Know Your Judge: Jose Linares Handles Big Chemical Cartel Case

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By Eleanor Tyler

This week in Know Your Judge, we check in with Jose L. Linares, the chief judge of the U.S. District Court for the District of New Jersey, who is overseeing multidistrict litigation on an alleged cartel affecting widely used water treatment chemicals.

Buyers of liquid aluminum sulfate, a coagulant used by municipalities to treat drinking water and wastewater and in manufacturing by pulp and paper mills, are seeking damages against the group of chemical companies they say fixed prices and rigged bids.

One corporate defendant, GEO Specialty Chemicals Inc., has reached tentative settlements with both groups of plaintiffs. That leaves General Chemical Corp., GenTek Inc., Chemtrade Chemicals Corp., C&S Chemicals, Inc., USALCO, LLC, Kemira Chemicals, Inc., Southern Ionics, Inc., and private equity fund American Securities, Inc. along with related companies and people alleged to have participated at various companies.

The case is an outgrowth of a Justice Department criminal investigation into years of alleged bid rigging and price fixing in the industry. The investigation led to a guilty plea by GEO Specialty Chemicals and indictments of former executives at that firm. Not long after former General Chemical Corp. executive Frank Reichl pleaded guilty in October 2015, private litigants, including municipalities that bought large amounts of aluminum sulfate for water treatment, filed lawsuits nationwide.

The Judicial Panel on Multidistrict Litigation consolidated the cases before Linares in early 2016. The case currently consolidates 71 actions.

Direct purchaser plaintiffs — cities, water districts, or utilities — asked Linares June 15 as a class to preliminarily approve a settlement with GEO. The proposed settlement would essentially end the company, which said is anticipating a sale of “all or substantially all” of GEO’s stock or assets to make the payment. If Linares approves the deal, the direct purchasers will get $10.8 million in cash and up to $13.5 million from a sale or merger of the company. After that, GEO (what’s left of it) pledged cooperation in ongoing litigation against the non-settling defendants.

According to a letter filed by the Justice Department on June 20, the indirect purchaser class — cities or utilities that made their transactions through an intermediary — has also reached a settlement with GEO.

Unhappy litigants shouldn’t count on getting a decision from Linares reversed on appeal. According to Bloomberg Law’s Litigation Analytics, Linares’ decisions are fully affirmed 87 percent of the time. He has been fully reversed in only 7.3 percent of his cases.

Cuban Emigre

Linares, one of five brothers, escaped Cuba with his family in 1965 when he was 12. Linares’s family wound up in New Jersey, where he has lived since except for a stint in Philadelphia for law school. He presides in Newark, where he grew up and is the first Latino federal chief judge. He took over that job from Jerome Simandle in 2017.

Linares earned his B.A. from Jersey City State College (now New Jersey City University) in 1975 and a J.D. from Temple Law School in 1978. After graduation, he was a supervising attorney of the New York City Department of Investigation from 1978 to 1980. He was in private practice as a litigator in New Jersey for 20 years from 1980 to 2000, when he became a state Superior Court judge in Essex County.

He was appointed to the federal bench by President George W. Bush in 2002. He’s also an adjunct professor at Seton Hall School of Law teaching advanced criminal practice.

The case is In re Liquid Aluminum Sulfate Antitrust Litigation , D.N.J., 16-md-02687, 6/22/18 .

To contact the reporter on this story: Eleanor Tyler in Washington at etyler@bloomberglaw.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com

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