Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ohio.: Objector fails to disqualify class counsel in polyurethane foam price fixing suit, (Jan 4, 2016)

By Linda O’Brien, J.D., LL.M.

In the multidistrict litigation arising from an alleged conspiracy to fix the prices of polyurethane foam products, an objector to settlement agreements reached with several defendants failed to show that disqualification of class counsel for the indirect purchaser plaintiffs was appropriate, the federal district court in Toledo, Ohio has decided (In re Polyurethane Foam Antitrust Litigation, December 30, 2015, Zouhary, J.).

Beginning in January 2011, indirect purchasers of flexible polyurethane foam filed a series of class actions suits against several furniture component makers and suppliers over an alleged conspiracy to fix prices for chemicals used in the manufacture of polyurethane products. The court granted preliminary approval to settlement agreements with nine of the defendant manufacturers. Class counsel then filed an application for an award of attorneys’ fees. In response, objector Chris Andrews moved to disqualify class counsel and to compel disclosure.

Disqualification. The court determined that Andrews failed to show disqualification of class counsel was appropriate or required. Class counsel’s telephone call to a home health care entity to verify “proof of purchase” documents sent to the entity by a furniture retailer was neither “unethical” nor “illegal.” The court noted that counsel’s investigation into whether Andrews had standing to object in the case was pursued in good faith and appropriate, especially given Andrews’ history as a serial, extortionate objector in six previous lawsuits.

Andrews’ argument that the telephone call violated the Health Insurance Portability and Accountability Act (HIPAA) was rejected, since counsel was not subject to HIPAA and there was no evidence that counsel requested or obtained any personal medical information. Furthermore, the court found that Andrews’ bare assertion that the settlements should have been higher was inadequate for rejecting the settlements and for disqualifying counsel.

Motion to compel. In his motion to compel, Andrews requested that class counsel provide information relating to the telephone call to the home health care entity. Since most of the information had already been provided by counsel, the court denied the motion as moot.

The case is No. 1:10 MD 2196.

Attorneys: Kimberly A. Conklin (Kerger & Hartman, LLC) and Lori A. Fanning (Miller Law) for Indirect Purchaser Class. James H. Walsh (McGuire Woods, LLP) for Defendants Liaison Counsel.

Companies: DomFoam International, Inc.; Valle Foam Industries Inc.; A-Z Sponge & Foam Products Ltd.; Carpenter Co.; Leggett & Platt, Inc.; Hickory Springs Manufacturing Company; Mohawk, Inc.; Vitafoam, Inc.; Woodbridge Foam Fabricating, Inc.

Cases: Antitrust OhioNews