Several compounders and processors recently have initiated lawsuits against plastics additives suppliers over allegations of price fixing.
The lawsuits, including several filed earlier this year in U.S. District Court in Philadelphia, run parallel to antitrust investigations by authorities in the United States, Canada, Europe and Japan.
The defendants named are Rohm & Haas Co., Atofina Chemicals Inc., Atofina SA, Total SA, Crompton Corp., Ferro Corp., Metco North America Inc., Mitsubishi Rayon Co. Ltd., Mitsubishi Rayon America Inc., Kureha Chemical Industry Co. Ltd., Kureha Corp. of America, Kaneka Corp., Akzo Nobel NV and Akzo Nobel Inc.
The plaintiffs are compounders Gitto/ Global Corp., Polyvel Inc. and Newline Color Inc., pipe producer Surprise Plastics Inc., Isaac Industries Inc. and Crane Group Co. The additives in question include heat stabilizers, impact modifiers and processing aids.
Separately, the U.S. Department of Justice is investigating possible antitrust violations among plastics additives suppliers. The Canadian Competition Bureau, European Commission and Japan Fair Trade Commission are conducting similar investigations.
``We believe that there are going to be indictments returned with respect to plastics additives,'' said Robert Kaplan, a lawyer representing the plaintiffs.
An indictment from the investigations would be helpful for plaintiffs in the civil suit, but it would not influence whether civil suits will proceed, Kaplan said in a telephone interview from his office at Kaplan Fox & Kilshemier LLP of Chicago.
More civil suits could pop up. A Chicago law firm announced June 2 that it also will investigate price fixing for plastics additives, for the period from January 1990 to January 2003.
``The purpose of the investigation is to inform purchasers of plastics additives that they may have overpaid due to antitrust violations,'' said Michael O'Meara, a lawyer with Kenneth B. Moll & Associates Ltd. The suits will seek three times the financial loss for customers who purchased the products.
In mid-February, inspectors in North America, Europe and Japan conducted coordinated surprise raids on the premises of additives producers suspected as being part of a global price-fixing cartel. So far, investigations have led to a grand jury being convened in early May in California and another grand jury in an undisclosed U.S. jurisdiction regarding price fixing and other antitrust violations.
Three publicly traded additives suppliers have acknowledged that they face possible civil suits and are subject to antitrust investigations in 10-Q reports filed with the Securities and Exchange Commission.
Crompton of Middlebury, Conn., noted it is one of several companies that are the subject of a coordinated criminal investigation by federal authorities into heat stabilizers. It also faces charges in federal and state class-action suits for those materials, impact modifiers and process aids. Resolution of those issues could have a material impact on Crompton, it added.
Crompton said it is cooperating with authorities and has conditional amnesty regarding criminal charges in the United States, Canada and Europe for heat stabilizers. The additives accounted for about $220 million of the firm's 2002 sales. It entered the business in 1999 when it merged with Witco Corp.
By the end of last year, Crompton had incurred $6.3 million in pretax costs relating to antitrust investigations into rubber chemicals. Twenty class-action suits for rubber chemicals had been filed by Dec. 31.
Crompton has been conducting its own internal investigation into the antitrust allegations and as a result placed one senior officer on paid administrative leave. It did not specify the business area of the officer.
Rohm & Haas, based in Philadelphia, said it is being investigated in Europe, Japan and Canada and its records have been subpoenaed by two U.S. grand juries. It and other suppliers also face seven civil suits in Pennsylvania, one in New York and one in Ohio.
``We do not believe these cases have merit and will defend them vigorously,'' the firm said in a May 10-Q filing.
Ferro of Cleveland also said it does not believe its employees violated antitrust laws. It said it does not expect the investigations to affect the firm materially.
Atofina Chemicals Inc. had no comment on the investigations said the firm's lawyer, Steven Bizar with Buchanan Ingersoll PC of Philadelphia.