Class action lawsuit against EI Dupont Canada over alleged price fixing of resions
2008/02/18

Axiom Plastics Inc. of Aurora, Ontario has sued DuPont Canada for alleged breaches of the Competition Act, RSC 1985, c. C-34 in relation to the manner in which prices of DuPont engineering resins are established. DuPont's engineering resins include resins sold under the names: Delrin, Zytel, Zytel HTN, Minlon, Hytrel, Rynite and Crastin.

The plaintiff claims that DuPont Canada has utilized a system, known as the Credit Upon Proof of Sale system, in order to enhance and maintain the price of engineering resins sold to moulders which manufacture parts for the automotive industry. The lawsuit covers sales of resins to moulders directly by DuPont Canada and indirectly through DuPont Canada's three authorized distributors: Canada Colors and Chemicals Limited, Ashland Canada Inc., which operates as General Polymers, and PolyOne Distribution Canada Ltd. DuPont Canada denies the plaintiff's claim. No court has ruled on whether the claim will succeed at trial.

On August 27, 2007 the Ontario Superior Court of Justice granted an order allowing the action to proceed as a class action.

The formal Court Order has not yet been issued by the court. Counsel expect the Order to be finalized within the next few weeks, after which time all members of the proposed class will receive formal Notice.

Further information about this lawsuit will be posted on this website.

The claim is being brought by the law firm of Sotos LLP in conjunction with McCarthy Tétrault LLP.

For more information on the case, please contact David Sterns at dsterns@sotosllp.com 416.977.5333 ext 313 or John Sotos at jsotos@sotosllp.com 416.977.5333 ext 303.

Attached are important documents relating to this lawsuit.

DuPont accused of price fixing in Canada
By Christopher Cundy 14/02/2006 (PRW.com)

Engineering polymer supplier says claims are ‘baseless’.

14 February 2006 – A Canadian moulder has begun legal action against DuPont, claiming the engineering polymer supplier has been fixing the prices of Delrin and Zytel resins in conspiracy with Tier 1 automotive suppliers.

Lawyers representing Axiom Plastics have filed a class action lawsuit on behalf of all Tier 2 plastics processors in Canada. In a statement posted to the Ontario courts in December, it alleges that DuPont linked with Tier 1 suppliers so that Tier 2 moulders were forced the to use DuPont materials.

According to the claim, DuPont would fix prices for its resins with its authorised distributors. Tier 1 suppliers would monitor the purchase volumes among Tier 2 suppliers and anyone suspected of buying from outside the authorised routes would be reported to DuPont. For their troubles, the Tier 1 suppliers would receive a kickback from DuPont.

DuPont has rejected completely the claims contained in the action initiated by Axiom Plastics. In a statement the company said: “Quite simply, the claims are baseless. The picture of DuPont that they present is contrary to the facts, and does not reflect the manner in which the company and our employees strive to conduct business. We intend to defend ourselves vigorously.”

The court will consider within the next few months whether the action can proceed to the next stage.

Case filed against E.I. Dupont Canada alleges price fixing
Canadian Plastics,  2/6/2006

By Tom Venetis, Editor

The first steps have been taken in the Ontario Superior Court of Justice that could see E.I. DuPont Canada Company involved in a class action lawsuit alleging the giant manufacturer and distributor of engineering resins engaged in price fixing. On December 15, 2005 Axiom Plastics Inc. filed a proposed class action, the first step in a possible class action lawsuit, on behalf of all Canadian Tier Two plastics processors, alleging DuPont engaged in actions that artificially inflated the price of its certified engineering resins. These resins are used by Tier Two plastics processors in Canada in the manufacture of plastic parts, many of which are used by Tier One automotive suppliers. The case is currently at the certification stage where a judge will decide if the case meets certain criteria for it to become a class action lawsuit. That will likely be decided in around three months time. Specifically, Axiom is bringing the claim on behalf of "All purchasers in Canada since January 2000 of engineering resins, including Delrin and Zytel brand engineering resins, from E.I. DuPont Canada Company or its authorized Canadian distributors for use in parts manufactured by such purchasers for supply to a Tier One automotive manufacturer." As well, the claim by Axiom alleges DuPont arranged with others to not only keep the prices of engineering resins artificially high, but to prevent or lessen the ability of the Tier Two plastics processors to find alternative and less costly sources for DuPont's certified engineering resins. This is alleged to be contrary to Canada's Competition Act, although none of the allegations in the claim have yet been proven in court. 

The lawsuit further alleges DuPont entered into arrangements with certain Tier One manufactures that would require their Tier Two plastics processors to only use engineering resins supplied by DuPont or its distributors at the artificially high prices. In doing so, DuPont would then secretly remit to the Tier One manufacturers substantial monies, or kickbacks, as a result of the price fixing. "This claim is geared towards obtaining compensation for what we allege is a long-standing practice of improper price inflation of engineering resins to the Tier Two suppliers," said David Sterns, a lawyer with Sotos LLP in Toronto who is representing Axiom Plastics in the claim. "We are also hoping that it will change the way resin prices are imposed upon the Tier Two suppliers going forward." Roger Goodman, public affairs manager for E.I. Dupont Canada in Mississauga, Ont. said the company rejected the claims contained in the action initiated by Axiom.

"Quite simply, the claims are baseless," Goodman added in a statement. "The picture of DuPont that they present is contrary to the facts, and does not reflect the manner in which the company and our employees strive to conduct business. We intend to defend ourselves vigorously."

Perry Rizzo, president of the Aurora, Ont.-based Axiom Group Inc., of which Axiom Plastics Inc. is a division in Axiom Group, said he declined to comment as the case is before the court.

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