CHEMICAL & ENGINEERING
NEWS
MAY
11,
1964
Trustbusters Shift to Phosphate Fertilizers Indictment alleging price fixing in fertilizer follows urethane foam suits Antitrust attention last week had shifted from urethane foams to fertilizers, following indictment of five phosphate fertilizer companies by a federal grand jury in Los Angeles. The grand jury indicted the five firms for conspiring to eliminate price competition in the sale of diy phosphatic fertilizers in the 11 western states. The indictment is the third attack on chemical and related industries by the Department of Justice in recent weeks. In mid-April, the Justice Department filed a civil complaint designed to make Monsanto and Farbenfabriken Bayer divest themselves of Mobay Chemical (C&EN, April 20,
page 23). It filed another complaint to block Allied Chemical's bid to acquire General Foam Corp. (C&EN, April 20, page 19). Unlike these civil actions, the Los Angeles indictment charges criminal offenses under Section 1 of the Sherman Act. The bill names five companies as defendants: J. R. Simplot Co., Boise, Idaho; Cominco Products, Inc., Spokane, Wash.; Balfour-Guthrie & Co., Ltd., and California Chemical Co., both in San Francisco; and Western Phosphates, Inc., Salt Lake City, Utah. Named as co-conspirators, but not indicted, are Anaconda Co., New York City, and Northwest Nitro Chem-
Dismissal Refused in Trade Secrets Case
to have become manager of plant technical services at a titanium dioxide plant to be built. Within a few days after Dr. Hirsch resigned, the Wilmington court, at Du Pont's request, ordered Dr. Hirsch not to reveal to American Potash any confidential information on the Du Pont process (C&EN, Dec. 17, 1962, page 24). The order also restrains American Potash from seeking or accepting such information. Also, Dr. Hirsch was ordered not to do any work for American Potash in connection with a chloride process. The order remains in effect. In his ruling last week, Chancellor Seitz stated: "Among the substantial and conflicting policies at play in this situation are the protection of employers' rights in their trade secrets on the one hand, versus the right of the individual to exploit his talents, use matters of general knowledge, and pursue his calling without undue hindrance from a prior employer on the other. . . . What accommodation, if any, is to be made must await the decision after trial."
Titanium dioxide battle may go to trial Chancellor Collins J. Seitz last week denied a motion for summary judgment in Du Pont's suit to prevent Dr. Donald E. Hirsch from revealing to American Potash any trade secrets involved in Du Pont's chloride process for making titanium dioxide. In chancery court in Wilmington, Del., Chancellor Seitz ruled, in effect, that the case could not be dismissed for lack of legal merit. American Potash had asked for a summary judgment to that effect. Lawyers on both sides expect that the next step will be trial. It is not likely to begin before fall. Chemical engineer Hirsch worked for Du Pont from 1950 until November 1962, when he resigned to join American Potash. During six of his 12 years with Du Pont, Dr. Hirsch was assigned to work on the chloride process. At American Potash, he was
ical Sales, Ltd., Alberta, Can. No individuals were named. The indictment charges the five companies, the co-conspirators, and others "to the grand jurors unknown'* with agreeing, conspiring, and taking concerted action to eliminate price competition in dry phosphatic fertilizers in the 11 western states from "at least" 1957 through "at least" 1961. The indictment specifies five points on which the companies allegedly agreed. These are: • To allow a distributor discount only to purchasers meeting certain minimum qualifications. • To establish and maintain a uniform differential between the prices of bagged and bulk materials. • To discontinue trucking allowances to purchasers who provide their own transportation from plants. • To apply uniform credit terms. The indictment charges also that amounts and periods of seasonal discounts were agreed upon from time to time. These agreements have restricted price competition among the defendants, says the indictment. Thus, fanners, growers, and others allegedly have bought the products on terms and conditions restricted by agreements among the defendants. None of the companies would comment on the matter early last week. Stauffer Chemical, parent of Western Phosphates, issued a statement pointing out that it had just last month purchased an outstanding 50% interest in Western Phosphates to become sole owner (C&EN, May 4, page 29). Before then, the statement says, "Western Phosphates . . . was an independent company in which Stauffer Chemical owned a 50% equity." Two of the companies, J. R. Simplot Co. and Western Phosphates, are basic producers of phosphate fertilizers or ingredients. Both produce phosphates from mining operations, Simplot in Idaho and Western Phosphates in Utah. Cominco Products is a MAY
