Eastman Kodak Co., AGFA Corp., AGFA Graphics NV, Fujifilm Manufacturing U.S.A., Inc., Mag Instrument Inc., Claridge Products and Equipment, Inc., individually and on behalf of all others similarly situated, Custom Aluminum Products Inc., Ampal Inc., Extruded Aluminum Corp., Reynolds Consumer Products LLC, Southwire Co., LLC, Plaintiffs-Appellants,
Henry Bath LLC, Metro International Trade Services, LLC, J.P. Morgan Chase & Co., Goldman Sachs & Co. LLC, Goldman Sachs International, JPMorgan Securities PLC, Glencore Ltd., Pacorini Metals USA, LLC, Pacorini Metals Vlissingen B.V., JPMorgan Chase Bank, N.A., Glencore International AG, Glencore AG, J. Aron & Co. LLC, MITSI Holdings LLC, Access World (USA) LLC, Henry Bath & Son Limited, Defendants-Appellees, Glencore Xstrata PLC, GS Power Holdings LLC, MCEPF Metro I, Incorporated, Goldman Sachs Group, Inc., Pacorini Metals AG, London Metal Exchange Limited, London Metal Exchange Limited, John Does 1-10, Does 1-10, inclusive, Unidentified Parties, John Does 1- 50, Defendants.
Argued: May 3, 2018
by the plaintiffs from a judgment of the United States
District Court for the Southern District of New York
(Katherine B. Forrest, J.), for defendants in three
consolidated antitrust actions. The district court granted
summary judgment, ruling that this court's decision in
In re Aluminum Warehousing Antitrust Litig.
(Aluminum III), 833 F.3d 151 (2d Cir. 2016) compels
the conclusion that these plaintiffs, like the plaintiffs in
that case, failed to establish antitrust standing. We
disagree. The circumstances of these plaintiffs are
materially different. In addition, the district court erred
in denying Reynolds and Southwire an opportunity to replead
on the ground of futility.
judgment is VACATED and the case REMANDED.
Patrick J. Coughlin, Robbins Geller Rudman & Dowd LLP,
San Diego, CA (Steven F. Hubachek, Carmen A. Medici, on the
brief), for Direct Purchaser Plaintiffs-Appellants.
Brandt, Brandt Law LLC, Edwardsville, IL (Walter W. Noss,
Stephanie A. Hackett, Scott Scott, Attorneys at Law, LLP,
San Diego, CA, on the brief), for Plaintiffs-Appellants
Eastman Kodak Co., AGFA Corp., AGFA Graphics NV, Fujifilm
Manufacturing U.S.A., Inc. and Mag Instrument Inc.
J. Palmersheim, Honigman Miller Schwartz and Cohn LLP,
Chicago, IL (David E. Koropp, Anand C. Mathew, Matthew G.
Mrkonic, on the brief), for Plaintiffs-Appellants Reynolds
Consumer Products LLC and Southwire Co. LLC.
Richard C. Pepperman II, Sullivan & Cromwell LLP, New
York, NY (Suhana S. Han, William H. Wagener, Sullivan &
Cromwell LLP, New York, NY; John M. Nannes, John H. Lyons,
Skadden, Arps, Slate, Meagher & Flom LLP, Washington,
D.C.; Robert D. Wick, Henry Liu, John Playforth, Covington
& Burling LLP, Washington, D.C.; Eliot Lauer, Jacques
Semmelman, Curtis, Mallet-Prevost, Colt & Mosle LLP, New
York, NY, on the brief), for Defendants- Appellees.
Before: LEVAL, LYNCH, and DRONEY, Circuit Judges.
plaintiffs in three consolidated actions appeal from the
grant of summary judgment by the United States District Court
for the Southern District of New York (Katherine B. Forrest,
J.) dismissing their complaints. The complaints
allege violations of Section 1 of the Sherman Act, 15 U.S.C.
§ 1, through a conspiracy to inflate prices in the
primary aluminum market. The term "primary
aluminum" is used in the industry to describe aluminum
in the form produced at a smelter or primary aluminum plant,
by original producers, as distinguished from "secondary
aluminum," which is reconstituted aluminum scrap.
plaintiffs are manufacturers that use primary aluminum in the
fabrication of their products. The plaintiffs allege
that they purchased primary aluminum for their needs mainly
through long-term supply contracts with aluminum producers.
In accordance with industry standards, the purchase prices
provided in their long-term supply contracts included as a
price element the Platts Midwest Premium (hereinafter the
"Midwest Premium"), a figure which, as explained
below, is based on the costs associated with delivery of
plaintiffs in the three actions fall into three categories.
