A group of American farmers recently filed a national class-action lawsuit against Premier Chemicals, Sumitomo Corporation of America, and YAS for allegedly conspiring to fix prices of magnesium oxide that forced farmers and ranchers to overpay millions of dollars.
Filed on October 18, 2010 on behalf of the plaintiffs by Seattle-based Hagens Berman in the US District Court of New Jersey, the suit claims Delaware-based Premier Chemicals, New York-based Sumitomo, and New Jersey-based YAS routinely met to control the price of magnesium oxide.
Magnesium oxide is used in two forms: Caustic magnesium oxide, typically combined with animal feed given to cattle and sheep, and dead-burned magnesium oxide, which is blended with fertilizers to increase nutrients in farming soil.
Routine market discussions
According to the complaint, the defendants routinely discussed portioning the market for the chemical product.
The US and China are the world's leading producers of caustic and dead-burned magnesium oxide.
In 2000, Premier controlled the majority of the domestic market for caustic magnesium oxide and purchased dead-burned magnesium oxide from Chinese suppliers.
When Premier started to see its market share shrink due to increased competition from China, the company began talks with other leading chemical suppliers, including Sumitomo and YAS, to set the price of caustic and dead-burned magnesium oxide in the US, the lawsuit charges.
The suit accuses the defendants of violating state and federal trade laws by entering into an agreement that artificially restrained commerce and manipulated prices of magnesium oxide.
Attorneys are asking the court to provide relief to indirect purchasers of magnesium oxide, and request that these companies stop engaging in anti-competitive practices.