203 F.R.D. 197 (E.D.Pa. 2001), MDL 1261, In re Linerboard Antitrust Litigation

Docket Nº:MDL 1261.
Citation:203 F.R.D. 197
Opinion Judge:DUBOIS, District Judge.
Party Name:In re LINERBOARD ANTITRUST LITIGATION.
Attorney:Howard Langer, Sandals & Langer, LLP, Philadelphia, PA, for plaintiff Winoff. Jeffrey J. Corrigan, Spector, Roseman & Kodroff, Philadelphia, PA, Steven A. Kanner, Much Shelist Fried Denenberg, Ament & Rubenstein, Chicago, IL, for plaintiff General Refractories. Martin Twersky, Berger & Montague, ...
Case Date:September 04, 2001
Court:United States District Courts, 3th Circuit, Eastern District of Pennsylvania
 
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Page 197

203 F.R.D. 197 (E.D.Pa. 2001)

In re LINERBOARD ANTITRUST LITIGATION.

MDL No. 1261.

United States District Court, E.D. Pennsylvania.

September 4, 2001

As Amended Sept. 10, 2001.

Page 198

[Copyrighted Material Omitted]

Page 199

Claimants bringing Sherman Act claim, that manufacturers of linerboard fixed prices in violation of Sherman Act, moved for certification of classes consisting of purchasers of corrugated paper sheets made from linerboard and by purchasers of corrugated paper boxes also utilizing linerboard. The District Court, Dubois, J., held that: (1) numerosity, commonality and typicality requirements for class action certification were satisfied; (2) adequacy of representation requirement was satisfied, despite vendor, timing, geography, purchase size and statute of limitations differences, and doubts regarding degree of interest in suits and ability to support it; (3) common questions of law and fact predominated, even though purchasers did not acquire linerboard directly and there were differing pricing factors; (4) purchasers for whom factors other than linerboard price determining pricing would be excluded from class; (5) start and end dates of proposed class action were appropriate; (6) statute of limitations on Sherman Act claims would be tolled; and (7) class action was superior method for handling suit.

Classes certified.

Page 200

Howard Langer, Sandals & Langer, LLP, Philadelphia, PA, for plaintiff Winoff.

Jeffrey J. Corrigan, Spector, Roseman & Kodroff, Philadelphia, PA, Steven A. Kanner, Much Shelist Fried Denenberg, Ament & Rubenstein, Chicago, IL, for plaintiff General Refractories.

Martin Twersky, Berger & Montague, Philadelphia, PA, for plaintiff Garrett Paper Co.

Allen D. Black, Roberta D. Liebenberg, Fine, Kaplan and Black, Robert Larocca, Kohn Swift & Graf, Philadelphia, PA, for the Box Class.

R. Mark McCareins, Dane A. Drobny, Paul N. Monnin, Winston & Strawn, Chicago, IL, for defendants Jefferson Smurfit, Stone Container, Smurfit-Stone.

Richard Rizzo, Will Sachse, Jennifer R. Clarke, Dechert Price & Rhoads, Philadelphia, PA, for defendant Temple Inland.

Daniel B. Huyett, Stevens & Lee, Reading, PA, Steven C. Seeger, Kirkland & Ellis, Chicago, IL, Steven J. Harper, Chicago, IL, for defendant International Paper and Union Camp.

Page 201

Edward M. Posner, Paul H. Saint-Antoine, Isabel C. Lopez, Drinker Biddle & Reath, Philadelphia, PA, for defendant Georgia-Pacific.

Sherry A. Swisrsky, Ralph Wellington, Dianna Litvin, Schnader Harrison Segal & Lewis, Philadelphia, PA, Barack S. Echols, Douglas Kurtenbach, Timothy A. Duffy, Kirkland & Ellis, Chicago, IL, Steven J. Harper, Chicago, IL, for defendant Weyerhauser, PCA, Gaylord, Tenneco.

DUBOIS, District Judge.

MEMORANDUM
I. PROCEDURAL HISTORY 201
II. BACKGROUND 203
III. STANDARD FOR CLASS CERTIFICATION 204
IV. DISCUSSION 205
A. The Four Elements of Rule 23(a) 205
1. Numerosity 205
2. Commonality 205
3. Typicality 207
4. Adequacy of Representation 207
a. Lack of Purchases from Non-Stone Defendants 208
b. Timing, Location, and Amount of Purchases 208
c. Unique Defenses 211
d. Lack of Knowledge of the Litigation 212
e. Lack of Financial Resources 213
B. The Two Elements of 23(b)(3) 214
1. Predominance 214
a. Plaintiffs' Conspiracy Theory Does Not Preclude Predominance 214
b. Common Proof of Impact 216
c. Damages 220
d. Scope of Classes 220
e. Class Period 221
i. Beginning Date 221
ii. Ending Date 221
f. Fraudulent Concealment 222
2. Superiority 223
C. Definition of the Classes 224
V. CONCLUSION 224

