W. Joseph Bruckner

In late October 2007, as American buyers of potash later alleged, the Russian producer Silvinit announced that a sinkhole might force it to suspend shipments from one of its mines. Within a day, Potash Corporation of Saskatchewan (PCS), Uralkali, Agrium and the Belarusian Potash Company announced that they too would suspend sales, and the announcement of the suspension by PCS, a Canadian company, came from Uralkali, a Russian one. At the International Fertilizer Industry Association’s conference in Vancouver that month, PCS’s president and chief executive, William Doyle, was asked what the Silvinit shutdown would do to prices. His answer was to “hold on to your hat because it would have a major impact on pricing.” About twelve days after its announcement, Silvinit said it would resume shipments, and the others followed.

W. Joseph Bruckner of Lockridge Grindal Nauen in Minneapolis signed the complaint that put those twelve days before the federal court in Chicago in April 2009, for American businesses that had bought potash directly from the producers. The complaint set the suspensions beside a 2005 visit by PCS, Canpotex and Mosaic executives to Uralkali, production cuts that matched one another, and price increases that moved from Brazil, India and China into the United States. Two federal courts held that the pattern stated a claim that American antitrust law could reach.

On June 27, 2012, the United States Court of Appeals for the Seventh Circuit, sitting en banc, held that American buyers of potash could pursue a Sherman Act case against the producers they accused of running a global cartel in the fertilizer mineral. The buyers alleged that producers with mines in Canada, Russia and Belarus, together controlling about 71 percent of world supply, had operated as a cartel—restricting output, coordinating price increases and driving potash prices up more than 600 percent from 2003 to 2008. Writing for a unanimous court, Judge Diane P. Wood summarized the claim: foreign sellers had allegedly created a cartel and “took steps outside the United States to drive the price up of a product that is wanted in the United States,” then sold that product to American customers.

The decision, Minn-Chem, Inc. v. Agrium Inc., answered two questions under the Foreign Trade Antitrust Improvements Act of 1982, the statute that limits the Sherman Act’s reach over conduct involving commerce with foreign nations. The court held that the statute’s requirements go to the merits of a claim rather than to the court’s jurisdiction, overruling its own en banc decision of 2003 in United Phosphorus, Ltd. v. Angus Chemical Co. It also adopted the Justice Department’s reading of the statute’s demand for a “direct” effect on American commerce: the word means only “a reasonably proximate causal nexus.” Under both rulings the buyers’ complaint went forward, and the court affirmed Judge Ruben Castillo of the Northern District of Illinois, who had refused to dismiss it.

Bruckner’s firm and Pearson Simon Warshaw & Penny of San Francisco led the direct purchaser class as co-lead counsel. “Markets are increasingly global, and today’s decision helps ensure that U.S. antitrust law and U.S. courts will protect U.S. purchasers who are targeted and injured by global cartels,” Bruckner said in a statement for the plaintiffs the day the court ruled.

Buyers in Sanborn, Stanberry and Thomasville

Potash buyers filed the first complaints against the producers on September 11, 2008. One came from Minn-Chem, Inc., a Minnesota corporation based in Sanborn that made fertilizer for farmers and cooperatives. Richard A. Lockridge, Bruckner’s partner, filed its suit in the federal court in Minneapolis and said the company had stopped manufacturing about a year earlier, in part because of high potash prices, which had more than quadrupled over the previous year. He acknowledged that he had no smoking gun proving price-fixing, and he said the companies “did engage in an unusually and extensive amount of cooperative activities” that suggested “an implicit gentleman’s agreement not to compete on the basis of price.” The same day Pearson Simon filed suit in Chicago for Gage’s Fertilizer & Grain. By December the cases had been gathered before Judge Castillo in Chicago as In re Potash Antitrust Litigation (No. II), MDL No. 1996, which held two class actions, one for buyers who had purchased potash directly from the producers and one for indirect purchasers.