In the district court, these three categories were termed
"Individual Plaintiffs" ("IPs"),
"First Level Purchasers" ("FLPs"), and
Reynolds Consumer Products LLC and Southwire Company, LLC
("Reynolds/Southwire"). The IPs are Eastman Kodak
Company, Agfa Corporation, Agfa Graphics NV, Fujifilm
Manufacturing U.S.A. Inc., and Mag Instrument Incorporated.
The FLPs are Custom Aluminum Products Incorporated,
Incorporated, Ampal Incorporated, Extruded Aluminum
Corporation, and Claridge Products and Equipment, Inc. While
we will at times use the designations "FLP,"
"IP," and "Reynolds/Southwire" to make
procedural distinctions between the three sets of plaintiffs,
we perceive no significant substantive difference between
their claims for purposes of their contentions in this appeal
seeking relief from the grant of summary judgment. All of
them purchased primary aluminum at prices that included the
Midwest Premium, and all were first in line to pay prices
affected by the defendants' alleged inflation of the
Midwest Premium. See Brief of Appellant AGFA
Corporation at 6; Fujifilm Amended Complaint ¶ 32;
IPs' Joint Amended Complaint ¶¶ 18, 31-47;
Brief of Appellant Ampal at 8; FLPs' Complaint
¶¶ 17, 32-40; Reynolds and Southwire Brief at
10-12; Complaint of Reynolds/Southwire ¶¶ 1-5.
are two categories of defendants: Financial Defendants and
Warehousing Defendants. The Financial Defendants are J.P.
Morgan Chase & Co., Goldman Sachs & Co., and Glencore
Ltd. Each of them trades in primary aluminum and in primary
aluminum derivatives, including futures contracts that are
linked to the price of primary aluminum on the London Metals
Exchange ("LME"), the world's largest
non-ferrous metals market. During the relevant time,
approximately from 2011 to 2014, each is alleged to have sold
primary aluminum in transactions that included the Midwest
Premium as an element of the sale price. Each also (directly
or indirectly) owned one of the Warehousing Defendants,
having purchased them in 2010 during an aluminum glut in the
aftermath of the 2008 financial crisis.
Warehousing Defendants are Henry Bath & Son Ltd., Metro
International Trade Services, LLC, and Pacorini Metals USA,
LLC. Each of them owns and operates aluminum warehouses
certified by the LME, and each of them was owned during the
relevant time by one of the Financial Defendants-Henry Bath
by J.P. Morgan, Metro by Goldman Sachs, and Pacorini by
gist of the allegations is that the Financial Defendants,
having acquired large positions in primary aluminum at low
prices during the economic downturn following the 2008 market
collapse in anticipation of future price increases, conspired
with each other and with the Warehousing Defendants to
inflate artificially the prices they would realize in the
sale of these positions by manipulating the Midwest Premium.
plaintiffs allegedly were harmed by the defendants'
manipulation of the Midwest Premium because the manipulation
required the plaintiffs to pay artificially inflated prices
in their purchases pursuant to their supply contracts with
complaints of these three plaintiff groups were part of a
larger group of related actions that were originally filed in
various district courts throughout the country and were
consolidated for pretrial proceedings by the United States
Panel on Multidistrict Litigation before Judge Forrest in the
Southern District of New York. The other consolidated
actions, brought by groups identified as Commercial End Users
and Consumer End Users, also asserted liability based on the
defendants' conspiratorial manipulation of the Midwest
Premium. Those plaintiffs, however, purchased aluminum
otherwise than in the primary aluminum market in which
plaintiffs in this case claim to have suffered injury. This
court later concluded that those plaintiffs "disavow[ed]
participation in any of the markets in which the defendants
operate." In re Aluminum Warehousing Antitrust
Litig. (Aluminum III), 833 F.3d 151, 161 (2d
district court had earlier dismissed the actions of the
Commercial End Users and Consumer End Users on the ground
that they were inefficient enforcers who did not satisfy the
requirements for antitrust standing. The court noted that
"[t]here will always be others who are more directly
injured . . . ." In re Aluminum Warehousing
Antitrust Litig. (Aluminum I), No. 13-md-2481
(KBF), 2014 WL 4277510, at *21, *39. (S.D.N.Y. Aug. 29,
2014). The district court denied them leave to
replead. In contrast, the district court granted the FLPs and
IPs leave to amend their complaints, finding-at least at
first-that their amended complaints stated claims for