Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Pa.: $17.55 million settlement approved in fastener price fixing suit, (Jan 27, 2014)

By Jeffrey May, J.D.

Multi-district litigation based on an alleged conspiracy to fix prices and allocate customers and markets for “fasteners” has wrapped up against three of the four groups of original defendants. After approving a $17.55 million settlement on behalf of entities that purchased fasteners—zippers, snap fasteners, buttons, hooks, and other similar products used primarily in the textile, apparel, footwear, and luggage industries—between 1991 and 2007, the federal district court in Philadelphia entered final judgment as to the three groups of defendants. The plaintiffs have voluntarily dismissed a fourth defendant, Scovill Fasteners, Inc., that filed for Chapter 11 bankruptcy (In re: Fasteners Antitrust Litigation, January 24, 2014, Surrick, R.).

In November 2013, the plaintiffs filed a motion seeking final approval of proposed settlements with three groups of defendants: (1) the “Prym defendants,” which include William Prym GmbH & Co. KG, Prym Consumer USA, Inc., Prym Fashion, Inc., Prym Inovan GmbH & Co., Prym Consumer GmbH, EP Group S.A., Inovan GmbH & Co. KG, Prym Fashion GmbH, Prym Consumer Europe GmbH, and William Prym Inc.; (2) the “YKK defendants,” which include YKK Corporation, YKK Corporation of America, Inc., YKK (U.S.A.) Inc., and YKK Snap Fasteners America, Inc.; and (3) the “Coats defendants,” which include Coats Holdings, Ltd., Coats Holdings, Inc., Coats American, Inc., d.b.a. Coats North America, Coats North America de Republica Dominicana, Inc., and Coats & Clark, Inc. Under the proposed settlements, the Prym defendants will pay $1.1 million, the YKK defendants will pay $6.6 million, and the Coats defendants will pay $9.85 million.

The proposed settlements were the product of “protracted settlement negotiations” that began with the Prym defendants. The plaintiffs and the Prym defendants reached a settlement in a March 2010. The other two settlements followed.

Preliminary approval of the settlements was granted in August 2013, and notice of the proposal was sent to settlement class members in October 2013. There were no objections filed by any potential settlement class members, and only one settlement class member opted out. A final-approval hearing was held on January 10, 2014.

For settlement purposes, the court approved a class of “all persons and entities who purchased Fasteners in the United States directly from a Defendant during the period from and including January 1, 1991 to an including September 19, 2007.” The class excluded the defendants and related entities, as well as governmental entities.

The proposed settlement class, which purportedly includes thousands of members, satisfied the class certification requirements of Rules 23(a) and 23(b) of the Federal Rules of Civil Procedure. With respect to Rule 23(b)(3), the court was satisfied that questions of law or fact common to class members predominate over any questions affecting only individual members and that a class action was the superior method for adjudicating the controversy. It was noted that, prior to consolidation of the suits, 35 plaintiffs had filed complaints in four federal district courts challenging the defendants’ conduct.

Fair, adequate, and reasonable. The settlement was fair, adequate, and reasonable, the court also concluded. The court considered nine factors in reaching its decision: (1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; and (9) the reasonableness of the settlement fund in light of all the risks of litigation.

Under the nine-prong test, all but one of the factors weighed in favor or strongly weighed in favor of approving the proposed settlements. The court noted that only the defendants’ ability to withstand a greater judgment was a neutral factor.

The court was satisfied that the settlement came after sufficient information had been provided to settlement class counsel to make an informed decision about the merits of the case and the fairness of the settlement terms. That only one member opted out of the settlement class, and no members objected to the proposed settlement, also supported approval.

The case is No. 08-md-1912 (MDL Docket No. 1912).

Attorneys: Warren Rubin (Law Offices of Bernard M. Gross, P.C.), Gerald J. Rodos (Barrack, Rodos & Bacine, Kaplan), Joseph C. Kohn (Kohn, Swift & Graf, P.C.), and Gregory K. Arenson, (Kaplan, Fox & Kilsheimer LLP) for Settlement Class. Steven A. Reiss (Weil, Gotshal & Manges, LLP) for William Prym GmbH & Co. KG. Peter E. Halle (Morgan, Lewis & Bockius LLP) for YKK Corp. Jonathan K. Youngwood (Simpson Thacher & Bartlett LLP) for Coats Holdings, Ltd.

Companies: William Prym GmbH & Co. KG; YKK Corp.; Coats Holdings, Ltd.

Cases: Antitrust PennsylvaniaNews