US court revives aluminium antitrust cases against Goldman, JPMorgan & Glencore

On Tuesday, a federal appeals court revived aluminium lawsuits by aluminium buyers such as Novelis, Eastman Kodak, Fujifilm and Reynolds Consumer Products, which accused Goldman Sachs, JPMorgan Chase, Glencore and other companies of conspiring to drive up aluminium prices by controlling supply. The 2nd US Circuit Court of Appeals in Manhattan said the case was dismissed erroneously.

The aluminium buyers accused banks and commodity trading, mining and metals warehousing companies of conspiring to hoard aluminium inventory earlier this decade, after prices had declined because industrial activity fell during the global financial crisis.

The banks and commodity trading, mining and metals warehousing companies were accused of hoarding aluminium inventory earlier this decade when aluminium prices were declining because of global financial crisis leading to artificial supply crisis.  

The petitioners alleged that the conspiracy led to delays in processing orders and higher storage costs, ultimately inflating the cost for procuring aluminium. The appeals court said the purchasers could sue because they claimed to suffer losses in the aluminium market, which was controlled by the defendants in an illegal manner.

The judge distinguished them from commercial end users and consumer end users, whose antitrust claims were rejected by the appeals court in August 2016 as the alleged misconduct was not connected to the claimed injuries.

Circuit Judge Pierre Leval said “these plaintiffs' injuries were a direct result of the defendants' anticompetitive conduct" and appealed against the earlier judge’s decision to dismiss the case.

"Even if manipulation took place in another market, if it were directed toward our clients' markets and inflated the price of aluminium there, we should be able to bring an antitrust case," Patrick Coughlin, a lawyer for the direct purchasers said.

The cases were reopened in the federal court in Manhattan, where they are now overseen by US District Judge Denise Cote.