(Adds details from decision, plaintiffs, comments, byline)
By Jonathan Stempel
NEW YORK Aug 29 A U.S. judge on Friday
dismissed nationwide antitrust litigation accusing banks and
commodity companies of conspiring to drive up aluminum prices by
The plaintiffs had accused Goldman Sachs Group Inc,
JPMorgan Chase & Co, the large mining company Glencore
Plc, and various commodity trading, metals mining and
metals warehousing companies of having colluded since May 2009
to manipulate prices by hoarding inventory.
According to the plaintiffs, this caused delays of up to 16
months to fill orders, leading to higher storage costs at
warehouses, many in the Detroit area.
They said the inflated aluminum prices, which are based on
part on those storage costs, made it more costly to make
cabinets, flashlights, strollers and swimming pool enclosures.
In an 85-page decision, U.S. District Judge Katherine
Forrest in Manhattan said there was no showing that the
defendants intended to manipulate prices, though it was clear
that their actions affected the aluminum marketplace.
"As cast in the complaints, this was an unintended
consequence of rational profit maximizing behavior rather than
the product of conspiratorial design," she wrote.
U.S. regulators including the Department of Justice and
Commodity Futures Trading Commission last year began looking
into allegations of manipulation, amid complaints about long
wait times and inflated aluminum prices by such companies as
Coca-Cola Co and MillerCoors LLC.
Forrest has overseen 26 aluminum price-fixing lawsuits that
were combined before her last December.
"Plaintiffs pretty much today have to have smoking gun
evidence of a conspiracy or they cannot go ahead and try to
prove that there was a conspiracy," said Robert Lande, a
University of Baltimore professor specializing in antitrust law.
Christopher Lovell, a lawyer for many of the plaintiffs, did
not immediately respond to requests for comment.
BANKS WELCOME DECISION
The judge said two groups of plaintiffs, commercial end
users and consumer end users, lacked antitrust standing and
could not bring their cases again.
Other plaintiffs were allowed to replead their cases.
These included "first-level" purchasers who buy aluminum for
such things as bottled beverages and cabinets, and whose
contract prices incorporated the storage costs.
They also included Mag Instrument Inc, which makes
flashlights, and Agfa Corp, which makes lithographic plates for
the newspaper and graphics industries.
Christopher Burke, a lawyer for Mag and Agfa, said his
clients plan to replead their cases.
Among the warehouse defendants were Goldman's Metro
International unit, Glencore's Pacorini Metals unit and
JPMorgan's Henry Bath unit.
Goldman spokesman Michael DuVally and JPMorgan spokesman
Brian Marchiony said their banks are pleased with the decision.
Glencore did not immediately respond to a request for comment.
Forrest had on Tuesday dismissed the London Metal Exchange
Ltd, now owned by Hong Kong Exchanges and Clearing Ltd
, as a defendant.
The case is In re: Aluminum Warehousing Antitrust
Litigation, U.S. District Court, Southern District of New York,
(Reporting by Jonathan Stempel in New York; Additional
reporting by David Ingram and Josephine Mason in New York, and
Neha Dimri in Bangalore; Editing by Lisa Shumaker)