11, 1 9 6 4
C&EN
23
wholly owned subsidiary of Consolidated Mining & Smelting Co., Ltd., of Canada. It began marketing the Canadian company's Elephant Brand fertilizers in the U.S. in 1956. Balfour-Guthrie Co., Ltd., was U.S. sales agent for Cominco until Jan. 1 of this year, when Cominco Products took over. Balfour-Guthrie is not now involved in the phosphate business. California Chemical Co. uses phosphate materials in a line of complex fertilizers it produces at Richmond, Calif., Kennewick, Wash., and Fort Madison, Iowa. Violation of Section 1 of the Sherman Act is a misdemeanor. Conviction carries a fine up to $50,000, or imprisonment not to exceed one year, or both. Others. The five western companies are not the only ones in the phosphate industry under antitrust guns. In November 1963, a New York grand jury returned two indictments against four fertilizer firms, an export firm, and three executives of two of the firms for price fixing and allocation of export sales (C&EN, Nov. 18, 1963, page 26). Those indicted were W. R. Grace, International Minerals & Chemical, Tennessee Corp. (now owned by Cities Service), VirginiaCarolina (now the V-C Chemical Co. division of Socony-Mobil), and the export firm, International Ore & Fertilizer (now owned by Occidental Petroleum). The executives under indictment are Hugh S. Ten Eyck and Ronald P. Stanton, both of International Ore, and Edward A. Shelton of Tennessee Corp. These suits cover export of triple superphosphate to South Korea and of phosphate rock to Japan, Europe, and other areas. Last February, the Justice Department followed with two civil suits in U.S. District Court in Tampa, Fla. (C&EN, Feb. 24, page 24). One charges the same export company and seven fertilizer producers with conspiracy to eliminate price competition in phosphate rock abroad. Named in this case, in addition to International Ore & Fertilizer, are American Agricultural Chemical and its parent firm, Continental Oil; V-C Chemical and its parent, Socony Mobil; American Cyanamid; Armour & Co.; Swift & Co.; Smith-Douglass Co.; and W. R. Grace. A second charges the same companies and International Minerals & Chemical with fixing prices for domestic sales of phosphate rock. All of these suits are still pending. 24
C&EN
MAY
11,
1964
Clear Polyvinyl Chloride Bottles Ready for Market A clear, polyvinyl chloride bottle drops from a blow-molding machine at Diamond Alkali's Painesville, Ohio, lab. First large-scale production will begin this year. Makers of household chemicals will test market clear bottles made from Diamond's PVC powder by Hedwin Corp. and creative packaging this summer.
Drug Firms Win Suit On Generic Labeling A U.S. district court judge in Wilmington, Del., has ruled that regulations requiring the generic name of a prescription drug to appear at every mention of the trade name on labels and advertising are inconsistent with the Federal Food, Drug, and Cosmetic Act. The ruling was issued by Chief Judge Caleb M. Wright of the U.S. District Court for the District of Delaware. It was a major victory for 37 drug firms and the Pharmaceutical Manufacturers Association. They filed the suit last fall (C&EN, Sept. 16, 1963, page 39). It was filed against Anthony J. Celebrezze, Secretary of Health, Education, and Welfare, and George P. Larrick, Commissioner of Food and Drugs. The drug firms asked for a declaratory judgment and an injunction restraining the defendants from enforcing the disputed regulations. These regulations require that the established or generic name of prescription drugs be placed in conjunction with every
appearance of the proprietary or brand name on labels and advertising. The regulations were promulgated by the Commissioner of Food and Drugs in June 1963. They result from FDA's interpretations of the HarrisKefauver Drug Amendments of 1962. The applicable part of the amendments states that a drug is misbranded unless the established or generic name of the drug is printed prominently on any label or labeling material in type at least half as large as any brand or proprietary name. Chief Judge Wright ruled that FDA's interpretation is inconsistent with the amendments. "If Congress had intended that the generic name appear every time the brand name appears there would be no reason to use the word 'prominently'," he says. Judge Wright has directed the plaintiff's counsel to submit an order for court approval. According to William W. Goodrich, assistant counsel for FDA, the Government will probably appeal the case, but no decision will be made until the court makes its final judgment.
