Banks and aluminum warehouses accused of intentionally inflating prices in the primary aluminum market have submitted a memorandum in support of their motion for summary judgment against all “umbrella” claims made by the plaintiffs. They were accused by first level purchasers (FLPs) and individual plaintiffs (IPs) in an ongoing suit in the U.S. District Court for the Southern District of New York.
In the memorandum, the financial defendants, who are affiliated with either Goldman Sachs & Co. LLC, J.P. Morgan Securities plc, or Glencore Ltd., and the warehousing defendants, Metro International Trade Services LLC, Mitsi Holdings LLC, Henry Bath LLC and Pacorini Metals USA LLC, have asked that all but one of the FLPs be eliminated from the case. The defendants allege that seven of the plaintiffs purchased all of their aluminum from non-defendant suppliers and that none acquired any aluminum from a defendant or an alleged co-conspirator. The eighth plaintiff, Ampal, acquired all of its aluminum from non-defendant third parties except for approximately 2,200 metric tons of aluminum it purchased from defendant Glencore and alleged co-conspirator Century Aluminum, according to the memorandum.
“Accordingly, if this motion is granted, the claims of all FLPs and IPs other than Ampal will be eliminated in their entirety, and Ampal’s claims will be narrowed to the roughly 2,200 tons of aluminum it acquired from Glencore and Century,” reads the memorandum.
In a recent opinion from the court, the plaintiffs’ motion to certify a class action lawsuit was denied because “the FLPs had failed to demonstrate that, at a trial on their claims, common issues would predominate over individualized ones.”
In the recent memorandum, defendants argue that “the overwhelming majority of recent court decisions that have addressed the viability of the umbrella theory have held that umbrella purchasers lack ‘efficient enforcer’ standing to assert antitrust claims.”
“This case presents an even stronger basis for denying efficient enforcer standing to umbrella purchasers than the other benchmark price cases considered in this District. Plaintiffs here allege that defendants conspired to manipulate a benchmark price for aluminum, and that plaintiffs entered into contracts with non-defendant aluminum suppliers that either incorporated or were influenced by the allegedly-manipulated benchmark,” reads the memorandum.
“Like the other benchmark price cases decided in this District, the independent decision[s] of non-defendant third parties to include a benchmark price in some (but not all) of their contracts with plaintiffs ‘breaks the chain of causation’ between plaintiffs’ alleged injuries and defendants’ alleged misconduct,” it continues. “But unlike those other benchmark cases, this case involves an unusually long and complex chain of causation that renders plaintiffs’ claims especially indirect and attenuated.”