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DuPont says plaintiffs' claims in price-fixing class action have 'fundamental defects'

By Kyla Asbury | Nov 21, 2014

SAN JOSE, Calif. (Legal Newsline) - DuPont has again asked a federal judge to dismiss a paint price-fixing class action lawsuit against it after claiming the plaintiffs failed to close claim gaps in their second amended complaint.

DuPont asked District Judge Beth Labson Freeman to dismiss the complaint, stating that the court should strike all of the plaintiffs' class allegations because the named plaintiffs and their counsel "impermissibly seek to represent two classes - the 'merchant class' and the 'consumer class' that have inherent and unavoidable conflicts."

The motion to dismiss was filed Nov. 17 in the U.S. District Court for the Northern District of California.

"Plaintiffs' amended pleading continues to exhibit many of the fundamental defects the court found dispositive in its September 22, 2014 order granting (with few exceptions) defendants' motion to dismiss plaintiffs' first amended complaint," the motion states.

In the court's Sept. 22 order, in which it granted the motion to dismiss in part with leave to amend, the court found that the plaintiffs, indirect purchasers of titanium dioxide, known as TiO2, failed to adequately allege that they suffered an injury that was traceable to the alleged anticompetitive conspiracy among the defendants, who represent a portion of the global manufacturers of TiO2.

"Plaintiffs sought to bring claims with regard to each and every product containing TiO2 as a chemical component, while offering no allegations to show that they could ever hope to trace alleged overcharges by defendants through myriad manufacturing and distribution chains down to merchants and end users of the products," the motion states.

"Plaintiffs' sparse allegations were insufficient to support constitutional standing and antitrust standing, as well as inadequate to state substantive claims under the many state laws they invoked (including laws of states in which they did not reside)."

With the plaintiffs' second amended complaint, they attempt to remedy some of the first amended complaint's shortcomings, according to the motion.

"But those revisions are to no avail," the motion states. "Even 'architectural coatings' encompasses thousands of products with very different formulations and concentrations of TiO2."

The plaintiffs' new causation allegations remain "vague, conclusory, and...demonstrate that it would be impossible to trace the effect — if any — of defendants’ purported conspiracy down every level of every manufacturing and distribution chain to merchants and consumers."

Los Gatos Mercantile Inc.; Fred Swaim Inc.; Ace Hardware of South Walton Inc.; Lexington Home Center LLC; R.F. Cole Inc.; Abbott Paint And Carpet, Inc.; Proctor's Building Materials Inc.; Greene’s Hardware & Supply Company Inc.; Columbare Inc.; Jan Harrison; Lee Ranalli; Morgan Tanner; Spencer Hathaway; Todd Turley; Debbie Hale; Keli Anno; Deanna Deveney; Christopher Kuon-Tsen Lee; Jim Buckingham; Tanda Saxton; John Wozniak; Jerome Sherman; Beverly Jenkins; David Petersen; Tom Stever; Brian Bawol; Ransome Foose; and Stacy Franklin filed their class action complaint on March 15, 2013, and amended it on Nov. 4, 2013 and Oct. 14.

The plaintiffs claim E.I. Du Pont de Nemours and Company; Huntsman International LLC; Kronos Worldwide Inc.; National Titanium Dioxide Company Limited; and Millennium Inorganic Chemicals Inc. have manipulated the price of titanium dioxide since 2002.

DuPont and its competitors have held secret meetings to exchange commercial information, according to the suit.

The plaintiffs brought the lawsuit on behalf of all persons and business entities who, from Jan. 1, 2002, through the present, have purchased architectural coatings containing titanium dioxide in the United States indirectly from one or more of the named defendants, their agents and/or co-conspirators.

DuPont, Kronos and National Titanium Dioxide Company Limited, which does business as Cristel, have been accused of paint price-fixing in the past.

In 2010, consumers filed a similar antitrust lawsuit in Maryland federal court concerning the alleged price-fixing of titanium dioxide. A settlement was reached in the amount of $72 million from DuPont, $50 million from Cristal and $35 from Kronos after three years of litigation.

A hearing on the motion to dismiss is scheduled for Feb. 5.

The plaintiffs are represented by Charles F. Barrett of Charles Barrett PC in Nashville, Tenn.; Don Barrett and Brian K. Herrington of Barrett Law Group in Lexington, Miss.; Jonathan W. Cuneo, Katherine Van Dyck and Victoria Romanenko of Cuneo Gilbert and LaDuca LLP in Washington; Sandra Watson Cuneo of Cuneo Gilbert and LaDuca LLP in Los Angeles; Ben F. Pierce Gore of Pratt & Associates in San Jose, Calif.; Thomas P. Thrash of Thrash Law Firm PA in Little Rock, Ark.

The defendants are represented by Noah L. Browne, Ryan Z. Watts and James L. Cooper of Arnold and Porter LLP in Washington; Robert Hallman of Arnold and Porter LLP in San Francisco; Timothy G. Cameron, Darin P. McAtee and Evan R. Chesler of Cravath, Swaine and Moore LLP in New York; and others.

U.S. District Court for the Northern District of California case number: 5:13-cv-01180

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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