June 25 (Reuters) - A U.S. judge has refused to approve
class action settlements worth $38.5 million that would resolve
allegations that a U.S. subsidiary of Formosa Plastics
and others artificially inflated the cost of a chemical used in
detergents and other products.
Citing uncertainties over who would share in the settlement,
Chief U.S. District Judge Elizabeth Wolford in Rochester, New
York, ruled on Monday that she would not sign off on the deals
between a proposed class of commercial purchasers of sodium
hydroxide, or "caustic soda," and chemical makers Formosa USA,
Westlake and Shintech.
The purchasers, including New York-based wholesale chemical
distributor Amrex Chemical Co Inc and Pennsylvania-based Main
Pool and Chemical Co Inc, alleged a years-long conspiracy to fix
caustic soda prices beginning in 2015.
Formosa, Westlake and Shintech did not immediately respond
to requests for comment on Tuesday. Attorneys for the plaintiffs
did not immediately respond to similar requests.
Formosa last year said it would pay $7.5 million to exit the
case, marking the first settlement since the litigation began in
federal court in Rochester in 2019. Houston-based Westlake said
it would pay $19 million, and Shintech, a subsidiary of
Tokyo-based Shin-Etsu Chemical ( SHECF ), agreed to settle for
$12 million. None of the defendants admitted wrongdoing.
Caustic soda is sold as a solid or liquid and is used in
soaps and detergents, pharmaceuticals and other industries.
Wolford said in her ruling that there were obstacles in
determining whether certain companies, based on purchasing
history, were members of the settlement class. She said that
"fundamental barrier" meant she could not approve the three
accords.
Wolford also said the plaintiffs had not shown "common proof
to demonstrate antitrust injury on a classwide basis."
Non-settling defendants include U.S. chemical maker Olin
Corp ( OLN ) and Occidental Petroleum's ( OXY ) OxyChem. Neither
company immediately responded to a request for comment. Both
have denied any wrongdoing.
Wolford set a hearing for July 19 to discuss the next steps
in the litigation.
The case is In re Caustic Soda Antitrust Litigation, U.S.
District Court, Western District of New York, No. 1:19-cv-00385-
EAW-MJR.
For direct purchasers: Solomon Cera of Cera LLP; Robert
Kaplan of Kaplan Fox & Kilsheimer
For Formosa: Alan Unger of Sidley Austin
For Westlake: William Merrill of Susman Godfrey
For Shintech: John Briggs of Axinn, Veltrop & Harkrider
Read more:
Chemicals maker Formosa reaches 'icebreaker' settlement in
price-fixing lawsuit