Even large American corporations can become victims of price-fixing conspiracies. Lommen Abdo has represented several corporations in both individual and class action lawsuits to recover money wrongfully obtained by various manufacturers.
Corrugated containers
One group of products alleged to be involved in a price fixing scheme is corrugated containers. These containers are constructed with a fluted sheet, known as corrugating medium, glued to liners of flat paper facing, known as linerboard. Corrugated materials, which include cardboard boxes, are used throughout industry. It is a product that finds universal use in the shipping of products.
Price-fixing allegations
This antitrust action alleges that the defendants, all of whom are manufacturers of linerboards and corrugated materials, conspired among themselves to fix, raise, maintain and stabilize the prices at which corrugated material was sold in the United States during the bulk of the 1990's. Further, the plaintiffs allege that the defendants conspired among themselves to reduce the inventory supply of linerboard through, among other things, coordinated and sequenced downtime at their respective linerboard manufacturing facilities.
The plaintiffs allege that the defendants conspired to fix the prices of corrugated material through a series of agreed price increases of linerboard, a key component of corrugated materials. The overwhelming majority of linerboard produced in the United States is used by the manufacturers to produce their own corrugated containers. Because linerboard constitutes more than 50% of the manufacturing cost of corrugated containers, the effect of the increase in the price of linerboard was an increase in the price of corrugated containers sold not only by the defendants and their co-conspirators, but also by others who sold these materials.
Current litigation
Currently, there is a class action lawsuit against a group of defendants that includes Stone Container Corp., International Paper, Weyerhauser Paper and Union Camp. However, a number of plaintiffs have “opted out” of the class action and are proceeding in a separate action on their own. Lommen Abdo represents a number of these “opt out” plaintiffs. The plaintiffs in the opt-out action are a virtual Who’s Who of large American corporations including, for example, the Proctor & Gamble Company, Anheuser Busch, Campbell Soup Company, the Coca Cola Company, Land O’ Lakes, Purina Mills, Colgate Palmolive, the Chlorox Company, Coors Brewing Company and others.
An interesting aspect of antitrust lawsuits has to do with a plaintiff’s claim for damages. A plaintiff has to prove that the defendants conspired to artificially raise prices. Once this is established, the plaintiff must also demonstrate the extent to which prices were raised artificially. The “but for the conspiracy” difference in the price is the way damages are calculated. The American antitrust laws provide, once this is amount is established, that the plaintiffs are entitled to treble damages, or three times the amount, of the “but for” price.
In addition to civil lawsuits, there are also criminal penalties for those individuals and companies who are convicted of antitrust violations.
We would be pleased to answer any questions you may have about the services of our Antitrust attorneys. Any questions may be directed to:
In Minnesota:
Ron Haskvitz at 612-336-9339 or ron@lommen.com.