US court rejects antitrust lawsuit against banks and commodity companies

In market news on Aug 10, according to Reuters, U.S. appeals court on Tuesday rejected nationwide antitrust lawsuit by a number of end users accusing banks and commodity companies of working together to drive up aluminium prices by deliberately controlling supply.

The 2nd U.S. Circuit Court of Appeals in Manhattan, by a 3-0 vote, said so-called commercial end users and consumer end users lacked relevance to sue because their alleged antitrust injuries were too far removed from the alleged misconduct.

The petitioners had accused Goldman Sachs Group Inc, JPMorgan Chase & Co, Glencore Plc, and various other commodity trading, metals mining and metals warehousing companies of scheming in between 2009 and 2012 to raise prices by hoarding aluminium inventory.

They alleged that such deliberate hoarding caused delays in delivering order and rise in warehouse storage costs in Detroit and elsewhere, which in turn raised aluminium prices and production costs of producing cabinets, flashlights, strollers and other goods.

Regulators in the United States and Europe have also examined aluminium price-fixing allegations.

According to Circuit Judge Dennis Jacobs said the plaintiffs "did not (and could not) suffer antitrust injury" because they neither participated in a market affected by anticompetitive conduct, nor showed that their injuries were "inextricably intertwined" with injuries that the defendants intended to inflict.

He also said the plaintiffs did not claim to store aluminium or buy aluminium stored with the defendants, or trade aluminium futures contracts with the defendants, or allege that aluminium they bought underlay the defendants' futures trades.

He also added that the injury the petitioners claimed was something purely incidental.

The court also dismissed claims alleging violations of state consumer protection and unfair trade laws. The decision maintained August 2014 rulings by U.S. District Judge Katherine Forrest in Manhattan.