Judge Throws Out U.S. Aluminum Price-Fixing Claims

U.S. and European regulators have also examined alleged metals price fixing.

SEATTLE (Scrap Monster): A U.S. judge has dismissed antitrust litigation accusing a variety of Wall Street banks and commodity merchants of conspiring to drive up aluminum prices by reducing supply.

In decisions on Tuesday night and Wednesday, U.S. District Judge Katherine Forrest in Manhattan rejected claims brought by aluminum purchasers against several defendants including Goldman Sachs Group Inc, JPMorgan Chase & Co, the mining company Glencore Plc, and Hong Kong Exchanges and Clearing Ltd, which owns the London Metal Exchange.

Forrest said she will issue a decision later involving other defendants, including Detroit-based warehouse operator Metro International, which Goldman once owned.

The decisions are a setback for aluminum purchasers who raised price-fixing claims, in the highest-profile litigation affecting the base metals market in two decades.

These plaintiffs had accused Wall Street banks and commodity merchants of having colluded since May 2009 to hoard aluminum in warehouses. They said this led to higher storage costs, delays of up to 16 months to fill orders, and increases in prices of industrial products from soft drink cans to airplanes.

U.S. and European regulators have also examined alleged metals price fixing.

Lawyers for the plaintiffs did not immediately respond to requests for comment, including on whether they will appeal.

Forrest said the plaintiffs did not show that the Goldman and JPMorgan parent companies had any role in the alleged anticompetitive conduct.

She also said she lacked jurisdiction over claims against four foreign defendants, including the warehousing business Henry Bath & Son Ltd, because the aluminum buyers did not show that the defendants engaged in price-fixing that had 'foreseeable and intended effects throughout the United States.'

The LME said it was pleased with the result. Glencore, Goldman and JPMorgan declined to comment. Claims against Glencore's Pacorini Metals unit were also dismissed.

Forrest's decisions were a defeat for two groups of plaintiffs: 'first-level' purchasers that buy aluminum for such things as bottled beverages and cabinets, and whose contract prices reflected storage costs; and Eastman Kodak Co, flashlight maker Mag Instrument Inc, and lithographic plate maker Agfa Corp.

The judge dismissed claims by most of these plaintiffs last August but gave them another chance to sue. She also at the time dismissed claims by so-called commercial end users and consumer end users because they lacked antitrust standing .

Last year, Goldman agreed to sell Metro to Switzerland's Reuben Brothers, and JPMorgan agreed to sell Henry Bath to Switzerland's Mercuria Energy Group Ltd.

The case is In re: Aluminum Warehousing Antitrust Litigation, U.S. District Court, Southern District of New York, No. 13-md-02481.

 Courtesy: www.yahoo.com

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