Lawsuits over x-ray film prices move toward final settlements

June 24, 1998

X-ray film vendors chose to settle casesTwo long-running class-action lawsuits charging medical x-ray film companies with price fixing are moving toward resolution this month. A judge in a U.S. District Court in New York on June 25 is scheduled to

X-ray film vendors chose to settle cases

Two long-running class-action lawsuits charging medical x-ray film companies with price fixing are moving toward resolution this month. A judge in a U.S. District Court in New York on June 25 is scheduled to put the final wraps on the settlement of a federal lawsuit against four film companies, while another lawsuit in California is also moving toward resolution.

The lawsuits were filed in 1993 and 1994 and charge four medical x-ray film companies with antitrust violations by allegedly conspiring to fix the price of film. The companies named as defendants in the lawsuits are Eastman Kodak of Rochester, NY; Du Pont of Wilmington, DE; Fuji Medical Systems of Stamford, CT, and Miles, the former name of Agfa's Pittsburgh-based parent company in the U.S.

The California lawsuit represented physicians and hospitals that had purchased film indirectly, such as through a dealer or distributor. The federal case, filed in the U.S. District Court for the Eastern District of New York, represented companies that purchased film directly from vendors, such as dealers and distributors.

According to the complaint filed in the California lawsuit, medical x-ray film companies began conspiring to fix the price of x-ray film at least as early as 1988 and continued the practice through 1994. The complaint charged film vendors with exchanging current and future price information, agreeing on prices, and agreeing not to compete on the basis of price. The complaint did not cite any specific examples of price fixing.

Although the charges are potentially damaging, the four film vendors involved chose to settle rather than fight the claims. A spokesperson for Kodak denied that it had engaged in price-fixing, but said that the firm decided to settle due to the massive resources required to comply with the plaintiff's investigation.

"We feel confident that there is no evidence to support these allegations," said Kodak spokesperson Dawn Beck. "Each of the other companies agreed to settle, and as a result we chose not to incur the substantial litigation costs that would have been required to continue defending the suit."

Sterling, which inherited Du Pont's film business, is not a party to the litigation, according to spokesperson Jayne Seebach. Seebach declined to state why the company is not involved in the suit, but it's likely that Du Pont assumed responsibility for the lawsuits when it spun Sterling off as a separate company in 1996.

On May 28, the San Francisco Superior Court, where the California suit was filed, granted preliminary approval to a $3.8 million settlement of the claim covering indirect purchasers of film in the state. Once the court grants final approval, anyone who purchased x-ray film in the state through an indirect source between Jan. 1, 1988, and June 15, 1994, will be eligible for a piece of the award. The plaintiff's attorneys are in the process of sending out notices to California medical practices, and expect the settlement to be paid this fall, according to Josef Cooper of Cooper and Kirkham in San Francisco, one of the law firms that represented the plaintiffs.

The federal case was settled late last year, for a much larger sum: $39.4 million. Under the terms of individual settlements negotiated with each firm, Kodak will pay $18 million, Du Pont $12.3 million, Agfa/Miles $5.2 million, and Fuji $3.9 million. A hearing on final approval of the awards is scheduled for June 25, at which point the plaintiff's attorneys will begin sending notices to members of the class. The law firms have received customer lists from the film companies identifying their customers during the class period, according to Granvil Specks of Specks Goldberg in Chicago, which represented the plaintiffs in the federal suit.