Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ohio.: Frivolous objector sanctioned $10K in polyurethane foam price fixing suit, (Nov 20, 2015)

By Greg Hammond, J.D.

An individual has been sanctioned $10,000 for frivolously objecting to a $147.8 million settlement of direct purchaser claims that various manufacturers engaged in a conspiracy to fix prices for chemicals used in the manufacture of polyurethane products. The federal district court in Toledo, Ohio granted the sanction, finding that the individual was not a member of the proposed direct purchaser class, knew that he was not a class member, nevertheless maintained the objection, and attempted to extort money from the class (In re Polyurethane Foam Antitrust Litigation, November 19, 2015, Zouhary, J.).

The $147.8 million settlement was preliminarily approved in November 2014. Although the individual filed an objection in February 2015, the court overruled it as frivolous because the objector was not a class member. Nevertheless, the individual continued to object, filing a notice of appeal, which was rejected by the Sixth Circuit. The objector subsequently offered the district court a “Carpet Contract,” which was issued by “Seller: Costco Wholesale.” This evidence, however, proved that the objector was an indirect purchaser and not a member of the direct purchaser class.

In granting the $10,000 sanction against the objector, the court determined that the individual could not reasonably believe he had standing to object to the settlements; his assertion that the entire direct purchaser class entered into a price fixing agreement with defendants was frivolous; he knew he was not a class member yet nevertheless maintained his objection and attempted to extort money from the class; and he has a history of filing similar frivolous objections in other cases.

In addition, the court noted that the settlement has “hung in limbo” for over eight months due to the individual’s refusal to withdraw his “meritless” objection and that the pool created by plaintiffs’ lawyers to fund litigation expenses has consequently been depleted by $6.6 million. The $10,000 sanction will serve as a partial attorney fee award, which will hopefully deter the objector’s “repeat frivolous conduct,” the court said.

The case is No. 1:10 MD 2196.

Attorneys: Stephen R. Neuwirth (Quinn, Emanuel, Urquhart, Oliver & Hedges, LLP) for Direct Purchaser Class. James Hamilton Walsh (McGuire Woods) for Carpenter Co., Carpenter Holdings Inc., and E.R. Carpenter, LP.

Companies: Carpenter Co., Carpenter Holdings Inc.; E.R. Carpenter, LP; Leggett & Platt

Cases: Antitrust OhioNews