Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Iron pipe fitting manufacturers settle price fixing, monopoly claims, (May 11, 2016)

By Jody Coultas, J.D.

Ductile iron pipe fitting purchasers (DIPF), including Yates Construction Co., Inc., urged the federal district court in Trenton, New Jersey, to approve a settlement agreement with DIPF manufacturers, according to a memorandum in support of final approval of the class action settlements and for creation of a fund to pay litigation expenses (In re Ductile Iron Pipe Fittings Indirect Purchaser Antitrust Litigation, May 9, 2016).

Sigma Corporation, Star Pipe Products, Ltd., and others allegedly engaged in a conspiracy to raise and fix the prices for DIPF and monopolize the domestic DIPF market. Class members alleged that they paid higher prices for DIPF than they should have, and sought damages, injunctive relief, and attorney fees and costs.

Negotiation between the class and SIGMA and Star resulted in final settlement agreements. In June 25, 2015, and August 26, 2015, the court preliminarily approved the settlements and certified the classes for settlement purposes. Counsel were authorized to disseminate Notice and Claim Forms by direct mail, email, publication, and Internet banner ads.

SIGMA agreed to pay $1,805,000 into a settlement fund for distribution to the class in three equal installments. Star has already paid $641,250 into a settlement fund, some of which may be used for notice and notice administration costs. Star shall pay the balance, in three equal installments over the next three years, according to the memorandum. In the event the companies default, the entire unpaid balance becomes due immediately. SIGMA and Star also agreed to assist Plaintiffs in the continued prosecution of this litigation against the remaining defendant, McWane Corp.

Yates argues that the settlement agreements are fair, adequate, and reasonable. The memorandum noted that extensive negotiations between the parties over the course of several months, including numerous mediation sessions by a retired judge, were concrete evidence of arm’s-length negotiations. Direct notice of the settlement was mailed and emailed to class members, and a comprehensive multi-media notice plan published notice in trade publications and on the Internet sites of other trade publications. No objections have been received. The memo in support of the settlement agreement states that the lack of opt-outs and objections qualified for a presumption of fairness.

In determining whether the settlement is fair and reasonable, courts in the Third Circuit must consider: (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 trial; (7) The ability of the defendants to withstand a greater judgment; (8) The range of reasonableness of the settlement in light of the best possible recovery; and (9) The range of reasonableness of the settlement in light of all attendant risks of litigation. The indirect purchaser plaintiffs argued that each of the above factors weighed in favor of approval of the proposed class action settlement.

Settlement class counsel were not seeking an award of attorney fees from the settlement fund, but requested permission to use approximately 20 percent of the SIGMA and Star settlements to pay for expenses incurred and that will be incurred in the prosecution of the lawsuit.

The case is No. 12-169 (AET)(LHG).

Attorneys: Jayne Arnold Goldstein (Pomerantz LLP) and Robert S. Kitchenoff (Weinstein, Kitchenoff & Asher, LLC) for Yates Construction Co., Inc. Gabrielle Elise Farina (Thompson & Knight LLP) and Joseph Jacob Fleischman (Norris, McLaughlin & Marcus, PC) for Star Pipe Products, Ltd.

Companies: Yates Construction Co., Inc.; SIGMA Corporation; Star Pipe Products, Ltd.; McWane Corp.

News: Antitrust NewJerseyNews