Carbon steel flange makers win lawsuit
A jury found in favor in of Boltex and Weldbend on all counts against Ulma Forja and Ulma Piping in a lawsuit alleging false advertising and unfair competition.
On September 27, 2019, a jury returned a verdict in favor of Boltex and Weldbend on all counts in the lawsuit by the American carbon steel flange manufacturers, against a Spanish company, Ulma Forja – part of the Mondragon Corp. – and its U.S. subsidiary, Ulma Piping. The trial, which began on September 16, was presided over by Judge Andrew S. Hanen in the United States District Court for the Southern District of Texas, Houston Division.
“We were very pleased with the jury’s verdict in this case and their findings that Ulma engaged in false advertising and unfair competition, which harmed two American companies and their workers,” said Frank Bernobich, chairman and president, Boltex.
In addition to the actual damages in the false advertising and unfair competition dispute, the verdict for plaintiffs Boltex Manufacturing Co. and Weldbend Corp. included $4 million in exemplary damages and $26 million in profit disgorgement from defendants Ulma Piping USA Corp. and Ulma Forja S.Coop.
Boltex, based in Houston, and Weldbend, headquartered outside of Chicago, became suspicious several years ago when Ulma began offering supposedly heat-treated (“normalized”) flanges to U.S. customers at undercutting prices. Plaintiffs sued Ulma in 2017, after metallurgical testing suggested that Ulma’s flanges had not been normalized and were not in conformance with industry standards as claimed by Ulma’s advertising.
The lawsuit accused Ulma of falsely claiming that it normalized its flanges in accordance with American Society of Testing and Materials (ASTM) A105 standards. It further stated that Ulma stamped these flanges “A105N”, issued documentation with each flange stating they had undergone the normalization process specified by the ASTM and continued to ship the flanges into the U.S. for use in American pipelines, refineries and chemical plants ─ all when testing showed the flanges were not normalized.
Following the conclusion of the trial, the plaintiffs were asked whether they believe the verdict will make pipelines, refineries and chemical plants safer. Their response, in writing, was as follows:
“Boltex and Weldbend believe that engineers specify flanges and other piping components that meet ASTM standards for a reason. Those ASTM standards are intended to enhance both the performance and safety of the products they cover. If this verdict helps ensure that flanges marked as meeting ASTM standards do, in fact, meet those standards, we believe it will help ensure the integrity and safety of pipelines, refineries and chemicals plants.”
The managements of Boltex and Weldbend further pointed out that they were able to demonstrate to the jury the importance of the specific industry standards at issue in the case, although these standards were probably new to them, “in a way that resonated.”
“I want to thank the jury for recognizing Ulma’s unfair and deceptive practices that have gone on for years,” said James Coulas, Jr., President of Weldbend. “American companies like Weldbend and Boltex can compete with anyone in the world on a fair and level playing field.”
Four key distributors of piping products that include carbon steel flanges testified in the trial.