Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM), Glencore Plc (GLEN) and other firms won dismissal of lawsuits accusing them of restricting aluminum supplies in a conspiracy to drive up prices.
U.S. District Judge Katherine B. Forrest yesterday threw out the antitrust claims by buyers of aluminum and aluminum products, finding their complaints don’t add up to a persuasive case that the defendants acted together to increase prices.
“Frankly put, the economics of the alleged conspiracy as pled do not work,” Forrest said in her written opinion. “The allegations tell a story consistent with market-driven behavior by traders and warehouses rather than unlawful conspiracy.”
Forrest also ruled that a group of commercial and consumer end-users of aluminum lacked the legal standing to make their antitrust claims, saying they can’t refile them. She gave the other buyers of the metal in the case permission to try to file new complaints within 21 days.
Yesterday’s ruling doesn’t affect a group of antitrust claims targeting alleged price-fixing in the gold and silver markets. In those cases, plaintiffs claim banks manipulated a benchmark used to set prices throughout the gold and silver markets.
Dozens of aluminum buyers, including makers of boats, flashlights, home railings and pre-fabricated housing sued beginning in August 2013 over claims the metal was being hoarded in Detroit-area warehouses, artificially raising prices for the metal.
The suits targeted an alleged conspiracy among aluminum traders, warehouse companies and the London Metal Exchange, or LME, from 2009 to 2012. More than 80 percent of futures trading in non-ferrous metals such as aluminum, copper, tin, nickel, zinc and lead, is done through the LME.
Until the end of 2012, the LME was owned by its members, which included units of Goldman Sachs, JPMorgan and Glencore. The three firms also owned warehousing companies during part of the time of the alleged conspiracy.
Forrest said yesterday that price increases appeared to have been the unintended result of traders and warehousers independently trying to maximize their own profits.
In her ruling, Forrest said she decided 13 separate motions to dismiss the aluminum purchasers’ claims consisting of more than 2,600 pages of legal filings.
Forrest separately dismissed claims this week against the LME on the ground that it functions as an arm of the U.K. government and is protected by sovereign immunity.
The case is In Re Aluminum Warehousing Antitrust Litigation, 13-md-02481, U.S. District Court, Southern District of New York (Manhattan).
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