Law360 (November 14, 2018, 4:27 PM EST) – By Bryan Koenig– Kodak has hit Goldman Sachs, Glencore and others with a U.K. lawsuit accusing them of manipulating aluminum prices, echoing antitrust claims it has pursued so far without success in the United States.
Several Eastman Kodak Co. units filed a claim on Nov. 7 in the High Court of Justice of England and Wales against units of Glencore, Pacorini Metals AG, JPMorgan Chase & Co., Henry Bath & Son Ltd., Goldman Sachs Group Inc. and a warehousing provider for the London Metal Exchange Metro International Trade Services LLC.
The companies are in violation of U.K. and European Union competition law, according to Kodak, which is currently trying to revive its part of litigation alleging manipulation of aluminum warehousing services or warrants for aluminum futures contracts that U.S. courts have roundly rejected so far.
“The unlawful agreements and/or concerted practices and/or conduct had as their object and/or effect the prevention, restriction or distortion of competition for the supply of aluminum in (inter alia) the European Economic Area, and/or constituted an abuse of a dominant position,” Kodak said in a High Court claim form seen by Law360.
According to the brief claim form, the companies did so by “manipulating or distorting the aluminum market” or the warehousing system of the London Metal Exchange, restricting aluminum’s availability, increasing the prices paid for aluminum, or driving up the premium on top of the exchange price that aluminum buyers must pay.
The banks and warehouse companies, Kodak said, either participated in the conduct or “exercised a decisive influence” over those who did, making them liable for “inflated premiums and/or increased aluminum market prices” that companies like Kodak had to bear. The claim form pegs the amount of damages at in excess of £200,000, plus interest.
Glencore and Goldman Sachs declined to comment and representatives for the remaining companies did not immediately respond Wednesday to requests for comment.
On the other side of the Atlantic, Kodak continues to fight to revive its claims in multidistrict litigation after a New York federal judge ruled in 2016 that Kodak, Fujifilm, Mag Instrument Inc. and Reynolds Consumer Products LLC cannot sue because they do not operate in the aluminum warehousing market.
U.S. District Judge Katherine B. Forrest’s dismissal was based on a Second Circuit finding that manufacturers and buyers of aluminum products weren’t targeted by and can’t sue over the alleged manipulation, and her own decision granting the defendants’ bid to dismiss a consolidated case brought by direct purchasers based on a lack of antitrust standing.
The claims revolve around an alleged conspiracy between the banks, which traded on the aluminum futures markets, and affiliated warehouses that store aluminum associated with the derivatives contracts. The antitrust plaintiffs claim intentional delivery delays at those warehouses in 2010 and 2013 raised the costs of metal storage and inflated prices paid by aluminum buyers.
Kodak and others are currently trying to revive their case at the Second Circuit, which heard oral arguments in early May. Others have also appealed their own dismissals, with the underlying multidistrict litigation otherwise quiet since late 2016.
Kodak is represented by Scott+Scott UK LLP.
Counsel information for the defendants was not available Wednesday.
The case is Eastman Kodak Co. and others v. Glencore PLC and others, case number CP-2018-000034, in the High Court of Justice of England and Wales.
–Additional reporting by Melissa Lipman, Eric Kroh and Jody Godoy. Editing by Pamela Wilkinson.