Copper Tube Manufacturers Win Dismissal of Class Action Claim
July 26, 2007
Cleary Gottlieb represented two copper tube manufacturers that won dismissal of a direct purchaser class action on July 26. Cleary Gottlieb represented Europa Metalli and Tréfimétaux while co-counsel represented other defendants, including Outokumpu, Mueller Industries, and Wieland Metals. Basing its allegations on the European Commission’s finding that the companies participated in an air conditioning and refrigeration (ACR) systems cartel affecting Europe, the complaint alleged that defendants colluded to raise the price of ACR copper tubes in the United States. Judge Bernice Donald, United States district court for the Western District of Tennessee, dismissed the claims for lack of subject matter jurisdiction and for failure to state a claim.
Judge Donald found the claims “hollow,” “wholly insubstantial,” and too speculative to proceed, stating that ”[p]laintiffs seem to have relied entirely on facts from the EC decisions peppered with language from the Sherman and Clayton acts and conclusory statements about a price-fixing conspiracy in the U.S.” She added: “In so doing, Plaintiffs have crafted a complaint with only the appearance of legitimacy. … Plaintiffs have simply ‘cut-and-pasted’ into their complaint the collusive activities found by the EC to have taken place in Europe and tacked on ‘in the United States and elsewhere.’” Thus, Judge Donald stated “Plaintiffs’ complaint is essentially a work of fiction” and allowing the case to continue “would be unjust and a gross abuse of the judicial system.”