NEW YORK (Reuters) - A U.S. appeals court on Tuesday upheld the dismissal of nationwide antitrust litigation accusing banks and commodity companies of conspiring to drive up aluminum prices by reducing supply, forcing them to overpay.
By a 3-0 vote, the 2nd U.S. Circuit Court of Appeals in Manhattan said so-called commercial end users and consumer end users lacked standing to sue because their alleged antitrust injuries were too far removed from the alleged misconduct.
The plaintiffs had accused Goldman Sachs Group Inc, JPMorgan Chase & Co, the mining company Glencore Plc , and various commodity trading, metals mining and metals warehousing companies of having colluded from 2009 to 2012 to rig prices by hoarding inventory.
This allegedly caused big delays to fill orders, leading to higher storage costs at warehouses in the Detroit area and elsewhere, which in turn inflated aluminum prices and the cost of producing cabinets, flashlights, strollers and other goods.
Regulators in the United States and Europe have also examined aluminum price-fixing allegations.
Lawyers for the plaintiffs and the defendants did not immediate respond to requests for comment.
Circuit Judge Dennis Jacobs said the plaintiffs “did not (and could not) suffer antitrust injury” because they neither participated in a market affected by anticompetitive conduct, nor showed that their injuries were “inextricably intertwined” with injuries that the defendants intended to inflict.
Jacobs said the plaintiffs did not claim to store aluminum or buy aluminum stored with the defendants, or trade aluminum futures contracts with the defendants, or allege that aluminum they bought underlay the defendants’ futures trades.
“The injury Consumers and Commercials claim was suffered down the distribution chain of a separate market, and was a purely incidental byproduct of the alleged scheme,” he wrote.
Claims alleging violations of state consumer protection and unfair trade laws were also dismissed.
The decision upheld August 2014 rulings by U.S. District Judge Katherine Forrest in Manhattan.
She allowed so-called “first-level” metals purchasers to pursue their own antitrust claims in a separate ruling the following March.
The case is In re: Aluminum Warehousing Antitrust Litigation, 2nd U.S. Circuit Court of Appeals, Nos. 14-3574 and 14-3581.