(CN) - A large Texas steel producer will pay $4 million to settle claims that it conspired with other competitors to fix prices and coordinate production reductions.
Standard Iron Works had filed the proposed federal class action in 2008 against Commercial Metals Co. and eight other major steel producers: Arcelormittal, Arcelormittal USA, United States Steel Corp., Nucor Corp., Gerdau Ameristeel Corp., Steel Dynamics, AK Steel Holding Corp. and SSAB Swedish Steel Corp.
It claimed the companies had fixed steel prices since January 2005, leading to "unusual and supracompetitive profits."
"Defendants met with each other to discuss the need to impose industry production 'discipline' and to 'adjust their production rates so the price of steel doesn't drop,'" the complaint stated. "These and other calls to arms and pledges by and between Defendants were followed with action: massive, coordinated and unprecedented market downtime, i.e., idling and/or reducing production of steel products. By acting in concert pursuant to their conspiracy, defendants removed substantial amounts of steel products from the market, which caused prices artificially to rise."
In reaching the settlement, Irving, Texas-based CMC said $4 million is less than its anticipated cost of continuing to defend the suit.
It admits no liability in the settlement.
"Despite the company's belief, after extensive discovery and investigation of the facts, that the claims lack merit and that it has full and complete defenses to all of the claims asserted against it, the company agreed to enter into the settlement to avoid further expense, inconvenience, and distraction of burdensome and protracted litigation," CMC said in a statement on Friday.