Price-Fix Lawsuit Partially Settled

Several Cleveland-area scrap dealers will pay more than $10 million to settle a class-action lawsuit alleging a conspiracy to fix prices in the scrap metal market.

M. Weingold & Co. and related firms including Harry Rock & Associates have agreed to pay $9.9 million. Bay Metal Inc. has agreed to pay $300,000 initially and make additional payments equal to 55 percent of its net income for three years, up to a maximum of $900,000. The money will go into a fund to pay scrap sellers who were harmed by the conspiracy.

The companies also have agreed to cooperate in the prosecution of other defendants who have not settled, said Edmund Searby, a lawyer who represents lead plaintiffs Lincoln Electric Co. and Profile Grinding Inc. in the lawsuit.

U.S. District Judge Kathleen O'Malley, who gave preliminary approval to the settlements last month, will hold a fairness hearing on Aug. 19 to determine whether they should get final approval.

But whether the settlements with Weingold and Bay Metal are approved, litigation will continue against the other defendants who have not settled, the court said.

Lincoln and Profile had filed the lawsuit in late 2002, alleging a conspiracy to fix scrap prices, allocate customers and rig bids, which artificially lowered prices for scrap sellers. The companies based their case on a federal antitrust investigation that uncovered a conspiracy among several Cleveland-area scrap dealers to fix prices and rig bids from 1992 to 2000.

On March 31, O'Malley certified the suit as a class action.

The case applies to anyone who sold industrial scrap metal in Northeast Ohio and surrounding counties, including Ashtabula, Cuyahoga, Lake, Lorain, Medina, Stark and Summit, to defendants between December 1992 and March 2000.

The civil case is separate from a criminal case involving defendants Jack Weingold and two of his companies, and an employee, Loren Margolis. That case is expected to go to trial on Oct. 5. They were indicted in January on charges of conspiring to allocate scrap metal suppliers and rig bids for buying scrap metal.