Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Companies which purchased flexible polyurethane foam allege price fixing conspiracy, (Aug 2, 2013)
Organizations Mentioned:American Bedding Company, Inc. | Carpenter Co. | Carpenter Company | Nexsen Pruet, LLC | Park Place Corporation. | U.S. Department of Justice
By Peter Reap, J.D., LL.M.
Four companies that purchased flexible polyurethane foam in the United States from between approximately January 1999 and July 2010 have alleged, in two separate complaints filed in the federal district court in Greenville, South Carolina, a conspiracy to fix the prices of and not to compete on the sale of flexible polyurethane foam among several suppliers. Park Place Corporation, a manufacturer of mattresses and bedding products, filed one of the complaints, and the second complaint was brought by American Bedding Company, Inc., Diamond Mattress Company, and Rest Master Bedding Company. Flexible polyurethane foam is a major input in the production of the bedding and mattress products produced by the plaintiffs.
According to the complaints, as a proximate result of the conspiracy, the plaintiffs were injured because the prices they paid for polyurethane foam were higher than they would have been absent the conspiracy. The plaintiffs seek to recover the overcharge damages which they sustained as a result of the unlawful conduct of the defendants and their co-conspirators and to enjoin such conduct in the future.
In February 2010, defendant Vitafoam, Inc. voluntarily approached the United States Department of Justice, Antitrust Division, to self-report evidence of illegal antitrust activities amongst itself and other companies and individuals in the industry and to seek acceptance into the Antitrust Division’s Corporate Leniency Program, the complaints note. Since that time, Vitafoam and its employees have been cooperating with a criminal investigation into illegal anticompetitive conduct in the flexible polyurethane foam market being conducted by antitrust authorities in the United States, Canada, and the European Union.
Substantial evidence of the conspiracy has been gathered by the DOJ during its investigation, the complaints allege. Further, in January 2012, defendants Valle Foam and Domfoam were indicted and pled guilty to violating Canadian competition laws by fixing prices of flexible polyurethane foam with the other named defendants. Evidence of the conspiracy has also come to light through litigation of a conspiracy involving upstream urethane chemical and polyether polyols suppliers, In re Urethane Chemicals Antitrust Litig., MDL 1616, in which a number of the defendants in the instant action are plaintiffs.
The suits assert that the contract, combination and conspiracy among the defendants and their co-conspirators described above consisted of a continuing course, pattern and practice of conduct regarding the production, pricing and sale of polyurethane foam in violation of Section 1 of the Sherman Act. The substantial terms and purpose of the alleged conspiracy were to: (1) fix, stabilize, maintain, and/or raise prices of polyurethane foam in the United States and elsewhere; (2) allocate the volume of sales and/or market shares of polyurethane foam in the United States and elsewhere; (3) allocate contracts or accounts to supply polyurethane foam in the United States and elsewhere; and/or (4) control or reduce the output of and/or capacity to produce polyurethane foam in the United States and/or elsewhere.
The complaints request a jury verdict in the amount of the compensatory damages sustained by the plaintiffs, a permanent injunction, and attorney fees.
The complaints in Park Place Corporation v. Carpenter Company, Case No. 6:13-cv-2085, and American Bedding Company, Inc. v. Carpenter Company, Case No. 6:13-cv-2084-JMC, were filed July 31, 2013.
Attorneys: David C. Eddy (Nexsen Pruet, LLC) for American Bedding Company, Inc., and Park Place Corporation.
Companies: Carpenter Company; American Bedding Company, Inc.; Park Place Corporation.
News: Antitrust SouthCarolinaNews