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District Court Denies Snap Judgment In Fasteners Class Action

Posted  August 31, 2011

The U.S. District Court for the Eastern District of Pennsylvania has denied a motion in the In re Fasteners Antitrust Litigation class action to dismiss antitrust claims alleging that YKK and other fastener manufacturers engaged in price fixing.

Defendants sought dismissal of the claims on grounds of statute of limitations and lack of evidence.

The class action was filed in May 2010, by apparel manufacturers who alleged that YKK, Scovill Fasteners, Coats, and the Prym Group conspired to fix prices and allocate customers in the market for fasteners, a category which includes zippers, buttons, snaps, and hooks. From the early 1990’s through 2007, defendants allegedly participated in meetings to discuss prices, divide markets, and share business information.

U.S. apparel manufacturers began alleging illegal activity by the fastener manufacturers after a 2007 announcement by the European Commission fining the defendants for cartelizing the European and worldwide markets.  This finding caused over 35 suits to be filed in U.S. District Courts between 2007 and 2010.  The individual suits were consolidated into the class action.

Plaintiffs allege that the defendants concealed their conspiracy and due diligence would not have led class members to its discovery.  The class contends that there should be an equitable tolling of the statute of limitations until 2007, when they were made aware of the cartel by the European Commission’s announcement.

While the District Court did not grant the motion to dismiss based on the statute of limitations, the claims could still fail on that ground if a determination on the merits results in a denial of equitable tolling.  The District Court also found that the class sufficiently pled the existence of a conspiracy and antitrust injury.

Tagged in: Antitrust Litigation, Price Fixing,