behalf of Republicans whose privacy was allegedly trampled when their files were obtained by the White House. Whatever the ultimate outcome, the proceedings will be remembered for the intense acrimony of the combatants, who have tangled and rhetorically clawed each other during depositions held in Judicial Watch's downtown office.
Now, Lamberth sounds fed up with the feuding. On May 17, he issued an order that any lawyer attending the second deposition of White House records manager Terry Good read the D.C. Bar Voluntary Standards for Civility in Professional Conduct. For good measure, he appended a copy of the standards to the order and demanded that all sides submit a certificate to the court clerk stating that they had actually read the document, which includes an exhortation to treat all participants in the legal process "in a civil, professional and courteous manner."
The order stemmed from a request by Good's lawyers, among them Justice Department attorney Jim Gilligan, that Lamberth personally attend the deposition, scheduled for tomorrow. Lamberth said no, opting instead to encourage the parties to get along.
But don't expect a lot of hugs when the questioning starts tomorrow. Good is now represented by Sidley & Austin's Tom Green, renowned as one of the city's more blustery table pounders.
And in a faxed response to Hearsay, Larry Klayman wrote that Lamberth's order was a fine idea, adding that "The Court is considering imposing sanctions against Terry Good and Clinton Justice Department Counsel for their conduct at his prior deposition where the Court found that their conduct was `disgraceful' in part because the deposition was `plagued by an air of forgetfulness.' "
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