Paint pigment price-fixing suit to proceed

A federal judge has cleared the way for a multimillion-dollar class action lawsuit to proceed against a Hunt Valley company that allegedly conspired to inflate and fix the price of a widely used paint additive.

Judge Richard D. Bennett rejected Millennium Inorganic Chemicals Inc.’s motion for summary judgment in the antitrust case in U.S. District Court in Baltimore.

The complaint alleges the company and three other companies repeatedly conspired to fix the price of titanium dioxide, a pigment that provides paint’s brightness and opaqueness. Millennium was purchased in 2007 by Cristal Global and is now a wholly owned subsidiary of the Jeddah, Saudi Arabia-based company.

In his order Wednesday, Bennett also denied summary judgment to Millennium’s remaining co-defendant, Kronos Worldwide Inc.

The two other alleged co-conspirators have settled out of court. E.I. du Pont De Nemours & Co., of Wilmington, Del., agreed to pay $72 million and Salt Lake City-based Huntsman agreed to pay $6.5 million under their respective settlements, in which neither company admitted liability.

The class of plaintiffs includes all purchasers of titanium dioxide from the four companies since Feb. 1, 2003.

The class alleges the four major producers violated the federal Sherman Act by increasing prices in lockstep following formal and informal meetings with each other and industry consultants.

Under the Sherman Act, the plaintiffs, who filed suit on Feb. 9, 2010, would be entitled to three times an award of compensatory damages.

Millennium and Kronos argued the plaintiffs’ contention of price fixing was based solely on circumstantial evidence.

But Bennett said that is often true of civil litigation and it is up to the jury, not the presiding judge, to determine how much weight to give circumstantial evidence.

“A case relying on direct evidence would of course be stronger for proving a price-fixing conspiracy, but echoing the finding of the 7th Circuit, ‘most cases are constructed out of a tissue of [ambiguous] statements and other circumstantial evidence, since an outright confession will ordinarily obviate the need for a trial,” Bennett wrote in his memorandum opinion. ”More importantly, the interpretation and weighing of conflicting circumstantial evidence is a role assigned to the jury at trial.”

Millennium and Kronos also argued that the court record shows all four companies were fierce competitors. not conspirators.

But Bennett said the jury must be given the opportunity to balance that record against evidence that the four companies used the same industry consultants, belonged to the same industry group and allegedly raised prices by identical amounts within days of each other.

“[W]hile the record contains some evidence of competition, that portion of the record must be weighed against the substantial portion on which a jury could permissibly infer a conspiracy,” Bennett wrote. “While the defendants’ argument in this regard is certainly suitable for trial, it does not advance their position at summary judgment.”

Millennium attorneys James L. Cooper and Anne P. Davis did not respond to telephone messages seeking comment. Cooper and Davis are with Arnold & Porter LLP in Washington.

Neither James P. Ulwick, an attorney for Dallas-based Kronos, nor plaintiffs’ counsel Paul Mark Sandler would comment on the case because the litigation is ongoing. Ulwick is with Kramon & Graham P.A. in Baltimore. Sandler is with Shapiro, Sher, Guinot & Sandler in Baltimore.

Parallel price increases

In its court filings, the plaintiff class said the titanium dioxide market was in a tailspin in the 1990s, with the per-ton price dropping from $3,200 to $1,900 during the course of the decade. These economic woes forced Millennium to close its plant in Baltimore in 2001.

Concerned about the sharp drop, the Titanium Dioxide Manufacturers Association changed its rules to permit non-European manufacturers to join the industry group, thereby opening the door to DuPont, a leading seller. TDMA also formed a Global Statistics Program for the sharing of sales data that — in a non-collusive marketplace — would be deemed proprietary, the plaintiffs claim.

After a Jan. 24, 2002, TDMA meeting, the four companies announced increases of 5 cents per pound in the price of titanium dioxide within days of each other. These parallel price increases continued multiple times in each succeeding year through 2010, the plaintiffs allege.

But Millennium and Kronos, in their court filings, cite many instances during those years in which they took business away from each other by undercutting their competitors’ prices. To illustrate the ferocity of the competition, the companies said they seized on the business DuPont lost when it had to close its DeLisle, Miss., plant due to damage caused by Hurricane Katrina in summer 2005.

The case is In Re: Titanium Dioxide Antitrust Litigation, No. 10-0318, U.S. District Court, Baltimore.