Yesterday, Judge Forrest dismissed the remaining claims in the ongoing aluminum antitrust litigation, which alleged that aluminum trading firms and warehouses conspired to increase the price of aluminum.  In August, the Second Circuit affirmed Judge Forrest’s dismissal of the claims brought by indirect purchaser plaintiffs who did not actually participate in the market that was supposedly distorted (see our previous coverage here).

Judge Forrest applied the same logic to dismiss the claims for the remaining  first level purchaser plaintiffs:

The Second Circuit determined that there can be no antitrust standing under [an “inextricably intertwined” theory] unless the defendant conspirators intend to corrupt some market in which they do not participate.  In other words, the fact that anticompetitive effects may be felt incidentally in some other market—such as the physical aluminum market—is insufficient.  The market that defendants intended to corrupt was aluminum warehouse services.  The Court then held that . . . “[plaintiffs] had to participate in the very market that the defendants directly restrained” and that this was the “[aluminum]-warehouse storage market”.  That is “where the direct, immediate impact would have been felt”.

The Court further considered and rejected arguments that the fact that the appealing plaintiffs created the “demand for physical aluminum made them inextricably intertwined” and a “necessary step” in effectuating the alleged scheme to lengthen the load-out queues.  The Court based this determination not on their market position but rather on the fact that “[a]ll of the alleged anticompetitive acts—cancelling warrants, shuttling aluminum, and slowing load-outs—were within the defendants’ power to do; they did not need or use injury to the [plaintiffs] as the ‘fulcrum’ or ‘conduit’”.  Further, the plaintiffs’ injury was “suffered down the distribution chain of a separate market, and was a purely incidental byproduct of the alleged scheme” . . . . Based on the allegations in the [complaint], it is evident that the general rationale of, as well as each of these statements by, the Second Circuit are equally applicable to the [remaining] plaintiffs’ claims here and that [the] “inextricably intertwined” basis for antitrust standing is inapplicable.

Our full coverage of the case is here.