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In a class action price-fixing suit against the top manufacturers of automotive refinishing paint, a federal judge has granted final approval of an $18.7 million settlement by Akzo Nobel Car Refinishes, a subsidiary of Dutch chemical giant Akzo Nobel NV. But the litigation continues against the other four defendants: E.I. du Pont de Nemours & Co.; Sherwin-Williams Co.; BASF Corp.; and PPG Industries. U.S. District Judge R. Barclay Surrick was assigned by the Multi-District Litigation Panel to handle all of the antitrust suits filed in the wake of news in June 2001 that the Justice Department was probing the paint industry. At the time, news accounts of the probe focused on Akzo Nobel because the company pleaded guilty in 1997 and was fined $10 million for participating in an international conspiracy to fix the price of sodium gluconate, an industrial cleaner. Two Akzo executives also pleaded guilty, confessing that they had agreed with other manufacturers to “suppress and eliminate competition in the sodium gluconate market from August 1993 to June 1995,” according to Justice Department records. Prosecutors said the two executives and their co-conspirators had set out to fix prices and allocate market share. When news broke of the Justice Department’s probe into possible price-fixing in the market for paint products used in the automotive refinishing industry, Chemical & Engineering News reported that Akzo’s most recent annual report stated that it had incurred $26 million in legal and settlement costs in the previous year, and that the company “has set aside $145 million to pay, over the next few years, ‘probable costs, fines, and civil damages’ resulting from its behavior.” Dozens of lawsuits were filed in courts around the country and were later assigned to Surrick who appointed lawyers from three Philadelphia firms to act as co-lead counsel — Warren Rubin and Tina Moukoulis of the Law Offices of Bernard R. Gross; Joseph C. Kohn and Douglas A. Abrahams of Kohn Swift & Graf; and Gerald J. Rodos and Mark R. Rosen of Barrack Rodos & Bacine. Surrick also appointed a plaintiffs’ executive committee — H. Laddie Montague and Merrill G. Davidoff of Berger & Montague; Roberta D. Liebenberg and Donald Perelman of Fine, Kaplan & Black; Michael M. Buchman of Milberg Weiss Bershad Hynes & Lerach; and Robert N. Kaplan and Richard J. Kilsheimer of Kaplan Fox & Kilsheimer. The lead lawyers later filed a consolidated suit on behalf of a class of direct purchasers — mostly auto repair shops — who had purchased products from any of the five defendants between January 1993 and December 2000. The suit alleges that during the 1990s, the price increases for auto refinishing paints continued to rise despite a drop in the prices of crude oil and natural gas — the principal raw materials used to manufacture refinishing paints. The five defendants are accused in the suit of conducting meetings in Europe in which they agreed to “fix, raise, maintain and stabilize” the prices of refinishing paints. In the 11-page opinion In Re: Automotive Refinishing Paint Antitrust Litigation, Surrick found that the $18.7 million settlement by Akzo was fair and reasonable. “This settlement compares favorably to other settlements in antitrust price-fixing class actions approved within this circuit, in that it provides for a cash payment equal to 4.2 percent of Akzo’s sales of automotive refinishing paint for the four years during the class period in which it had its highest sales totals,” Surrick wrote. Surrick noted that Akzo had a 6 percent market share and that the five defendants have an aggregate share of over 90 percent of the U.S. market for automotive refinishing paint — a market that had sales of more than $2 billion in 2000.

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