Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Two additional suits filed alleging conspiracy by Goldman Sachs and others to inflate aluminum prices, (Aug 7, 2013)

By Peter Reap, J.D., LL.M.

Two new complaints have been filed alleging that certain Goldman Sachs Group, Inc. entities (“Goldman”), the London Metal Exchange, and others combined, conspired, or agreed with one another and other persons to restrain aluminum supplies and inflate aluminum prices in violation of the Sherman Act. Putative class representatives Master Screens, Inc., filed suit in the federal district court in Tallahassee, and River Parish Contractors, Inc., filed its complaint in the federal district court in New Orleans.

Master Screens, a company that allegedly purchased aluminum products at inflated prices due to the antitrust conspiracy of the defendants, asserts that Goldman and the others made a series of second level agreements in restraint of trade. In the second level agreements, the defendants allegedly overbid other market participants and further inflated aluminum prices as a means to attract and divert additional aluminum to store in its warehouses. As a result, much less aluminum is leaving the depots than arriving, creating an unreasonable restraint of trade and a supply pinch for manufacturers of everything from soft drink cans to aircraft. The Midwest Premium price per pound of aluminum has increased from 6.1430 cents in February 2010, when the conspiracy began, to 12 cents per pound and higher in February of 2013, according to Master Screens.

Master Screens asserts (1) violations of Florida and other state antitrust and consumer protection statutes; (2) unlawful exclusive dealing and other exclusionary agreements in violation of Section 1 of the Sherman Act; (3) unlawful essential facilities manipulation in violation of Sections 1 and 2 of the Sherman Act; (4) monopolization of aluminum market in violation of Section 2 of the Sherman Act; (5) attempted monopolization of the aluminum market in violation of Section 2 of the Sherman Act; and (6) violation of the federal RICO statute; as well as common law claims.

In a suit containing very similar allegations, River contends that the defendants “have generated hundreds of millions of dollars per year in storage revenues during their regime of artificially high storage rates and grossly inefficient and artificially long delays in loading out aluminum. These extraordinary revenues from inefficiencies and deadweight restraints on the economy, are reflections of Defendants’ extreme monopoly pricing power and abusive agreements in very unreasonable restraint of trade.” River asserts claims under both Section 1 and 2 of the Sherman Act.

Both complaints demand a trial by jury as well as requesting injunctive relief, damages, and reasonable attorney fees.

The two new suits are very similar to the action brought by Superior Extrusion, Inc., in the federal district court in Detroit, on August 1, 2013.

River Parish Contractors, Inc. v. Goldman Sachs Group, Inc., Case No. 2:13-cv-05267-EEF-SS, was filed August 6, 2013. Master Screens, Inc. v. Goldman Sachs Group, Inc., Case No. 4:13-cv-00431-RH-CAS, was also filed August 6, 2013.

Attorneys: Tim Howard (Howard & Associates) for Master Screens, Inc. Daniel E. Becnel, Jr. (Becnel Law Firm, LLC) for River Parish Contractors, Inc.

Companies: Master Screens, Inc.; River Parish Contractors, Inc.; Goldman Sachs Group, Inc.; London Metal Exchange

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