Volume 11, Issue 2 - March/April 2009

AGR Reports
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Judge Denies Motion to Dismiss Price-Fixing Lawsuit

TA U.S. District Court judge recently denied a joint motion by several glass manufacturers to dismiss a class-action anti-trust suit filed against them alleging that they agreed to raise and fix prices “through a combination of collusive energy surcharges and price increases.” The glass manufacturers included in the suit are AGC America Inc., AGC Flat Glass North America Inc., Guardian Industries Corp., Pilkington North America Inc., Pilkington Holding Inc. and PPG Industries.

According to court documents, the manufacturers involved argued that the complaint should be dismissed “because the various allegations therein are insufficient under the pleading standard … to infer the existence of an agreement or conspiracy to restrain trade.”

Specifically, the recent order denying the motion notes that the defendants argue that they did not make any sort of agreement, that the allegations of parallel energy surcharges are “insufficient”; that the allegations of parallel price increases by some defendants are insufficient; that the allegations of participation in trade associations are insufficient; that the allegations of defendants’ profitability are insufficient; that the allegations of miscellaneous suspicious statements are insufficient; and that the allegations regarding “European misconduct” are insufficient.

In addition, PPG specifically argued that it should be removed from the case, as it was not named in the 2007 EU report.

The judge points out, however, that the complaint alleges that “there was a history of inability to raise and maintain prices” prior to the period covered by the complaint, July 1, 2002, through December 2006. He also notes that the complaint alleges that there was a history of varying surcharges by region up until June 2002, but afterwards this variation ceased.

“Rather, the CAC [Consolidated Amended Complaint] alleges an agreement that existed for over thirty months beginning in June of 2002, by raising prices by identical percentages and charging energy surcharges in virtual lockstep while providing customers with identical charts and justifications for the same, until February of 2005, when the European Commission launched raids upon the European construction flat glass market. Thereafter, the Defendants did not engage in lockstep parallel conduct,” the judge writes. “Thus, contrary to Defendants’ position, this is not a case where Plaintiffs rely solely on the decision of the European Commission to assert a domestic conspiracy or a solely parallel conduct case. Therefore, dismissal of the CAC is not warranted based on Defendants’ EC allegation arguments and arguments of parallel conduct.”

The judge also notes that while membership in trade associations does not necessarily suggest conspiracy, that “the meeting dates provide the Defendants with notice of specific time frames and manner of the alleged agreement.”

Finally, as to PPG’s request to be removed from the case, the judge writes, “It is of no moment that PPG did not participate in the European conspiracy. The CAC is not simply asserting a theory of ‘since it happened there, it happened here.’ To the contrary, as set forth above, the CAC sets forth sufficient allegations, when read in toto, to set forth a claim.”

Named plaintiffs in the case include Colonial Glass Solutions, Burhans Glass, John Draper (of Draper’s Auto Glass), Perilstein Glass Corp., Diversified Glass Services, Gilkey Window Co., Maran-Wurzell Glass & Mirror, E & G Auto Parts Inc., Superior Glass Inc., Frank’s Glass Inc., Greenwood Glass Co., Public Supply Co., Raymond’s Glass Inc., Bailes Granite & Marble, Thermo Twin Industries Inc., Sellmore Industries Inc., Interstate Building Materials, Wally’s Glass Service Inc., Head West Inc., D & S Glass Services Inc., G&C Auto Body Inc., Girard Glass Corp., Fast Glass Service, Century Bathworks Inc. and No Job Too Small Inc.

Several similar suits were filed in late 2007 and early 2008, after the European Union (EU) levied fines on several flat glass manufacturers for alleged price-fixing practices. In June 2008, approximately 20 of these suits were consolidated in the Western District, where the recent order was issued.

AGC Flat Glass North America Says It’s Well-Positioned to Meet Market Demands

In response to a continuing downturn in the U.S. marketplace for flat glass, particularly in the automotive sector, AGC Flat Glass North America ceased glassmaking operations at its float glass manufacturing facility in Bridgeport (Jerry Run), W. Va., in early February, affecting approximately 232 employees. The Jerry Run location primarily served the automotive market. In addition, the company also temporarily reduced its workforce by 100 employees at its pattern glass plant located in Kingsport (Blue Ridge), Tenn. According to Chris Correnti, AGC vice president, general counsel and secretary, despite the plant closing and the layoffs, the company is still well-positioned to meet market demands.

“We still have inventory in the Jerry Run plant that we will continue to ship as the market demands. We are also positioned to bring assets back as we need to,” Correnti says, referencing the company’s float line in Greenland, Tenn., that it shut down last April as well as its plant in Victorville, Calif., that it closed last August. “As demand grows we have those other lines that we can bring back. Even in West Virginia, we have those assets that we can bring back as the market justifies the need.”

As a result of the plant closing, customers can expect to see little change in the way they placed orders. According to Correnti, all orders are processed through a centralized order-entry system so orders will now be routed to one of the company’s other manufacturing locations. He says customers can still call on the company’s inside sales team or their outside sales rep with questions.

No changes to transportation/shipping costs are expected as a result of the plant closure.

Amidst these layoffs and plant closures, in February AGC’s parent company, Asahi Glass Co. Ltd. and its European subsidiary, AGC Automotive Europe SA, have confirmed that they will pay the $147.9 million ($113.5 million euro) fine imposed by the European Union (EU).

In addition, the company has made several changes in order to comply with the EU’s rules on competition. According to a statement issued by the company, as part of this, several new managers have been appointed; the company is working to reinforce education about anti-trust laws; and certain senior executives of Asahi Glass have voluntarily returned some of their directors’ fees “to show each employee of the company how much [sic] seriously the management of the company is considering the need to thoroughly implement compliance with the laws, and the importance of sharing such values for the benefit of all members of the group and its stakeholders.”

Restoration Auto Glass Owner Authors Blog

AGRR magazine/glassBYTEs.com™ is linking to a new blog, “From Where I Stand,” by Clint Hanson, the president and owner of Restoration Auto Glass in New Brighton, Minn. Hanson, who started his own business eight years ago, will write on issues of importance to auto glass shop owners and his own experiences in the business.

Industry Closings
A number of industry manufacturers and suppliers have announced closings of plants in recent months. See the chart below for a summary of these.

AGC Flat Glass North America
Location: Bridgeport, W.Va., plant
Effective Date: Early February

Pittsburgh Glass Works
Location: Evart, Mich., plant
Effective Date: March

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