A lawsuit alleging illegal warehousing practices by Goldman Sachs and other corporations is moving through the court system. The case revolves around a conspiracy between the banks and their affiliated warehouses, resulting in deliberate delays in delivering aluminum to buyers. The intentional delays increased the cost of metal storage and increased prices paid by buyers. In the Second Circuit, however, a judge found that a direct purchaser of aluminum cannot sue on antitrust grounds.
Viva Railings LLC
The plaintiffs in the Goldman Sachs Aluminum WarehousING lawsuit against Viva Railings LLC are two companies, Viva Steel Railings LLC and Regal Recycling Inc., alleging that Goldman improperly hoarded aluminum and artificially raised the price of aluminum. The lawsuit alleges that Goldman used improper methods to obtain aluminum and other metals for its use and benefit.
The plaintiffs in the case allege that the defendants conspired to artificially increase the price of aluminum by hoarding them in their warehouses in the Detroit area. In 2009, the Financial Defendants began to acquire and operate aluminum warehouses and facilities in the Detroit area, and they also purchased the assets of Metro Steel, Henry Bath, and Pacorini. The resulting acquisition of these companies forced the plaintiffs to deal with the company and its subsidiaries, including Viva Railings.
In their response, the defendants argued that the plaintiffs are not efficient enforcers. They argued that they were not able to determine the MWP because they purchased the aluminum from third-party industrial smelters that incorporated manipulated MWP into their contracts. Therefore, they could not charge the full MWP. But plaintiffs argue that the law of the case requires that they enforce the contract with a reasonable degree of diligence.
Regal Recycling Inc.
Viva Railings, a Texas-based manufacturer of steel railings, has joined forces with Regal Recycling Inc. is a New York lawsuit alleging that Goldman artificially inflated the price of aluminum by storing it in warehouses and hoarding it. This lawsuit is not the first to target Goldman; similar suits have been filed against the bank in Michigan and Florida.
Defendants argue that plaintiffs are not efficient enforcers. This is a false claim because the plaintiffs purchased aluminum from non-party industrial smelters, which incorporated the MWP into their contracts, allowing them to avoid paying the full MWP. However, plaintiffs argue that the law requires efficient enforcers. The plaintiffs also cite other claims that state and local governments have failed to enforce the MWP.
The plaintiffs argue that the defendants conspired with each other to artificially lengthen the delivery times of aluminum from the LME warehouses. This, in turn, inflated the price of aluminum by driving up the MWP. The plaintiffs contend that these acts constituted antitrust violations. These practices have resulted in a rise in the price of aluminum.
JP Morgan
The latest news regarding the Goldman Sachs Aluminum Warehousing lawsuit comes as a settlement has been approved by a federal judge. The settlement deals with the issues raised by the alleged stockpiling of aluminum by JP Morgan and Goldman Sachs. The two companies were accused of violating the Sherman Antitrust Act by illegally stockpiling aluminum at their Detroit warehouses, with some of it staying in the warehouses for more than 500 days.
The plaintiffs argued that the Second Circuit’s decision in Aluminum VI barred the defendants’ summary judgment motion because it knew the plaintiffs bought their aluminum from producers. The Second Circuit had dismissed the plaintiffs’ claims in Aluminum IV, but it had the opportunity to reverse that decision on alternative grounds, such as that the plaintiffs did not act as efficient enforcers. The Second Circuit reversed the ruling, however, because it mistakenly analyzed the class’s injury based on an incorrect antitrust analysis by Judge Forrest.
The defendants argue that the plaintiffs are not efficient enforcers. Plaintiffs argued that the defendants inflated the MWP to avoid paying it. This fact has been embraced by both parties. However, the plaintiffs argued that the law of the case requires that the plaintiffs be efficient enforcers. The defendants have also argued that their arguments were based on false information, not the actual truth.
