S&C Scores Second Circuit Win for Goldman Sachs in Aluminum Warehousing Class Action

August 9, 2016

S&C successfully represented Goldman Sachs before the U.S. Court of Appeals for the Second Circuit, persuading the court that commercial and consumer end users plaintiffs lacked standing in the In Re: Aluminum Warehousing Antitrust Litigation. Plaintiffs alleged that defendants conspired to intentionally hold aluminum in warehouses for extended periods of time, thereby raising the costs of metal storage and the price of aluminum to buyers. On appeal, while the court affirmed the lower court's ruling that indirect purchasers lacked standing, its legal basis differed from that of the district court. The Firm successfully persuaded the Second Circuit to adopt a narrow interpretation of the Supreme Court's Blue Shield of Virginia v. McCready exception to the market-participation requirement where plaintiffs' injuries are “inextricably intertwined” with the injuries of market participants. The Second Circuit held that the commercial and consumer end users of aluminum products were not utilized by the defendants to inflict competitive injury in the allegedly retrained warehouse market and therefore do not have standing to sue over the alleged overcharge. The Second Circuit's clarification will likely affect an increasing number of antitrust actions that allege a complex scheme affecting multiple different markets.

The S&C team advising Goldman Sachs was led by Mr. Pepperman and Ms. Han.