Volume 44, Issue 3 - March 2009

Legislation & Legal

Judge Denies Motion to Dismiss Anti-Trust Suit Against Manufacturers

A U.S. District Court judge has denied motions by several glass manufacturers to dismiss a class-action anti-trust suit filed against them alleging that they agreed to raise and fix prices “through a combination of collusive energy surcharges and price increases.” The glass manufacturers included in the suit are AGC America Inc., AGC Flat Glass North America Inc., Guardian Industries Corp., Pilkington North America Inc., Pilkington Holding Inc. and PPG Industries.

According to court documents, the defendants state that they did not make any sort of agreement, and that they find “insufficient” the allegations of parallel energy surcharges, parallel price increases by some defendants, participation in trade associations, defendants’ profitability and miscellaneous suspicious statements regarding “European misconduct.”

In addition, PPG specifically argues that it should be removed from the case, as it was not named in the 2007 European Commission (EC) report that led to fines on several glass manufacturers for alleged price-fixing practices (see December 2007 USGlass, page 36).

The judge points out however, that the complaint alleges that “there was a history of inability to raise and maintain prices” prior to the period covered by the complaint, July 1, 2002, through December 2006. He also notes that the complaint alleges that there was a history of varying surcharges by region up until June 2002, but afterwards this variation ceased.

“Rather, the CAC [Consolidated Amended Complaint] alleges an agreement that existed for over thirty months beginning in June of 2002, by raising prices by identical percentages and charging energy surcharges in virtual lockstep while providing customers with identical charts and justifications for the same, until February of 2005, when the EC launched raids upon the European construction flat glass market. Thereafter, the Defendants did not engage in lockstep parallel conduct,” the judge writes. “Thus, contrary to Defendants’ position, this is not a case where Plaintiffs rely solely on the decision of the EC to assert a domestic conspiracy or a solely parallel conduct case. Therefore, dismissal of the CAC is not warranted based on Defendants’ EC allegation arguments and arguments of parallel conduct.”

The judge also notes that, while membership in trade associations does not necessarily suggest conspiracy, “the meeting dates provide the Defendants with notice of specific time frames and manner of the alleged agreement.”

Finally, as to PPG’s request to be removed from the case, the judge writes, “It is of no moment that PPG did not participate in the European conspiracy. The CAC is not simply asserting a theory of ‘since it happened there, it happened here.’”

Several similar suits were filed after the EC report. In June 2008, approximately 20 of these suits were consolidated in the Western District, where this current decision was made (see April 2008 USGlass, page 22). 

Amended Reorganization Plan Filed for Pittsburgh Corning Corp.

Pittsburgh-based PPG Industries’ amended plan of reorganization for Pittsburgh Corning (PC) Corp. has been filed in the United States Bankruptcy Court. PPG is a 50-percent shareholder of PC. PC filed for Chapter 11 Bankruptcy protection in 2000. Under the terms of the amended plan, all current and future personal injury claims against PPG relating to exposure to asbestos-containing products manufactured, distributed or sold by PC will be channeled to a trust for resolution. 

In 2002, PPG entered into a settlement arrangement relating to asbestos claims. The company has reserved approximately $900 million for that settlement arrangement. Under the modified settlement arrangement, PPG’s obligation is currently $735 million for claims that will be channeled to the trust. PPG will retain the approximately $165 million difference as a reserve for asbestos-related claims that will not be channeled to the trust.

“This amended plan addresses the issues raised by the court in its 2006 opinion on the matter, and while we continue to believe PPG is not responsible for injuries caused by Pittsburgh Corning products, this amended plan would permanently resolve PPG’s asbestos liabilities associated with Pittsburgh Corning,” explains James C. Diggs, PPG senior vice president, general counsel and secretary.
www.ppg.com 

USG
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