Large Vitamin Purchasers to Opt Out of Settlement Offer

Quaker Oats Co., Kellogg Co., Tyson Foods Inc. and possibly other large vitamin purchasers will opt out of a proposed $1.2-billion settlement to class-action claims that major drug makers fixed prices in the market, lawyers and company officials said.

Pharmaceutical companies including Roche Holding, Rhone-Poulenc and BASF have been negotiating for months to resolve claims by their customers that they conspired to overcharge for vitamins. Roche and BASF have already agreed to pay a combined $725 million in U.S. government fines.

Quaker, the maker of Cap’n Crunch cereal and Gatorade sports drink, will pursue litigation on its own instead of agreeing to the settlement, expected to be completed in coming weeks, a spokesman said. Other companies, which have the resources to pay higher legal fees, might follow suit.

“If the eventual settlement is as advertised, I’d be surprised if the large purchasers would be satisfied with it,” said Kenneth Adams, a lawyer who represents Quaker and about 50 other large purchasers who have filed six separate complaints.

The details of the agreement are still being worked out, and Germany’s BASF, Switzerland’s Roche and France’s Rhone-Poulenc all declined to comment on the prospects for opt-outs.

After the settlement is reached, the plaintiffs will have a period during which to decide whether to accept or pursue their own lawsuits.

Tyson plans to opt out because “the damages are more than the settlement,” said James B. Blair, the company’s general counsel.

The class-action claims are close to a settlement that could be completed in “the next week or so,” said Michael Hausfeld, a lawyer for the plaintiffs in the class-action case. The total settlement will decrease as participants opt out, Hausfeld said.

The companies also are still in discussions with lawyers who brought class-action lawsuits on behalf of individual consumers in certain states, including California.