Judge Katherine Forrest of the Southern District of New York recently dismissed another set of complaints in what she described as “the next chapter in the saga” of the In re Aluminum Warehousing Antitrust Litigation cases, No. 13-md-024710-KBF (S.D.N.Y. Nov. 30, 2016). Referring to her previous October 5, 2016 ruling, which dismissed claims asserted by certain first-level purchasers of aluminum products, Judge Forrest found (in a ruling dated November 30, 2016) that the remaining complaints by additional first-level purchasers were equally defective because they too failed to establish antitrust injury. The October 5, 2016 ruling, in turn, substantially relied on the Second Circuit’s August 9, 2016 opinion, which affirmed dismissal of claims brought by indirect purchasers of aluminum or aluminum products. Broadly, the various complaints alleged that aluminum futures traders, banks, and others conspired to manipulate the warehouse storage costs of aluminum, resulting in higher prices in the market for physical aluminum.
The Second Circuit affirmed dismissal of the indirect purchasers claims on the ground that they neither participated in the market where the alleged anti-competitive conduct occurred (the aluminum warehousing market), nor could they satisfy the narrow exception to that requirement because their apparent injury was not “inextricably intertwined” with the injuries of market participants under Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982). Judge Forrest then found that the claims brought by the first-level purchasers—who sought to assert claims as direct purchasers—were essentially the same as the indirect purchasers, and neither the purported direct purchasers nor the indirect purchasers actually participated in the aluminum warehousing market. Those first-level purchasers therefore suffered no antitrust injury and could not establish the requisite antitrust standing necessary to state a claim.
After Judge Forrest dismissed the claims of several first-level purchasers in her October 5, 2016 ruling, she allowed additional briefing and argument for the remaining first-level purchasers because those plaintiffs had filed separate complaints. However, none of the additional arguments put forward by the remaining first-level purchasers was sufficient to survive dismissal. At bottom, the complaints at issue in the November 30, 2016 ruling “fared no better” than the complaint at issue in the October 5, 2016 ruling because they did not “have materially different allegations regarding antitrust injury.” Specifically, in order to have suffered an antitrust injury, “plaintiffs needed to be injured in the warehouse services or warrant trading markets that were allegedly being directly manipulated,” and they failed to do so.
Judge Forrest’s November 30, 2016, decision may be the next chapter in the Aluminum Warehousing Antitrust Litigation, but it may not be the last.