U.S. District Judge Elizabeth Wolford Rejects $38.5 Million Price-Fixing Settlement Involving Formosa USA, Westlake Chemical, and Shin-Etsu Chemical

The purchasers, including New York-based wholesale chemical distributor Amrex Chemical Co Inc and Pennsylvania-based Main Pool and Chemical Co Inc, alleged a years-long conspiracy to fix caustic soda prices beginning in 2015.

Formosa, Westlake and Shintech did not immediately respond to requests for comment on Tuesday. Attorneys for the plaintiffs did not immediately respond to similar requests.

Formosa last year said it would pay $7.5 million to exit the case, marking the first settlement since the litigation began in federal court in Rochester in 2019. Houston-based Westlake said it would pay $19 million, and Shintech, a subsidiary of Tokyo-based Shin-Etsu Chemical (4063.T), opens new tab, agreed to settle for $12 million. None of the defendants admitted wrongdoing.

In a recent ruling, Chief U.S. District Judge Elizabeth Wolford of the Western District of New York rejected the approval of a $38.5 million class action settlement between chemical purchasers and manufacturers Formosa USA, Westlake Chemical, and Shin-Etsu Chemical.

Wolford said in her ruling that there were obstacles in determining whether certain companies, based on purchasing history, were members of the settlement class. She said that “fundamental barrier” meant she could not approve the three accords.

Wolford also said the plaintiffs had not shown “common proof to demonstrate antitrust injury on a classwide basis.”

The lawsuit alleged that the chemical companies, along with Olin Corp and OxyChem, engaged in a multi-year conspiracy to fix the prices of caustic soda since 2015. While Formosa, Westlake, and Shin-Etsu agreed to pay $7.5 million, $19 million, and $12 million respectively to settle the claims, the judge found "fundamental obstacles" in definitively identifying class members based on purchase history.

Additionally, the judge noted that the plaintiffs failed to provide sufficient "common evidence" to demonstrate antitrust injury. A hearing has been scheduled for the parties to discuss the next steps in the litigation.

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