U.S. judge dismisses aluminum price-fixing litigation

A federal judge on Wednesday dismissed nationwide litigation by aluminum purchasers who accused banks and commodity companies of conspiring to drive up prices for the metal by reducing supply, forcing them to overpay.

The decision by U.S. District Judge Katherine Forrest in Manhattan halts, for now, three years of litigation against Goldman Sachs Group Inc, JPMorgan Chase & Co, mining company Glencore Plc, and various commodity trading, mining and metals warehousing companies.

Purchasers had accused the defendants of colluding from 2009 to 2012 to manipulate prices by hoarding inventory.

They claimed that this caused delays of up to 16 months to fill orders, leading to higher storage costs, which in turn inflated aluminum prices and the cost of producing cabinets, flashlights, soft drink cans, strollers and other goods.

In August, the 2nd U.S. Circuit Court of Appeals in Manhattan upheld Forrest's dismissal two years earlier of antitrust claims by "indirect" commercial end users and consumer end users.

Applying that ruling, Forrest on Wednesday said related claims by "first level" purchasers, which she allowed to go forward in March 2015, must also be dismissed.

She said both cases rested on the same "core assertion" that Platts Midwest Premium, a component of aluminum prices, rose because of alleged "shenanigans" in aluminum warehouse services.

"There is no allegation or evidence in the record that defendants engaged in any anticompetitive conduct outside of the aluminum warehouse services market," Forrest wrote. "Profit by defendants or losses by plaintiffs subsequently experienced in physical aluminum is irrelevant to antitrust standing."

Lawyers for the purchasers did not immediately respond to requests for comment. Goldman spokesman Michael DuVally and JPMorgan spokesman Brian Marchiony said their banks were pleased with the decision. Glencore did not immediately respond to requests for comment.

Forrest concluded with a long footnote lamenting how a 2015 U.S. Supreme Court decision, Gelboim v. Bank of America Corp, could impede settlements of complex litigation by letting some plaintiffs--here, the indirect purchasers--appeal dismissals of their claims while other plaintiffs press on.

"In this case, the opposite has occurred," she wrote. "A 'Gelboim Appeal' has caused a case nearing final procedural stages to come to a halt. Perhaps this is the most just result. But plaintiffs will undoubtedly appeal--and if successful, the parties will be picking up where they left off two years hence."

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