FXI Holdings, a manufacturer of furniture, bedding and other foam products, obtained the dismissal of an action alleging a conspiracy to fix prices of flexible polyurethane foam. The U.S. District Court for the District of Puerto Rico dismissed the Government of Puerto Rico’s claims that a conspiracy that was uncovered in 2010 was ongoing. The ruling is the latest victory that S&C has obtained for FXI in antitrust litigation arising out of its purchase of assets in a bankruptcy auction. The Government of Puerto Rico sought relief under the Clayton Act and asserted an unjust enrichment claim under Puerto Rico commonwealth law for $50 million.
Leading the briefing for the defense group, S&C successfully argued that the Government failed to establish any harm necessary for injunctive relief, and that the unjust enrichment claim was barred by the Puerto Rico Antitrust Act. The Court also held that the Government had no standing to assert a claim for unjust enrichment because no Puerto Rico statute expressly grants it such standing.
Previously, in 2014, S&C defended FXI in related multi-district litigation as lead trial counsel, brought in only six weeks before the first of several trials was set to begin in the Northern District of Ohio. Plaintiffs in that action sought more than $2 billion in damages and claimed that FXI was liable for an alleged price-fixing conspiracy involving Foamex International, a company whose assets FXI acquired in a 2009 bankruptcy auction. That case was resolved after U.S. District Judge Jack Zouhary granted in part FXI’s motion for summary judgment, holding that FXI should not be charged with a seller’s pre-existing liabilities. After the favorable ruling, FXI settled with the remaining opt-out plaintiffs.
The S&C team is led by Michael Steinberg and Adam Paris.