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US judge rejects settlements in chemical price-fixing class action
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US judge rejects settlements in chemical price-fixing class action
Jun 25, 2024 9:42 AM

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

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