On April 3, 2009, the direct purchasers filed an amended consolidated complaint with six named plaintiffs: Gage’s Fertilizer & Grain, Inc., of Stanberry, Missouri; Kraft Chemical Company of Melrose Park, Illinois; Minn-Chem; Shannon D. Flinn of Milton, Florida; Westside Forestry Services, Inc., which did business as Signature Lawn Care in Novi, Michigan; and Thomasville Feed & Seed, Inc., of Thomasville, Alabama. Each had bought potash directly from one or more of the producers. They sued on behalf of all persons and entities that had bought potash in the United States directly from a defendant since July 1, 2003. Bruckner signed the complaint for Lockridge Grindal Nauen, whose lawyers on the signature page also included Richard A. Lockridge, Heidi M. Silton and Matthew R. Salzwedel. Bruce L. Simon was listed first for Pearson Simon, and Steven A. Hart of Segal McCambridge Singer & Mahoney in Chicago was liaison counsel.

The buyers described potash as mineral and chemical salts that contain potassium, mined from natural ore deposits and used mainly as an agricultural fertilizer, because soluble potassium is one of the three primary nutrients plants need to grow and mature. It also goes into metal plating, glass, ceramics, soap and animal feed supplements. As a fertilizer, they alleged, it has no cost-effective substitute. They alleged that the United States is one of the two largest consumers of potash in the world and that about 85 percent of the potash used there comes from overseas; in 2008 alone, 5.3 million tons were imported.

Prices Set First in Brazil, India and China

The buyers alleged a market with few sellers. As of 2008, three producers with mines in Canada—PCS, Agrium and Mosaic, which is based in Plymouth, Minnesota—and three in the former Soviet Union—Uralkali, Belaruskali and Silvinit—accounted for about 71 percent of the potash market. The buyers quoted one analyst’s observation that “the global trade in potash is even more concentrated than OPEC for oil,” and they quoted PCS’s chief financial officer, Wayne Brownlee: “The best thing about the potash business is it’s an oligopoly; there are not a lot of producers.”

Two joint ventures sold the producers’ potash abroad. PCS, Agrium and Mosaic were equal shareholders in Canpotex, and the buyers alleged that each had agreed not to make offshore sales on its own, except sales into the United States. Canpotex divided its sales among the three by production capacity; in 2007 PCS supplied 55 percent of its requirements, Mosaic 37.5 percent and Agrium the balance. Uralkali and Belaruskali formed the Belarusian Potash Company, known as BPC, in 2005 to market their potash jointly throughout the world, including in the United States, and with their combined supplies BPC accounted for 34 percent of world potash exports.

The buyers also pointed to meetings among competing executives. On October 11, 2005, they alleged, senior executives of PCS, Canpotex and Mosaic, among them William Doyle, visited Uralkali and met with its general director, Vladislov Baumgertner, and with representatives of Belaruskali and Silvinit; they discussed, among other things, what could be deemed “highly sensitive production plans” of at least one of the world’s largest potash suppliers. Shortly afterward, in November and December 2005, PCS and Mosaic announced production shutdowns at certain mines, BPC reduced production and International Potash Company shut down mines. In July 2006 a Uralkali delegation visited Mosaic in Canada, learned how the company was managed and toured its potash mining operations; the visitors noted the “friendly attitude of the hosts.” Mosaic’s executive vice president, James Thompson, took part in the visit, and the delegation reported, the buyers alleged, that “[w]e were shown everything we wanted to see.”

Production cuts, the buyers alleged, came in matching patterns. As demand fell in the second half of 2005, PCS shut two of its mines from December 11, 2005, to January 7, 2006, and its Rocanville mine in January and early February 2006, removing 1.34 million tons of potash from the market in all, and Mosaic made temporary cuts of its own. When Brazilian demand dropped 20.9 percent in 2005, the producers from the former Soviet Union cut their combined exports to Brazil by 20.9 percent, and the Canadian producers cut theirs by almost exactly the same percentage. In an April 2006 interview, the buyers alleged, Uralkali’s majority owner, Dmitry Rybolovlev, said, “[w]e won’t start a universal war in order to reduce prices.” In December 2008, with potash selling for more than $1,000 a ton, Brownlee praised the Belarusian producers for their “tremendous discipline” in managing supply and said, “you’re just seeing a lot of good discipline by all the producers right now in the marketplace.”

