Friday, December 11, 2015

 
Labaton Sucharow Files Class Action in Price-Fixing Scheme Affecting Drinking Water Purification Agent

NEW YORK (December 11, 2015) – Labaton Sucharow LLP today filed a class action on behalf of the plaintiff Little River County R.D.A. Water System, alleging that Frank A. Reichl, Chemtrade Logistics Inc., Chemtrade Chemicals US LLC, and John Does 1-10 (collectively, “the defendants”) entered into an unlawful conspiracy to eliminate competition in the liquid aluminum sulfate (LAS) market.

Aluminum sulfate is a widely used, non-toxic, chemical compound for the removal of impurities from water in order to make it drinkable. It is also used in the manufacturing of paper. As a result of the conspiracy, the plaintiff and class members paid more for LAS than they would have otherwise paid in the absence of the collusion during a 13-year timespan from 1997 to at least July 2010. The main purchasers of LAS are generally municipalities, due to the compound’s ability to remove impurities from raw, untreated water both safely and effectively.

Led by the Co-Chairs of the Firm’s Antitrust & Competition Litigation Practice Gregory Asciolla and Jay L. Himes, the plaintiff alleges that the defendants and their co-conspirators agreed to fix, raise, stabilize, and maintain prices; rig bids; and allocate customers in the LAS U.S. market, circumventing the competitive bidding process for LAS supply contracts by secretly meeting to agree on the prices to be quoted or bid to customers before starting the bidding process.

The United States Department of Justice’s Antitrust Division is also currently investigating price-fixing, bid-rigging, and customer allocation in the LAS market, and one defendant has already admitted to participation in the unlawful conspiracy.

“Vigorous private enforcement of antitrust laws is of paramount importance to ensure a free and competitive marketplace, deter abusive commercial practices, and compensate injured parties,” said Asciolla. “Municipalities ‎with limited budgets and few extra dollars to spare were overcharged in their purchases of this important chemical used to provide clean, safe drinking water to communities large and small throughout the United States. We look forward to pursuing the litigation on behalf of the class.”