Following BASF, Covestro Reaches Second Settlement Agreement in MDI/TDI Price Manipulation Case!

These buyers initially filed the lawsuit in June 2018, alleging that several chemical manufacturers, including BASF, Dow Chemical, and Huntsman, artificially inflated the prices of MDI and TDI by restricting production. The complaint stated that these companies colluded and took advantage of their control over most of the supply, as well as a market environment lacking alternatives.

These companies have denied the allegations, stating that they were made following reports of a U.S. Department of Justice investigation, which ultimately brought no charges.

In March 2020, U.S. District Judge Donetta Ambrose denied the request to dismiss the case, finding that the allegations were sufficiently supported by evidence for the case to proceed. The judge noted evidence of synchronized price increases, plant shutdowns, and supply disruptions, as well as communications and industry meetings that took place before price announcements. At the time, Judge Ambrose also denied the motion filed by BASF, Covestro, Mitsui Chemicals, MCNS Co., and Wanhua Chemical to dismiss the case for lack of jurisdiction.

The case was reassigned in 2022, and after conducting a jurisdictional factual investigation, Covestro and Wanhua Chemical once again filed motions to dismiss. U.S. District Judge W. Scott Hardy granted these motions in January 2026, on the grounds that the court could not exercise jurisdiction over these two German companies and the Chinese company. The dismissal opinion emphasized the need to respect the independent corporate status of companies, stating that a typical parent-subsidiary relationship is not sufficient to justify bringing foreign companies to U.S. courts. This means that the claims against these two parent company entities by the plaintiffs are legally terminated. It is worth noting that Covestro LLC (the U.S. subsidiary of Covestro) remains a defendant in the case, unaffected by this ruling.

The case is In re: Diisocyanates Antitrust Litigation, Case No. 2:18-mc-01001, before the United States District Court for the Western District of Pennsylvania.

In a motion filed on May 4, 2026, seeking approval of a settlement with BASF, the purchasers stated that since the lawsuit was filed in 2018, the parties had engaged in vigorous litigation at every stage of the case, and they expected similar disputes in the subsequent stages. The motion stated that, in weighing the various factors for approving the settlement, the court needed to balance the value of the deal against the risks of continued litigation.

The motion states: “After years of protracted litigation, this groundbreaking settlement agreement provides substantial monetary compensation to the class members while also affording meaningful and effective cooperation to the plaintiffs. The value of the settlement far exceeds the risks of continued litigation and trial.”