Antitrust Law Daily Wrap Up, ANTITRUST—S.D. N.Y.: Defendants in aluminum price fixing suit denied interlocutory appeal, (May 15, 2015)

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

The defendants in a lawsuit alleging that various warehouse operators and financial institutions engaged in a webbed conspiracy to restrain trade and artificially raise prices for purchases of aluminum were not entitled to interlocutory appeal of an opinion denying their motions to dismiss, the federal district court in New York City has ruled (In re Aluminum Warehousing Antitrust Litigation, May 14, 2015, Forrest, K.).

The defendants argued that the court’s opinion turned on a controlling question of law as to which there is substantial ground for difference of opinion—namely, that as neither competitors of defendants, nor consumers of defendants’ products, the plaintiffs could adequately allege antitrust standing. The defendants further argued that an interlocutory appeal was appropriate because a related question of law is currently before the Second Circuit because of the pending appeals by the Commercial End User plaintiffs and the Consumer End User plaintiffs (collectively, the “End User” plaintiffs) of the court’s dismissal of their complaints in an Opinion & Order dated August 29, 2014.

The court did not expect the defendants to agree with its ruling that the plaintiffs adequately pleaded standing, but that ruling was not a particularly “close call,” in the court’s view. All decisions on contested antitrust standing could not be subject to interlocutory review because such review would slow cases and result in piecemeal appeals, according to the court.

Nor was there any reason to believe that an appeal would assist in the termination of the litigation. For instance, if the appeal proceeded, and this court was affirmed, the court did not expect that the defendants would immediately settle this case. Short of settlement, then, an appeal in this case was highly likely. An interlocutory appeal at this stage could therefore result in precisely the type of piecemeal appeal disfavored by the Second Circuit.

Here, the alleged § 1 scheme involved a complicated and atypical fact pattern, the court noted. Nevertheless, the facts giving rise to antitrust standing were relatively clear: the plaintiffs’ injury is inextricably intertwined with the alleged anticompetitive conduct of the defendants (which consists of actions designed to interfere with and manipulate the market processes that determine the price of physical aluminum), the court explained. Supreme Court precedent dictated that that is sufficient for standing.

The issue presented was whether generally—given the amount of resources to be spent on discovery, class certification, and dispositive motion practice—appellate review would provide the defendants with additional comfort that their resources were not being spent unnecessarily. It could be that there are cases where a combination of a close call and size leads to such a result—but here, only 50% of that equation was met, the court opined.

Finally, the court did not believe that the fact that the End User plaintiffs would be pursuing an appeal provided any basis for certification. The preliminary issue for the End User plaintiffs related to their position in the chain—the AGC factors and whether they are efficient enforcers. That was a different issue than that as to which defendants here would seek review.

Thus, the defendants’ motion to certify the court’s ruling denying the defendants’ motions to dismiss for interlocutory review was denied.

Attorneys: Benjamin Martin Jaccarino (Lovell Stewart Halebian Jacobson LLP) for Superior Extrusion Inc. Phillip Timothy Howard (Howard & Associates PA) for Master Screens Inc. Daniel E. Becnel, Jr. (Becnel Law Firm, LLC) for River Parish Contractors, Inc. Azra Zahoor Mehdi (The Mehdi Firm) for Viva Railings, LLC, and Regal Recycling, Inc. Adam E. Polk (Girard Gibbs LLP) for D-Tek Manufacturing. Benjamin M. McGovern (Holland & Knight, LLP) for GS Power Holdings LLC, and Metro International Trade Services, LLC. Henry Liu (Covington & Burling LLP) for Henry Bath LLC. John M. Nannes (Skadden, Arps, Slate, Meagher & Flom LLP) for Pacorini Metals USA, LLC. Menachem David Possick (Sullivan & Cromwell, LLP) for Mcepf Metro I, Inc., and Mitsi Holdings LLC.

Companies: Superior Extrusion Inc.; Master Screens Inc.; River Parish Contractors, Inc.; Viva Railings, LLC; Regal Recycling, Inc.; D-Tek Manufacturing; GS Power Holdings LLC; Metro International Trade Services, LLC; Henry Bath LLC; Pacorini Metals USA, LLC; Mcepf Metro I, Inc.; Mitsi Holdings LLC

Cases: Antitrust NewYorkNews