Practice Area: Antitrust & Intellectual Property
Allegation: Price-fixing conspiracy
City of Fresno v. General Chemical Corp. et al., No. 2:16-cv-00527 (D.N.J.)
Lieff Cabraser serves as counsel for the City of Fresno in a proposed class action against Chemtrade Logistics Inc. and its affiliates alleging the company colluded with competitors to raise and fix the price of aluminum sulfate (also known as alum), a chemical used to purify water.
Frank A. Reichl, the former general manager of water chemicals at General Chemical Corp., which was bought by Chemtrade in 2014, pled guilty in a U.S. Department of Justice investigation of a price-fixing conspiracy, which prosecutors say took place from 1997 to 2010. Chemtrade admitted to investors that it had obtained amnesty in a deal with the DOJ, something it could only get after admitting its guilt.
Fresno’s complaint notes that Reichl’s indictment evidences numerous opportunities for the defendants to have communicated and conspired in the case, as those entities met regularly to discuss their business. The complaint further alleges that the defendants and their co-conspirators entered in ‘not-to-compete’ agreements, allocated customers, and submitted artificially inflated bids.
A 2013 valuation indicated that the chemical water treatment business had grown to a $5.7 billion industry. As noted in the complaint, the Justice Department has indicated that there are potentially hundreds of municipalities and pulp and paper companies that would have been adversely affected over the 13-year course of the price conspiracy.