The buyers traced the price increases announcement by announcement. In March 2003 IMC Global, Mosaic’s predecessor, raised its price for standard red muriate of potash, free on board at the Saskatchewan mine, from $81 to $89 a ton. On July 8, 2008, PCS announced that its prices to the United States would rise by $250 a ton, 48 percent over the previous price. For the fourth quarter of 2008 Canpotex announced a spot price of $1,000 a ton, and BPC contracted to supply 30,000 tons to American buyers at $1,000 a ton. The buyers alleged that the increases followed a sequence: the producers negotiated term contracts with buyers in Brazil, India and China first and then used those prices to set prices in other major markets, including the United States, where PCS, Mosaic, Agrium and BPC made the vast majority of sales. The buyers quoted an analyst: “[t]he barriers that we have seen in the past between domestic and international prices have just fallen down.”

Out of Neutral Territory

The producers moved to dismiss the complaints, and Judge Castillo ruled on November 3, 2009, in a 75-page opinion. The producers had argued that their output decisions were made “in response to industry developments,” among them “substantial declines in global demand.” Under the Supreme Court’s 2007 decision in Bell Atlantic Corp. v. Twombly, parallel conduct by competitors, even when each knows what the others are doing, must come in a setting that suggests an agreement before a conspiracy claim can go forward. Judge Castillo read the buyers’ allegations together. The buyers had argued that restricting supply was a “radical change” in the producers’ behavior, and he wrote that “[s]uch a change in behavior could support an inference of conspiracy.”

He weighed the October 2005 visit to Uralkali, the shutdowns PCS and Mosaic announced in November and December, and the joint ventures and overlapping interests that, the plaintiffs alleged, gave the producers the opportunity to conspire and a financial incentive to do so. On the sinkhole episode he held that the allegations that the suspensions all took place over the same twelve-day period, and that Uralkali, PCS’s “purported competitor,” had announced PCS’s suspension, were “more suggestive of concerted action than ‘independent business judgment.’” His conclusion followed: “Reading these allegations as a whole, the Court finds that Plaintiffs have satisfied the Twombly standard; the allegations propel Defendants’ conduct out of ‘neutral territory’ to plausibly suggest entitlement to relief.”

Jurisdiction or Merits

The FTAIA provides that the Sherman Act does not apply to conduct involving trade or commerce with foreign nations, other than import trade or import commerce, unless the conduct has a direct, substantial and reasonably foreseeable effect on domestic or import commerce. The producers also argued that the statute left the district court without jurisdiction over the buyers’ claims.

In the same opinion Judge Castillo refused to dismiss the buyers’ Sherman Act claim on that ground. He held that the FTAIA’s import-commerce exclusion applied: the producers imported potash into the United States, and the connection between the alleged global conspiracy and those imports was sufficiently tight. The buyers, he wrote, had “pleaded enough to fall under the FTAIA’s parenthetical ‘import trade or import commerce’ exclusion.”

He then certified his ruling for an immediate appeal under 28 U.S.C. § 1292(b), and in January 2010 the producers petitioned the Seventh Circuit for permission to appeal. The court of appeals agreed that the issues were important, accepted the appeal and later decided to rehear the case en banc. On January 12, 2012, the Justice Department’s Antitrust Division and the Federal Trade Commission filed a brief supporting neither side. A “direct” effect, the agencies argued, is best read as a “reasonably proximate” one, and the import-commerce exclusion does not require that defendants subjectively intend to restrain U.S. imports. As enforcers of the antitrust laws, they told the court, they had a strong interest in the statute’s correct interpretation. The full court heard argument on February 8, 2012. Bruce L. Simon of Pearson Simon argued for the buyers, and Charles A. Rothfeld of Mayer Brown for the producers. Simon later recalled a packed courtroom of more than 250 people, and preparation that had included two moot courts.

