Masco Corp., which was scheduled to go to trial on July 23 in a class-action suit filed by insulation installers, has decided to settle the case for $75 million, according to a July 26 filing with the Securities and Exchange Commission (SEC). The Taylor, Mich., firm, one of the nation’s largest installers of insulation, issued the following statement in its filing:
“While we continue to deny that the challenged conduct was unlawful, and we do not admit to any wrongdoing, this business decision eliminates the considerable expense and uncertainty of continued litigation and is in the best interest of the company and its shareholders.”
The settlement, which releases Masco from all claims outlined in the lawsuit, ends an eight-year legal saga that swept up four of the major players in the insulation industry. Columbus Drywall vs. Masco Corp., filed in U.S. District Court in Atlanta, involved 377 residential insulation contractors who claimed that Masco conspired with four manufacturers -- CertainTeed Corp., Guardian Building Products, Johns Manville and Knauf -- to fix prices. (The plaintiffs also claimed that Owens Corning was also allegedly part of the conspiracy but did not name the company in the lawsuit because it was in bankruptcy at the time.)
According to the lawsuit, Masco agreed to accept price increases from the four large manufacturers as long as its smaller competitors paid an even higher price for the same products. Masco also enabled the manufacturers to exchange information about pricing between 1999 and 2003, according to the plaintiffs.
Four of the defendants, CertainTeed Corp., Guardian Building Products, Johns Manville and Knauf, settled the case in 2008. Without admitting any wrongdoing, the four manufacturers agreed to a $37.2 million pay-out.
Masco continued to fight the charges, and a trial was scheduled for July 23 in Atlanta. But court proceedings were suspended when both parties entered in mediation talks. The plaintiffs, most of them local and regional firms, were seeking $250 million in damages. In antitrust cases, awards are automatically tripled.
A call placed to Masco for further comment was not returned.