A group of about 5,500 manufacturers,
metal fabricators and others
who bought steel from eight American steelmakers about a decade ago have announced
a $30 million deal with three of those mill operators – a settlement the
parties intend would cap off a massive antitrust class action lawsuit accusing the steelmakers of manipulating supply to boost prices for their
On Oct. 17, the
plaintiffs filed a motion in Chicago federal court, asking U.S. District Judge
James B. Zagel to preliminarily sign off on the settlement deal with defendants
Nucor Corporation, Steel Dynamics Inc. and SSAB Steel Corporation.
Under the proposed agreement, Nucor, of Charlotte, N.C.,
would agree to pay the plaintiffs $23.4 million; Steel Dynamics, of Fort Wayne,
Ind., would contribute $4.6 million; and SSAB Steel, of west suburban Lisle,
would pay $2 million to settle the claims.
Of that total, about one-third would go to plaintiffs’
attorneys, according to a memorandum filed in court in support of the
Named plaintiffs in the litigation including Standard Iron
Works; Wilmington Steel Processing Co.; Capow Inc., which does business as
Eastern States Steel; Alco Industries; and Gulf Stream Builders Supply. Court
documents indicated the settlement would include payments to an additional
5,500 plaintiffs’ class members who purchased steel products from the mills
Attorneys for the plaintiffs and the class included Michael
J. Guzman and Thomas W. Traxler Jr., of the firm of Kellogg, Huber, Hansen,
Todd, Evans & Figel, of Washington D.C., and Jeffrey S. Istvan, Matthew
Duncan and Adam J. Pessin, of the firm of Fine, Kaplan and Black, of
According to the filing, the settlement would bring the
total of all settlements stemming from the antitrust lawsuit to nearly $194
The settlement deals stemmed from lawsuits launched first in
2008 by Standard Iron Works in Chicago federal court, and later by the other
In addition to Nucor, Steel Dynamics and SSA Steel, defendants
named in the actions included steelmakers Chicago-based ArcelorMittal, as well
as U.S. Steel, of Pittsburgh; Gerdau Ameristeel Corporation, of Tampa, Fla.; AK
Steel, of West Chester, Ohio; and Commercial Metals Company, of Irving, Texas.
Under previous settlement deals, ArcelorMittal agreed to pay
$90 million, while U.S. Steel signed off on a $58 million deal. Gerdau agreed
to pay $6.1 million; AK Steel, to pay $5.8 million; and CMC, $3.99 million. The
court granted final approval to those deals in October 2014.
However, in the two years since, the litigation continued
against Nucor, Steel Dynamics and SSAB.
The lawsuits alleged ArcelorMittal and the other defendants,
who collectively control about 80-85 percent of the steel made in the U.S.,
conspired, beginning in 2005, to coordinate mill shutdowns to reduce supply and
raise prices for the raw steel products needed by fabricators and other
In 2005, for instance, the mills’ “downtime” resulted in
prices for steel products increasing by as much as 25 percent. The allegedly
coordinated supply-pinching activities, which allegedly continued from
2006-2008, purportedly also led to supply shortages and supply “allocation”
policies in the years following, as manufacturers reportedly struggled to
obtain the steel they needed.
And the resulting high steel prices allegedly led to big
profits for the producers. According to the 2008 lawsuits, Nucor, for instance,
reaped earnings totaling $6.2 billion from 2005-2007, while its stock value
surged from $25 per share in 2005 to $83 per share in 2008.
The settlement deals do not specify how much money each
plaintiff or class member might receive. However, the settlement documents
indicated the plaintiffs intended to ask the court to agree to a plan under
which plaintiffs and class members would each receive a share of the net
settlement funds proportional to how much they paid the steelmakers from
Nucor was defended in the action by the firms of Arnold
& Porter, of Washington, D.C.; Winston & Strawn, of Chicago; and Wiley
Rein, of Washington, D.C.
Steel Dynamics was represented by the firm of McDermott Will
& Emery, with offices in Chicago and Washington, D.C.
SSAB Steel was defended by the firm of Sidley Austin LLP, of