 A Leading Supplier to the Specialty Chemical Industry 2 Foreign Cos. Escape Pa. Polyurethane Price-Fixing MDL
By Lauren Berg · Listen to article
Law360(January 29, 2026, 8:23 PM EST)– A Pennsylvania federal judge on Thursday unsealed his opinion from earlier this month dismissing two parent companies in Germany and China from multidistrict antitrust litigation that accuses several companies of conspiring to manipulate the prices of two chemicals used to make polyurethane, saying the court doesn’t have jurisdiction.
After the parties agreed it could be unsealed, U.S. District Judge W. Scott Hardy made public his Jan. 8 opinion granting renewed motions to dismiss by Covestro AG, headquartered in Leverkusen, Germany, and Wanhua Chemical Group Co. Ltd., headquartered in Yantai, China, agreeing that his court “is unable to exercise general or specific personal jurisdiction over” the foreign parent companies.
“In the court’s estimation, plaintiffs fail to establish that Covestro AG and Wanhua China had sufficient minimum contacts evidencing they do business in the United States to be ‘found’ here, nor do they establish that these defendants availed themselves of the privileges of American law or otherwise reasonably could anticipate being involved in litigation in the United States,” the judge said.
Judge Hardy dismissed the claims against Covestro AG and Wanhua China with prejudice, but the companies’ domestic subsidiaries, Covestro LLC and Wanhua Chemical America Co. Ltd., remain in the case.
The Pittsburgh-based multidistrict litigation accuses several companies — including BASF Corp., The Dow Chemical Co. and Huntsman Corp. — of using plant closures and limited supplies to drive up the prices of methylene diphenyl diisocyanate and toluene diisocyanate.
The class action generally alleges that the chemical companies reacted to a period of low MDI and TDI prices in 2014 and 2015 by limiting production and artificially inflating the prices for manufacturers of polyurethane plastic products, including plaintiffs such as Rhino Linings Corp. and Elliott Co. of Indianapolis.
According to the complaints, the defendant companies conspired through trade groups and took advantage of the difficulty that competitors would face when entering the market for the chemicals, known as diisocyanates and isocyanates, along with their control over most of the supply and the fact that the chemicals can’t be replaced with substitutes.
In March 2020, U.S. District Judge Donetta Ambrose denied the defendants’ joint motion to dismiss the case, finding the allegations in the complaint were sufficiently supported to move the case ahead. She also denied a motion to dismiss for lack of jurisdiction brought by foreign-based corporations BASF SE, Covestro AG, Mitsui Chemicals, MCNS and Wanhua China.
But following jurisdictional discovery, Covestro AG in July 2022 and Wanhua China in February 2023 renewed their motions to dismiss for lack of jurisdiction, and Judge Hardy granted both on Jan. 8, according to the docket.
In his opinion, unsealed Thursday, Judge Hardy first determined that the “foreign corporations with a headquarters and a principal place of business in other countries are not ‘at home’ in the United States,” meaning his court cannot exercise general personal jurisdiction over the companies.
The court also doesn’t have specific personal jurisdiction over Covestro AG and Wanhua China under both the traditional three-step analysis known as the “minimum contacts” test or under the “Calder effects test” laid out in the 1984 U.S. Supreme Court case Calder v. Jones , which can be used when an intentional tort is alleged, the order said.
“As to both Covestro AG and Wanhua China, the record makes clear that personal jurisdiction does not lie under the traditional test because neither foreign defendant ‘purposefully availed itself of the privilege of conducting activities’ in the United States,” Judge Hardy said, noting that neither company has manufactured or sold MDI or TDI in the U.S.
Turning to the Calder test, Judge Hardy determined that the plaintiffs have not alleged the crucial third factor — that Covestro AG and Wanhua China “expressly aimed tortious conduct at the United States such that it can be said to be the focal point of the tortious activity,” according to the order.
“Given that Covestro AG is a German holding company which does not manufacture or sell MDI or TDI, or otherwise perform any operational functions … it strains credulity that it expressly aimed the tortious conduct at issue here at the United States,” Judge Hardy said.
As for Wanhua China, the plaintiffs “inaccurately contend” that the company is involved in setting a floor price for sales of MDI through its American subsidiary and that it controlled the subsidiary by having Wanhua China members on the subsidiary’s board of directors, the order states.
The judge also rejected the plaintiffs’ argument that Wanhua China’s announcement and subsequent cancellation of an MDI plant in the U.S. “would have constrained the market by boosting supply expectations and then not delivering,” according to the order.
“Plaintiffs’ purely speculative argument on this point is wholly insufficient to establish Calder’s express aiming prong,” Judge Hardy said, likewise rejecting the plaintiffs’ “contention that Wanhua China engaged directly with United States customers by attending meetings, hosting visits at its plant in China, or engaging with them on technical issues and providing updates on research and development” would establish that it expressly aimed tortious conduct at the U.S.
The judge also rejected the plaintiffs’ argument for express aiming based on their claim that Wanhua China shipped diisocyanates into the U.S., saying in the opinion that this argument “obscures the fact that although the vast majority of the MDI that [Wanhua Chemical America Co.] sells in the United States comes from Wanhua China, WCA, not Wanhua China, sells MDI and TDI” to U.S. customers.
“Even in instances where WCA offered ‘China Direct’ shipping for customers to save on overall supply chain logistics and costs, customers contracted and interacted with WCA, not Wanhua China,” the judge said.
Craig Seebald of Vinson & Elkins LLP, an attorney for Wanhua, told Law360 Thursday, “We are pleased with the court’s decision and its thorough consideration of the jurisdictional record. With the jurisdictional motion decided, we can move forward with the litigation and look forward to filing our summary judgment motion.”
Counsel for the plaintiffs and Covestro did not immediately respond to requests for comment.
The plaintiffs’ interim co-lead counsel are Megan E. Jones of Hausfeld LLP and Jason S. Hartley of Hartley LLP, and their interim liaison counsel is William Pietragallo II of Pietragallo Gordon Alfano Bosick & Raspanti LLP.
Wanhua is represented by Craig P. Seebald, Adam Hudes, Brian Schnapp, Charles L. Wesley and Nicole Castle of Vinson & Elkins LLP.
Covestro is represented by John F. Terzaken, Abram J. Ellis and Avia Gridi of Simpson Thacher & Bartlett LLP.
The case is In re: Diisocyanates Antitrust Litigation, case number 2:18-mc-01001, in the U.S. District Court for the Western District of Pennsylvania.
https://www.law360.com/articles/2435925
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