Lieff Cabraser Heimann & Bernstein, LLP

Introduction

On April 12, 2010, Plaintiffs Haley Paint Company and Isaac Industries, Inc. (“Plaintiffs”), filed their Consolidated Complaint in a class action lawsuit against Defendants E.I. Dupont De Nemours and Co., Huntsman International LLC, Kronos Worldwide Inc., Millennium Inorganic Chemicals, Inc., and The National Titanium Dioxide Company Ltd. (collectively, “Defendants”) alleging a conspiracy to fix, raise, and maintain the price of titanium dioxide in the United States in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.

Titanium dioxide, a dry chemical powder, is the world’s most widely used pigment for providing whiteness, brightness, and opacity to many products, particularly paints and other coatings. Defendants are the leading suppliers of titanium dioxide in the world, and control approximately 70% of the global production capacity. Titanium dioxide has few competitive substitutes, and demand for it tends to be inelastic. 

Class Definition and Period

Plaintiffs filed the action on behalf of themselves and a proposed class consisting of all persons and entities who purchased titanium dioxide in the United States directly from one or more Defendants between March 1, 2002, through the present (hereinafter referred to as the “Class Period”).

Plaintiffs’ Factual Allegations

As set forth in the Complaint, prices for titanium dioxide increased in the late 1990s, but fell significantly in 2001. Plaintiffs allege that, as a result of declining prices and declining demand, Defendants were motivated to reach, and did reach, an agreement or understanding in or about early 2002 to increase prices and improve margins in the industry.

On January 24, 2002, a titanium dioxide industry meeting took place in Finland. Shortly thereafter, and in spite of flat or declining demand for titanium dioxide, Defendants and their co-conspirators announced price increases to be effective March 1, 2002. Further price increases were announced and implemented in the summer of 2002.

The following year, Defendants attended a titanium dioxide conference in Miami, Florida.  At the conference, the former Vice President of Defendant Millennium specifically told attendees to expect further price increases. Over the next several years, Defendants attended numerous other meetings and conferences that corresponded to titanium dioxide price increases. 

The Complaint alleges that the parallel price increases occurred due to anti-competitive conduct despite declining demand, decreasing raw material costs, and industry overcapacity.  

The Complaint charges that Defendants’ conspiracy was monitored and policed: (a) through discussions with each other, industry consultants, and customers; (b) through an industry publication that contained detailed production, pricing, capacity, raw material, and other data; (c) by routinely sending price increase announcements to customers served by other Defendants, thereby confirming their assent to increases, and (d) not competing aggressively for each other’s customers.  

Case Status

On March 29, 2011, U.S. District Court Judge Richard D. Bennett denied certain Defendants’ motions to dismiss the action. The Court held that Plaintiffs met their burden at the pleading stage of the litigation to allege a conspiracy that is plausible: “their Consolidated Amended Complaint provides a sufficiently plausible case of price fixing so as to allow discovery to proceed.”

Joseph Saveri, Chair of the Lieff Cabraser Antitrust practice area, commented, "We look forward to proving at trial that the world's largest manufacturers of titanium dioxide entered into a price-fixing conspiracy and obtaining substantial relief under the federal antitrust law for the economic injuries the named plaintiffs and class members suffered as a result of the supracompetitive prices they paid to the members of the cartel."

Contact Lieff Cabraser

Federal and state antitrust laws are designed to protect the economy and to promote competition among businesses by prohibiting price-fixing and other forms of anticompetitive conduct. Individuals, businesses, public agencies and other entities that have purchased titanium dioxide are welcome to contact a Lieff Cabraser attorney, without charge or obligation, for further information on the litigation.