By Mike Scarcella
June 25 (Reuters) - A U.S. judge has refused to approve class action settlements worth $38.5 million that would resolve allegations that a U.S. subsidiary of Formosa Plastics and others artificially inflated the cost of a chemical used in detergents and other products.
Citing uncertainties over who would share in the settlement, Chief U.S. District Judge Elizabeth Wolford in Rochester, New York, ruled on Monday that she would not sign off on the deals between a proposed class of commercial purchasers of sodium hydroxide, or “caustic soda,” and chemical makers Formosa USA, Westlake and Shintech.
The purchasers, including New York-based wholesale chemical distributor Amrex Chemical Co Inc and Pennsylvania-based Main Pool and Chemical Co Inc, alleged a years-long conspiracy to fix caustic soda prices beginning in 2015.
Formosa, Westlake and Shintech did not immediately respond to requests for comment on Tuesday. Attorneys for the plaintiffs did not immediately respond to similar requests.
Formosa last year said it would pay $7.5 million to exit the case, marking the first settlement since the litigation began in federal court in Rochester in 2019. Houston-based Westlake said it would pay $19 million, and Shintech, a subsidiary of Tokyo-based Shin-Etsu Chemical , agreed to settle for $12 million. None of the defendants admitted wrongdoing.
Caustic soda is sold as a solid or liquid and is used in soaps and detergents, pharmaceuticals and other industries.
Wolford said in her ruling that there were obstacles in determining whether certain companies, based on purchasing history, were members of the settlement class. She said that “fundamental barrier” meant she could not approve the three accords.
Wolford also said the plaintiffs had not shown “common proof to demonstrate antitrust injury on a classwide basis.”
Non-settling defendants include U.S. chemical maker Olin Corp and Occidental Petroleum's OxyChem . Neither company immediately responded to a request for comment. Both have denied any wrongdoing.
Wolford set a hearing for July 19 to discuss the next steps in the litigation.
The case is In re Caustic Soda Antitrust Litigation, U.S. District Court, Western District of New York, No. 1:19-cv-00385- EAW-MJR.
For direct purchasers: Solomon Cera of Cera LLP; Robert Kaplan of Kaplan Fox & Kilsheimer
For Formosa: Alan Unger of Sidley Austin
For Westlake: William Merrill of Susman Godfrey
For Shintech: John Briggs of Axinn, Veltrop & Harkrider
Read more:
Chemicals maker Formosa reaches 'icebreaker' settlement in price-fixing lawsuit
(Reporting by Mike Scarcella)
((Mike.Scarcella@thomsonreuters.com;))
Comments