Furniture makers claim price-fixing on foam products

By Patsy R. Brumfield/NEMS Daily Journal

TUPELO – Five North Mississippi furniture manufacturers claim they’ve suffered financial losses from an alleged price-fixing conspiracy.
They’ve filed a lawsuit in U.S. District Court, and within it say that the FBI raided the offices of some of the 11 defendants in July.
The raids, they claim, were in connection with a “multi-jurisdiction investigation into the pricing practices of polyurethane foam products.”
The European Commission, they note, also conducted similar raids in 2010 at some defendants’ offices in Europe.
Filing the lawsuit are H.M. Richard Inc., Foamco Sales Inc., Prime Designs Inc., Legends Inc. and Houston Foam Fabricators Inc.
They are represented by Tupelo attorneys Don O. Gleason Jr. and W. Lawrence Deas.
The companies they accused of price-fixing are Hickory Springs Manufacturing Co., Valle Foam Industries Inc., Domfoam International Inc., The Carpenter Co., The Woodbridge Group, Flexible Foam Products Inc., Scottdel Inc., Foamex Innovations Inc., Future Foam Inc., Vitafoam Products Canada Ltd., Vitafoam Inc. and John Doe Defendants 1-10.
The lawsuit was filed Friday and none of the defendants has answered it yet. Total claims may reach into the $100 million category.
The Daily Journal was unable to contact corporate spokesmen for area businesses Carpenter and Foamex for comment on the lawsuit.
The plaintiffs claim the defendants violated the Sherman Anti-Trust Act and the Clayton Act. They ask for a jury trial and for triple damages with interest, as well as orders to the companies to stop their pricing conduct.
The lawsuit says the scheme began as early as Jan. 1, 1999, and that by February 2010, Vitafoam turned itself in to the U.S. Department of Justice “to report antitrust violations” in its industry.
Vitafoam also sought to get into DOJ’s Corporate Leniency Program, which would provide it with some level of diminished penalties.
Similar cases reportedly were filed in North Carolina and moved to a Cleveland, Ohio, federal court so that the lawsuits around the country could combine into a multi-jurisdictional case.
The trade publication plasticnews.com reported in October that the Stroud Group Inc., representing a group of foam buyers across the United States, brought an action for “damages and injunctive relief” against almost all North American foam makers, alleging price-fixing of polyurethane foam and polyurethane foam products.
Its defendants are the same as those in the North Mississippi lawsuit.