“A Reasonably Proximate Causal Nexus”

Judge Wood began with the court’s power to hear the case. “We hold first that the FTAIA’s criteria relate to the merits of a claim, and not to the subject-matter jurisdiction of the court,” she wrote. The full court overruled United Phosphorus, relying on the Supreme Court’s 2010 decision in Morrison v. National Australia Bank Ltd., which treated a statute’s limits on its reach abroad as part of the question of what conduct the statute prohibits, a merits question, and on Arbaugh v. Y&H Corp. In the Seventh Circuit, a defendant that wants to contest an antitrust claim involving foreign activity must now do so under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim, rather than under Rule 12(b)(1), for lack of jurisdiction.

The court then turned to the transactions the buyers had described. “In our view, much of the Complaint alleges straightforward import transactions,” Judge Wood wrote, and import commerce lies outside the FTAIA’s special test. For those sales the standard of Hartford Fire Insurance Co. v. California applied, under which the plaintiffs had to allege conduct that was meant to produce, and did produce, some substantial effect in the United States.

For the conduct that did not involve imports, the court applied the FTAIA’s requirement of a direct, substantial and reasonably foreseeable effect, and it had to decide what “direct” meant. The Ninth Circuit had borrowed a definition from the Foreign Sovereign Immunities Act, under which an effect is direct if it follows as an immediate consequence of the defendant’s activity. “In our view, the Ninth Circuit jumped too quickly to the assumption that the FSIA and the FTAIA use the word direct in the same way,” Judge Wood wrote. The court adopted the Justice Department’s approach instead, under which “direct” means only “a reasonably proximate causal nexus”; the word, Judge Wood wrote, “addresses the classic concern about remoteness.” Judge Wood traced that concern to Judge Learned Hand’s statement in Alcoa: “[w]e should not impute to Congress an intent to punish all whom its courts can catch, for conduct which has no consequences within the United States.”

On that standard the buyers’ allegations were sufficient. The producers, the buyers alleged, negotiated prices first in Brazil, India and China and then used those prices for sales to customers in the United States. Judge Wood gave an example from the complaint: “in May 2004, the cartel arranged for prices to increase by $20 per ton for some foreign customers; shortly thereafter, prices in the United States went up by precisely the same amount.” The court treated the supply restrictions abroad as a direct, that is, proximate, cause of the later price increases in the United States. The effect, as the buyers alleged it, was substantial: 5.3 million tons of potash imported in 2008 alone, and prices up more than 600 percent from 2003 to 2008. It was also foreseeable. “It is objectively foreseeable that an international cartel with a grip on 71% of the world’s supply of a homogeneous commodity will charge supracompetitive prices,” Judge Wood wrote, and absent evidence that arbitrage was impossible, those prices, net of shipping costs, would be uniform throughout the world.

The court turned aside the producers’ remaining objections. Their contention that the alleged cartel had not worked did not defeat the complaint, Judge Wood wrote, and the court was “satisfied that the allegations suffice, at this stage, to support a plausible story of concerted action.” Other theories the producers might press “may all be important to explore as the case goes forward, but they do not provide a reason to throw out the case.” She contrasted the buyers’ case with one in which action abroad “filters through many layers and finally causes a few ripples in the United States.” Here the foreign sellers had allegedly raised the price of a product wanted in the United States and then sold it to American customers.

The court also addressed the reach of American law into other nations’ markets. Courts have long treated the application of the antitrust laws to foreign conduct as reasonable, and consistent with prescriptive comity, when it redresses domestic antitrust injury that the foreign conduct caused, the court noted. And the countries where the potash was mined, the court reasoned, had little reason to stop the alleged cartel themselves. “Canada and Russia, here (just like California in Parker), would logically be pleased to reap economic rents from other countries,” Judge Wood wrote; what they lost through higher prices for the potash in their own fertilizers was more than made up by the cartel price their exporters collected. The payment of overcharges by American customers was objectively foreseeable, the court concluded, and the amount of commerce was substantial. It affirmed Judge Castillo’s order.

The next day Christopher Sagers, a law professor at Cleveland-Marshall College of Law, wrote that he read the decision as being as much about how a conspiracy must be pleaded after Twombly and Iqbal as about the FTAIA.

