CLEVELAND (April 3, 2009)—An antitrust case Goodyear filed against some of its synthetic rubber suppliers will proceed after a federal judge rejected the defendants' motion for dismissal.
Judge David D. Dowd Jr. of the U.S. District Court for the Northern District of Ohio ruled March 2 that the defendants' arguments for dismissal were insufficient.
Dowd did suggest, however, that the issue of whether the charges had passed their statute of limitations might be taken up at a later date.
Goodyear filed its lawsuit in May 2008, accusing the defendants of overcharging it for butadiene rubber and styrene-butadiene rubber in an international price-fixing cartel.
The tire maker seeks treble damages, attorneys' fees and injunctive relief.
Listed defendants in the case as of March 2 were Bayer A.G.; its subsidiaries Bayer Corp. and Bayer MaterialScience L.L.C.; Dow Chemical Co., with its subsidiaries Dow Deutschland Inc., Dow Deutschland GmbH & Co. OHG and Dow Europe GmbH; Eni S.p.A.; Syndial S.p.A.; and Polimeri Europa S.p.A., with its subsidiary Polimeri Europe Americas Inc.
Dow and Eni were among the petrochemical companies fined by the European Commission in November 2006 for a price-fixing conspiracy in BR and SBR between 1996 and 2002.
A total of five companies were fined an aggregate of $682 million. Eni received the largest fine, $358 million, and Dow was fined $85 million. Bayer blew the whistle on the conspiracy in 2002, and so avoided the $269 million fine it otherwise would have received from the EC.
In its original brief, Goodyear said the defendants sold the company BR and SBR at inflated prices beginning as early as August 1995 until at least November 2002, in violation of the Sherman Antitrust Act.
The egregious and all-pervasive nature of the conspiracy, with its “affirmative acts of concealment,” negates the usual four-year statute of limitations for price-fixing cartels, Goodyear said.
Attorneys for the defendants argued for dismissal at a hearing in December 2008. In a Dec. 23 post-hearing brief, defendants noted the court itself observed the case represented a “conflict between foreign antitrust and domestic antitrust concerns.”
Many of the transactions Goodyear included in its lawsuit were foreign and not domestic transactions, so a U.S. court has no jurisdiction over them, the defendants argued. Instead of the $700 million worth of transactions Goodyear claimed, they said, the actual amount under the court's jurisdiction did not exceed $160 million and probably was closer to $60 million.
Only one of the defendants—Bayer—actually sold rubber to Goodyear in U.S. commerce, the attorneys said. Furthermore, Goodyear did not offer concrete proof of “affirmative acts of concealment,” and therefore the statute of limitations had passed, they said.
In his March 2 order, Dowd said the statute of limitations issue could be considered later in a summary judgment motion, but was premature at the pleading stage. He deferred a decision on whether Goodyear could recover damages on foreign purchases of BR and SBR, and dismissed the claim that the case lacked enough “heft” in the form of factual evidence to proceed.
“As one of the world's largest tire manufacturers, Goodyear purchases a substantial volume of synthetic rubber,” the tire maker said in a prepared statement after the ruling. “To the extent the company has been damaged by anti-competitive acts, we view it as in the best interest of the company and our shareholders to seek recovery.”
An attorney for Bayer declined comment. The case now will proceed to the discovery phase.