Metal Warehouse
One of the warehouses contracted out by Goldman Sachs' warehouse subsidiary Metro International Trade Services is seen in Detroit, in July 2011. Reuters

Lawsuits accusing Goldman Sachs, JPMorgan, their metal warehousing businesses and the London Metal Exchange (LME) of intentionally limiting aluminium supplies and driving up the metal's prices in the US are to be heard in New York.

Twenty-six federal cases have been filed accusing the defendants, in various combinations, of violating US antitrust laws. While most cases were brought in Detroit, others are pending in New York, Los Angeles, New Orleans and elsewhere in the US.

Arguments supporting each location as fitting for pretrial exchanges of evidence and depositions were made before the US Judicial Panel on Multidistrict Litigation on 5 December in Las Vegas. That panel picked New York on 16 December.

The cases would be handled by US District Judge Katherine B. Forrest in Manhattan. The panel called her "a jurist well-versed in the nuances of complex antitrust litigation."

"The forum has significant connections to the litigation in as much as defendants JPM and Goldman Sachs are headquartered there," the judges said, reported Bloomberg. "Numerous decisions regarding alleged anticompetitive conduct in the market for aluminium likely were made in this district."

"The center of gravity in the US, if it's anywhere, is in New York," attorney Margaret Zwisler argued before the panel for JPM and the LME. "The issue here is who made the rules and how were they made."

Goldman Sachs gave up its right to argue.

Detroit Repository

The restraint of trade "emanated" from Detroit, where 75% of the warehoused aluminium in the US is kept, attorney Christopher Lovell, who filed the first of the lawsuits on 1 August for Michigan-based aluminium fabricator Superior Extrusion, told the Las Vegas panel.

Detroit is the world's second-largest storage area for aluminium stockpiles, monitored by the LME, the world's largest industrial metals marketplace.

Goldman Sachs's Metro International Trade Services has the highest number of LME-approved warehouses in the city. JPM's metal warehousing business is called Henry Bath & Son.

Delays of as long as 16 months in executing orders raised prices for makers of beverages, flashlights, outdoor porch screens, and other products that need aluminium, according to the complaints.

Goldman Sachs spokesman Michael DuVally and JPM spokesman Brian Marchiony have both said the cases are without merit.

The case is In Re Aluminum Warehousing Antitrust Litigation, MDL No. 2481, Judicial Panel on Multidistrict Litigation (Las Vegas).