U.S. Purchasers and Global Cartels

Bruckner came to the potash case with two decades of plaintiffs’ antitrust and complex litigation behind him. A 1978 graduate of the University of Nebraska, he graduated cum laude in 1982 from Creighton University School of Law, where he was editor-in-chief of the Creighton Law Review, and he clerked for Donald P. Lay, then Chief Judge of the United States Court of Appeals for the Eighth Circuit. A longtime partner at Lockridge Grindal Nauen, he had thirty years of experience representing plaintiffs in antitrust class actions and other complex litigation when his firm sought leadership of a pork price-fixing case in 2018. He has served as co-lead counsel in class actions over monosodium glutamate, urethane, flat glass and pressure-sensitive labelstock in federal courts in Minnesota, Kansas and Pennsylvania.

Potash was one of the two global-cartel cases the American Antitrust Institute cited when it inducted Bruckner into its Private Antitrust Enforcement Hall of Fame in 2025. The other was the freight forwarders litigation in the Eastern District of New York, Precision Associates, Inc. v. Panalpina World Transport (Holding) Ltd., in which his firm served as co-lead counsel for a class of direct purchasers who alleged that global freight forwarders conspired to fix, inflate and maintain prices and surcharges for U.S. freight forwarding services. “I have dedicated my career to make markets open and fair,” Bruckner said when the institute announced the honor.

He has written and spoken on private enforcement and foreign cartels. He contributed to the International Handbook on Private Enforcement of Competition Law in 2010 and to Private Enforcement of Antitrust Law in the United States, published by Edward Elgar in 2012, and he spoke on the Foreign Trade Antitrust Improvements Act at an American Bar Association program in 2014. He is a past president of the Committee to Support the Antitrust Laws and a past chair of the Minnesota State Bar Association’s antitrust law section, and he serves on the American Antitrust Institute’s board of directors and has served on its advisory board. He has also been among the co-lead counsel in price-fixing class actions over broiler chicken, pork and beef.

$90 Million for the Direct Purchaser Class

After the en banc ruling the case returned to Judge Castillo, and in January 2013 it settled. Mosaic entered into agreements on January 30, 2013, to settle the potash cases for an aggregate of $43.8 million; after Judge Castillo granted preliminary approval that day, Mosaic funded its settlement, subject to final court approval, and potential class members had until May 22, 2013, to opt out. Mosaic said it chose to settle “to avoid the significant costs, burden and distraction of protracted litigation,” and it did not admit any wrongdoing.

PCS agreed the same day to pay $43.75 million, and Agrium $10 million, to settle both the direct and indirect purchaser cases. Of the three North American producers’ settlements, $80 million was for the direct purchaser class and $17.5 million for the indirect purchasers. The direct purchasers had also settled with Uralkali and Silvinit, which had merged in 2011, for $10 million. All three North American companies denied wrongdoing.

For the direct purchaser class—the persons and businesses in the United States that bought potash from the producers, represented since the 2009 complaint by Bruckner’s firm and Pearson Simon—the settlements came to $90 million in 2013. One of the buyers’ lawyers estimated the class at 3,000 to 5,000 potash buyers, from farmers to wholesalers. On June 12, 2013, after a fairness hearing, the court in Chicago gave final approval to the $80 million in settlements with PCS, Mosaic and Agrium.

The producers had asked the Supreme Court to review the en banc decision, and the settlement was negotiated before the Court acted on the petition. On July 22, 2013, the Court dismissed the petition under its Rule 46.1, and the Seventh Circuit’s decision stood. In June 2014 the Second Circuit, in an opinion by Chief Judge Katzmann in Lotes Co. v. Hon Hai Precision Industry Co., also held that the FTAIA’s requirements go to the merits rather than to jurisdiction, and it adopted the Seventh Circuit’s test for a “direct” effect, a reasonably proximate causal nexus.

In September 2018, in a motion Bruckner signed asking the federal court in Minnesota to appoint them to lead the direct purchasers’ case over pork prices, the two firms told the court that they had investigated and prosecuted the potash case without the benefit of an investigation by the U.S. Department of Justice or other antitrust regulators.