Caustic Soda Class Action Accuses Makers Of Price-Fixing

Amrex Chemical Company has filed a class action lawsuit against the makers of caustic soda, a chemical used as a base or neutralizing agent in a number of manufacturing processes.

Amrex, a small chemical distributor, claims that large caustic soda producers have illegally colluded to fix the price of this chemical.

The caustic soda price-fixing class action lawsuit states that “caustic soda is consumed by customers in a variety of industries, including paper, pulp, and cellulose; chemical production; soaps and detergents; aluminum; food processing; water treatment; textiles, mineral oils; recycling; and pharmaceuticals.”

Amrex Chemical alleges that small distributors were damaged by the large chemical companies’ actions. Amrex is seeking for the alleged cartel to be forced to dissolve.

The large caustic soda producers accused of colluding to fix caustic soda prices are Olin Corporation, K.A. Steel Chemicals Inc., Occidental Petroleum Corporation, Occidental Chemical Corporation (d/b/a OxyChem), Westlake Chemical Corporation, Shin-Etsu Chemical Co. Ltd., Shintech Incorporated, Formosa Plastics Corporation, and Formosa Plastics Corporation U.S.A.

According to Amrex’s caustic soda class action lawsuit, together, the large companies control around 90 percent of the caustic soda market in the United States, so they have significant power to influence the caustic soda market.

Allegedly, the companies conspired to restrict the supply of caustic soda on the market, allocate consumers to different suppliers, and then raise prices of the product.

The caustic soda price-fixing class action claims these actions violate antitrust laws that are aimed at curbing behavior deemed as “anticompetitive.” Amrex asserts that the price-fixing scheme began in 2015.

Amrex asserts that as a result of the collusion between Formosa Plastics, Occidental Chemical, Olin, Shintech, and Westlake Chemical, caustic soda prices have increased by more than 50 percent.

The caustic soda class action states that the chemical touches many industries, because it is versatile and used in many manufacturing processes.

Allegedly, from around 2012 to the fourth quarter of 2015, caustic soda prices were either declining or flat.

According to Amrex, the industry margins were poor because there was an industry overcapacity of the product but the demands were flat.

The caustic soda class action states that these conditions are what motivated the large companies to conspire to raise prices and then fix them in the caustic soda market, starting with the restriction of supply.

This restriction then allegedly enabled the companies to “fix, raise, maintain, and stabilize the price at which caustic soda was and continues to be sold.”

“They also at times refused to supply customers, put them on allocation, or refused to bid on contracts while falsely claiming that supply was tight or scarce,” the caustic soda class action states.

Amrex asserts that the actions to collude and fix caustic soda prices were carried out through secret agreements and the exchange of information that was not available to the public. Allegedly, the companies intentionally worked together to manipulate the price index for caustic soda.

The caustic soda class action accuses the companies of using their power in the market to go from “passive members of an oligopoly to active coordinators of supply and pricing.”

Amrex is represented by Marco Cercone, R. Anthony Rupp II, and Arthur N. Bailey of Rupp Baase Pfalzgraf Cunningham LLC, and by Robert N. Kaplan, Jeffrey P. Campisi, and Matthew P. McCahill of Kaplan Fox & Kilsheimer LLP.

The Caustic Soda Price-Fixing Class Action Lawsuit is Amrex Chemical Co. Inc. v. Olin Corporation, et al., Case No. 1:19-cv-00386, in the U.S. District Court for the Western District of New York.

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If your business has purchased caustic soda since 2015, you may have been affected by this alleged price-fixing scheme. Participating in this free caustic soda price-fixing class action lawsuit investigation may help you get compensation.

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This article is not legal advice. It is presented
for informational purposes only.