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From Antitrust Law Daily, August 15, 2013

Price fixing claims against titanium dioxide producers withstand summary judgment motions

By Jeffrey May, J.D.

While “there is no ‘smoking gun’ that explicitly reveals an agreement to conspire” among producers of titanium dioxide, a jury should decide the claims of a complaining class of purchasers against them, the federal district court in Baltimore has decided. Motions for summary judgment filed by the remaining defendants in the action—Kronos Worldwide Inc. and Cristal USA Inc. (formerly known as Millennium Inorganic Chemicals, Inc.)—were denied (In Re: Titanium Dioxide Antitrust Litigation, August 14, 2013, Bennett, R.).

The class of titanium dioxide purchasers, represented by Haley Paint Company and others, alleged that Kronos and Millennium, together with E.I. du Pont de Nemours & Company, Huntsman International LLC, and Tronox Inc. conspired to fix prices for titanium dioxide. Titanium dioxide is a chemical powder used as a pigment in paints and other coatings.

According to the court, the plaintiffs’ allegations centered on, among other things, the following evidence: trade group activities; industry collection of statistical information; routine communication of confidential, commercially sensitive information among industry participants; and repeated price increase announcements allegedly executed in lockstep by the defendants.

The defendants moved for summary judgment, contending that there was no basis in the record on which a jury could infer that the defendants conspired to fix the price of titanium dioxide. They argued that the alleged conspiracy alleged was highly implausible and that the record was replete with evidence of fierce competition. They maintained that the evidence was equally consistent with competition as with collusion, arguing that the complaining purchasers failed to meet their burden of producing evidence tending to exclude the possibility that the defendants were acting independently.

There were genuine issues of material fact to be resolved at trial, according to the court. There was ample evidence that the defendants agreed to raise prices and shared commercially sensitive information—by way of industry consultants, face-to-face meetings, and a trade group statistics program—to facilitate their conspiracy.

Parallel Conduct, “Plus Factors.” The defendants allegedly participated in 25 parallel price increase announcements. “The sheer number of parallel price increases, when coupled with the other evidence in this case, could lead a jury to reasonably infer a conspiracy,” in the court's view. The plaintiffs put forward evidence showing the existence of certain “plus factors” that made an inference of conspiracy permissible: (1) motive to enter into a price fixing conspiracy, (2) actions contrary to the defendants' interests, and (3) non-economic evidence “implying a traditional conspiracy.”

The court noted that the third plus factor—non-economic evidence that suggests a traditional conspiracy—carries great weight. For purposes of establishing this plus factor, the complaining purchasers “marshaled substantial evidence.” The court pointed to competitor statements regarding industry “discipline” and the sharing of industry information through the statistics program. In addition, there were statements suggesting that the cause of the 25 parallel price increases during the relevant time period was collusive coordination, not conscious parallelism.

Statute of Limitations. The court also sought summary judgment on the ground that the statute of limitations barred the claims. A reasonable jury could conclude that the defendants fraudulently concealed evidence of collusion to toll the statute of limitations, according to the court. The defendants had unsuccessfully argued that the plaintiffs were on notice of the facts forming the basis of their claim seven years before the complaint was filed and that the plaintiffs failed to exercise due diligence to discover the facts underlying the action.

The case is RDB-10-0318.

Attorneys: Michael C. Dell Angelo (Berger and Montague PC) for Haley Paint Co. James P. Ulwick (Kramon and Graham PA) for Kronos Worldwide Inc. Richard Arthur Ripley (Haynes and Boone LLP) for Millennium Inorganic Chemicals, Inc.

Companies: Haley Paint Co.; Kronos Worldwide Inc.; Millennium Inorganic Chemicals, Inc.

MainStory: TopStory Antitrust MarylandNews

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