Class Action Against DuPont Initiated By Axiom Plastics

Axiom Plastics initiates Ontario class-action
Dec 07, 2007 04:30 AM Tony Van Alphen
Business Reporter

An Ontario judge is allowing a class-action lawsuit to proceed to trial against E.I. DuPont Canada Co. for alleged price fixing in the country's auto-parts sector.

Madam Justice Alexandra Hoy of the Ontario Superior Court of Justice has issued an order to certify the suit that Aurora-based Axiom Plastics started on behalf of makers of plastic auto parts last year.

DuPont said yesterday it was disappointed with the decision and is appealing it.

"It continues to be our position that the claims are baseless, and that they do not reflect the manner in which DuPont and our employees conduct business," the company said in a statement.

David Sterns, a lawyer for Axiom, said the company intends to prove at trial that uncompetitive prices have hampered the company and auto-parts makers in the international market.

The statement of claim alleges DuPont, a subsidiary of the international research and material manufacturing giant, broke the federal Competition Act through arrangements with resin distributors.

The claim, which has not been proven in court, said DuPont used "a system" designed to increase prices of high performance resins, a key ingredient in the production of plastic auto parts.

Axiom charged that it paid higher prices to DuPont's distributors and could not negotiate lower prices from other suppliers for similar products under the system.

In court, DuPont denied there is a system and called the arrangements "preferential prices."

The company argued Axiom's allegations relate to exclusive dealing and should be handled by the government's competition tribunal.

Axiom, a small producer of plastic components, won a legal battle against a major subsidiary of auto parts giant Magna International Inc. in 2005.

The company gained a court order for an interim injunction that prevented the Magna subsidiary from terminating 40 contracts until a trial resolved a dispute between them.

Axiom had sued the Magna subsidiary for allegedly breaching the contracts. It sought the injunction to force the subsidiary to honour the contracts until the suit is heard.

A trial has not started in that case.

In ruling for the injunction, a judge said the Magna subsidiary did not give reasonable notice of the contract cancellations, which could have put Axiom out of business.