Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Latest settlement in steel price fixing class action gets preliminary approval, (Jul 16, 2014)

By Linda O’Brien, J.D., LL.M.

A proposed $58 million settlement in a class action brought on behalf of metal fabricators and distributors against United States Steel Corporation for allegedly conspiring with other steel manufacturers to fix prices has been given preliminary approval by the federal district court in Chicago. This is the third in a series of settlements reached by complaining metal distributors and steel manufacturers (In re Steel Antitrust Litigation, July 14, 2014, Zagel, J.).

Background. Standard Iron Works, Wilmington Steel Processing Co., Inc., Capow, Inc., Alco Industries, Inc., and Gulf Stream Builders Supply, Inc. filed an action in 2008 against United States Steel, ArcelorMittal S.A., Commercial Metals Company, AK Steel Holding Corporation, and Gerdau Ameristeel Corporation, alleging the companies engaged in a conspiracy to fix steel prices. The plaintiffs’ memorandum in support of the motion for preliminary approval of the settlement was filed on July 8, 2014.

Settlement class. For purposes of the settlement, the court preliminarily certified a class of direct purchasers from the defendants between April 1, 2005 and December 31, 2007. The plaintiffs satisfied the requirements of Federal Rule of Civil Procedure 23(a) and 23(b). The court preliminarily determined that the members of the settlement class were ascertainable, were so numerous that joinder would be impracticable, and alleged one or more questions of fact or law common to the class.

The named plaintiffs were conditionally appointed as class representatives because their claims were typical of the claims of the proposed settlement class and the court found they will fairly and adequately protect the interests of the class. The court further determined that, in light of the proposed settlement, a class action was superior to individual actions for the fair and efficient adjudication of the case.

Reasonableness of the settlement. The settlement falls within the range of reasonable and possibly approvable settlements, and the result of good faith, arm’s length negotiations, according to the court. Final approval of the settlement was set for October 17, 2014, at which time the court will consider whether the settlement class meets the requirements for final certification; the fairness, reasonableness, and adequacy of the settlement; whether the notices satisfy the requirements of due process; whether attorneys fees should be awarded; and whether the proposed distribution plan for settlement proceeds should be approved.

Prior settlements. The plaintiffs previously entered into settlements with Commercial Metals Company, AK Steel, and Gerdau Ameristeel Corporation for a total of $15.9 million. The court granted preliminary approval of those settlements on April 11, 2014, and the final approval was granted on July 10, 2014.

The plaintiffs also entered into a settlement with ArcelorMittal S.A. for $90 million. The court granted preliminary approval of the settlement on June 13, 2014. The final fairness hearing on this settlement also was set for October 17, 2014.

The case is No. 08-cv-5214.

Attorneys: Allen D. Black (Fine, Kaplan & Black), Mark C. Hansen (Kellogg, Huber, Hansen, Todd & Evans, PLLC) and Steven A. Kanner (Freed Kanner London & Millen, LLC) for Standard Iron Works, Wilmington Steel Processing Co., Inc., Rem Systems, Inc., Alco Industries, Inc., and Gulf Stream Builders Supply, Inc. Andrew Stanley Marovitz (Mayer Brown LLP) for ArcelorMittal USA, Inc. Jonathan Stuart Quinn (Neal, Gerber & Eisenberg) for US Steel Corp. David Gersch (Arnold & Porter LLP) for Nucor Corp. Nathan P. Eimer (Eimer Stahl LLP) for Gerdau Ameristeel Corp. Joel Gerald Chefitz (McDermott Will & Emery LLP) for Steel Dynamics, Inc. Daniel J. Howley (Cadwalader, Wickersham & Taft LLP) for AK Steel Holding Corp.

Companies: Standard Iron Works; Wilmington Steel Processing Co., Inc.; Rem Systems, Inc.; Alco Industries, Inc.; Gulf Stream Builders Supply, Inc.; ArcelorMittal USA, Inc.; US Steel Corp.; Nucor Corp.; Gerdau Ameristeel Corp.; Steel Dynamics, Inc.; AK Steel Holding Corp.

Cases: Antitrust IllinoisNews