Fertilizer Markets and Finance

Potash Corp. of Saskatchewan Inc. and six other producers of the fertilizer chemical won a U.S. appeals court ruling rejecting purchaser claims they conspired to fix prices in violation of federal antitrust laws.

The buyers sued in 2008, claiming violations of the U.S. Foreign Trade Antitrust Improvements Act, which can extend the reach of American antitrust law to foreign anticompetitive conduct that affects U.S. imports.

The Chicago-based court today ruled that Minn-Chem Inc. and its co-plaintiffs failed to state a plausible “direct, substantial and reasonably foreseeable,” link between the allegedly anti-competitive activity of the producers — all of whose mining operations are based in Canada, Russia or Belarus - - and the U.S. market for their product.

“All of the anticompetitive conduct identified in the complaint is alleged to have occurred outside the United States,” U.S. Circuit Judge Diane Sykes wrote in the court’s unanimous 27-page decision.

Also named as defendants in the case were Calgary-based Agrium Inc., Plymouth, Minnesota-based Mosaic Co. (MOS), as well as Russian and Belarussian companies. As of 2008, they accounted for about 71 percent of the world’s supply of potash, according to today’s court ruling.

600 Percent

The direct and indirect purchasers had claimed U.S. potash prices climbed 600 percent from 2003 to 2008, an increase they attributed to an agreement among the producers to limit production and raise prices, as they allegedly did in China, India and Brazil, the court said.

“We are evaluating the opinion and making decisions about what we will be doing,” San Francisco attorney Bruce Simon, who argued the case for the purchasers on June 3, said today in a phone interview. He declined to comment further.

“We believe the court made the right ruling,” Rob Litt, a spokesman for Mosaic, said in a phone interview.

“We’re certainly very pleased with the decision of the court,” said Bill Johnson, a spokesman for Saskatoon-based Potash Corp.

Today’s ruling reversed a November 2009 decision by U.S. District Judge Ruben Castillo in Chicago. The appeals court today returned the antitrust case to Castillo with instructions that he dismiss it.

Joining Sykes in the ruling was U.S. Circuit Judge Daniel Manion. U.S. Circuit Judge Terence Evans, who was part of the three-judge panel that heard the attorneys’ arguments in July, died a month later without taking part in the decision.

The case is Minn-Chem Inc. v. Agrium Inc. (AGU), 10-1712, U.S. U.S. Court of Appeals for the Seventh Circuit (Chicago).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net