An antitrust lawsuit involving major players in the U.S. steel industry is finally coming to a close after litigation that lasted a better part of the last decade.
In 2008, Pennsylvania-based Standard Iron Works and four other companies filed a lawsuit alleging U.S. Steel and ArcelorMittal conspired with six other domestic steel manufacturers “to manipulate the supply and price of steel products sold in the United States,” according to court documents.
The final three defendants in the case, Nucor Corp., Steel Dynamics Inc. and SSAB Swedish Steel Corp. have settled for a combined $30 million, bringing the total settlement amount to $193.9 million. Five other parties—ArcelorMittal, U.S. Steel, Commercial Metals Company, AK Steel Holding Corp. and Gerdau Ameristeel Corp.—previously reached settlements totaling $163.9 million.
In the complaint, the plaintiffs alleged that for a two-and-a-half-year period in the mid-2000s, from April 1, 2005, the eight steelmakers “conspired to restrict their output, thereby increasing the prices they were able to charge for steel products.”
The initial five settlements were reached in 2014, and each party denied wrongdoing but claim to have opted to settle to avoid the cost of further litigation. Meanwhile, the last three continued to fight the case in court.
According to a memorandum filed by the plaintiffs and proposed class attorneys, negotiations between the sides “accelerated in the second half of 2016.” The three companies “had made it clear that, in the absence of the settlements, would vigorously contest all aspects of the case,” as it had throughout litigation. Since “complex litigation such as this is inherently risky and costly,” the sides agreed to finally settle last month.
ArcelorMittal and U.S. Steel took the brunt of the settlement, contributing $90 million and $58 million, respectively. The other three initial settlers combined for just under $16 million.
In the recent settlement, Nucor was hit the hardest at $23.4 million, while the two remaining companies combined for $6.6 million.
“Unlike ArcelorMittal, for example, the [remaining three defendants] were not alleged ringleaders of the alleged conspiracy,” the memorandum reads. “Instead, [they] were smaller than ArcelorMittal [in terms of sales volume] and the case against them was proving to be more difficult based on the facts developed to date in discovery.”
This month, James B. Zagel, the judge presiding over the case, approved the settlements, pending a fairness hearing that will take place in February 2017.