Presently before the Court are two motions for class certification: Corrugated Sheet Plaintiffs' Motion for Class Certification (Document No. 76, filed January 11, 2001) and supporting Memorandum of Law (Document No. 74, filed January 10, 2001), and Corrugated Box Plaintiffs' Motion for Class Certification (Document No. 75, filed January 10, 2001), and related submissions. Oral argument on the Motions was held on August 8, 2001. For the following reasons, Corrugated Sheet Plaintiffs' Motion for Class Certification will be granted, and Corrugated Box Plaintiffs' Motion for Class Certification will be granted. I. PROCEDURAL HISTORY This is an antitrust case involving allegations that several U.S. manufacturers of linerboard 1 engaged in a continuing combination and conspiracy in unreasonable restraint Page 202 of trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The price fixing conspiracy that is the subject of this litigation was the focus of a 1998 complaint by the Federal Trade Commission (" FTC" ) against Stone Container Corporation (" Stone" ). The FTC charged Stone with a unilateral violation of Section 5 of the Federal Trade Commission Act. According to the FTC, Stone had attempted to reduce linerboard inventories and had " invite[d]" some of its competitors to join in a " coordinated price increase." The FTC did not allege that any other manufacturer had accepted Stone's " invitation," nor did it allege the existence of any conspiracy. See In re Linerboard Antitrust Litigation, 2000 WL 1475559, *1 (E.D.Pa. Oct. 4, 2000). Stone and the FTC entered into a consent decree. In doing so, Sone did not admit liability for its alleged unilateral misconduct, and the consent decree has no preclusive effect on Stone in this private party action. Id. Soon after the FTC filed its complaint, three lawsuits were filed in the Northern District of Illinois on behalf of purchasers of corrugated sheets (" Sheets Complaint I" ): General Refractories Co. v. Stone Container Corp., Civil Action No. 99-1341 (transferred on Mar. 16, 1999 to E.D. Pa.), and originally No. 98 C 3543 (filed June 8, 1998, N.D. Ill.); Albert I. Halper Corrugated Box Co. v. Stone Container Corp., Class Action No. 99-1396 (transferred on Mar. 19, 1999 to E.D. Pa.), and originally No. 98 C 4659 (filed July 28, 1998, N.D. Ill.); and Crest Meat Co., Inc. v. Stone Container Corp., Civil Action No. 99-1397 (transferred on Mar. 19, 1998 to E.D. Pa.), and originally No. 98 C 4612 (filed July 27, 1998, N.D. Ill.). These cases named only Stone as a defendant, but plaintiffs alleged that there were unnamed co-conspirators involved in the antitrust conspiracy, including inter alia, Jefferson Smurfit Corp. See Sheets Complaint I (all three complaints) at ¶ 9. Together, these plaintiffs are referred to as the Corrugated Sheet Plaintiffs or Sheet Plaintiffs. The Corrugated Sheet Plaintiffs aver in Sheets Complaint I that they were harmed by an industry-wide combination to artificially raise the price of linerboard. Four other lawsuits were filed against Stone in the Eastern District of Pennsylvania on behalf of purchasers of corrugated boxes in late 1998: Winoff Industries, Inc. v. Stone Container Corp., Civil Action No. 98-5055 (filed Sep. 23, 1998, E.D. Pa.), Oak Valley Farms, Inc. v. Stone Container Corp., Civil Action No. 98-5251 (filed Oct. 2, 1998, E.D. Pa.), Garrett Paper, Inc. v. Stone Container Corp., Civil Action No. 98-5228 (filed Oct. 1, 1998, E.D. Pa.), and Local Baking Products, Inc. v. Stone Container Corp., Civil Action No. 98-5384 (filed Oct. 9, 1998, E.D. Pa.). Together, these plaintiffs are referred to as the Corrugated Box Plaintiffs or Box Plaintiffs. The Corrugated Box Plaintiffs also aver that they were harmed by an industry-wide combination to artificially raise the price of linerboard. The four corrugated box actions in the Eastern District of Pennsylvania were consolidated by stipulation and order dated December 17, 1998 pursuant to Federal Rule of Civil Procedure 42(a). In late 1998 Stone filed a motion to dismiss Sheets Complaint I-that is, the three lawsuits originally filed against Stone in the Northern District of Illinois on behalf of purchasers of corrugated sheets. On January 8, 1999, Judge Blanche M. Manning of that court denied Stone's motion to dismiss. See General Refractories Co. v. Stone Container Corp., No. 98 C 3543, 98 C 4612 and 98 C 4659, 1999 WL 14498 (N.D.Ill. Jan. 8, 1999). Stone filed a consolidated answer to the three complaints in the Northern District of Illinois on February 5, 1999. Soon thereafter, on February 12, 1999 the Judicial Panel on Multidistrict Litigation transferred the actions pending in the Northern District of Illinois to this Court for all further pretrial proceedings. On May 14, 1999 the Corrugated Box Plaintiffs filed the First Amended and Consolidated Class Action Complaint (" Corrugated Box Amended Complaint" ). Stone and the following " Non-Stone" Defendants were named in the Corrugated Box Amended Complaint: Jefferson Smurfit Corp., Smurfit-Stone Container Corp., International Paper Co., Georgia Pacific Corp., Weyerhaeuser Paper Co., Temple Inland Inc., Gaylord Container Corp., Union Camp Corp., Simpson Page 203 Tacoma Kraft Co., Tenneco Inc., Tenneco Packaging, and Packaging Corp. of America. According to the Corrugated Box Amended Complaint, the Non-Stone Defendants accepted Stone's " invitation" to restrict the production of linerboard and artificially raise prices, resulting in an antitrust conspiracy in violation of the Sherman Act. On May 18, 1999 a separate class action complaint was filed in the Eastern District of Pennsylvania on behalf of purchasers of corrugated sheets (" Sheets Complaint II" ). This complaint names eleven of the twelve Non-Stone Defendants identified in the Corrugated Box Amended Complaint.2 Like the...

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