Plywood Antitrust Litigation, In re

Decision Date08 September 1981
Docket NumberGEORGIA-PACIFIC,Nos. 80-3234,s. 80-3234
Citation655 F.2d 627
Parties1981-2 Trade Cases 64,273, 8 Fed. R. Evid. Serv. 1639 In re PLYWOOD ANTITRUST LITIGATION. FRENCH QUARTER APARTMENTS, LTD., et al., Plaintiffs-Appellants, v.CORPORATION, et al., Defendants-Appellees.CORPORATION, Defendant-Appellant, v. KOHN, SAVETT, MARION & GRAF, P. C., et al., Movants-Appellees. WILLAMETTE INDUSTRIES, INC., Defendant-Appellant, v. KOHN, SAVETT, MARION & GRAF, P. C., et al., Movants-Appellees. LYMAN LAMB CO., et al., Plaintiffs-Appellees, v.CORPORATION, et al., Defendants-Appellants. to 80-3237. . Unit A
CourtU.S. Court of Appeals — Fifth Circuit

Frank Gregory, Tulsa, Okl., for appellant in 80-3234.

Hammond E. Chaffetz, Fred H. Bartlit, Jr., James H. Schink, Steven D. McCormick, Bruce Featherstone, John M. Felzan, Chicago, Ill., for Georgia-Pacific Corp.

Charles W. Lane, III, New Orleans, La., for Weyerhaeuser.

Robert H. Bork, New Haven, Conn., for all defendants-appellees.

Gene W. Lafitte, New Orleans, La., for Willamette Industries.

Kohn, Savett, Marion & Graf, Harold E. Kohn, Wayne M. Thomas, Philadelphia, Pa., Herbert J. Garon, Jacques F. Bezou, New Orleans, La., Joseph D. Tydings, Dale E. Fredericks, Sedgwick, Detert, Moran & Arnold, San Francisco, Cal., Joel C. Meredith, Philadelphia, Pa., Edward W. Harris, III, Indianapolis, Ind., Michael E. Kris, Washington, D. C., Lawrence H. Eiger, Chicago, Ill., pro se.

John L. Cooper (argued), Farella, Braun & Martel, San Francisco, Cal., for Lyman Lamb Co., et al.

Dale E. Fredericks, San Francisco, Cal., for Plywoods Distributing Co.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before INGRAHAM, POLITZ and WILLIAMS, Circuit Judges.

INGRAHAM, Circuit Judge:

Three consolidated appeals, Nos. 80-3235, 80-3236 and 80-3237, arise out of (1) judgments entered in favor of four representative members of certified classes of plywood purchasers and against defendants-appellants Georgia-Pacific Corporation, Weyerhaeuser Company, and Willamette Industries, all of whom are softwood plywood manufacturers, following a special jury verdict finding that defendants had engaged in a price fixing conspiracy in violation of section 1 of the Sherman Act, 15 U.S.C. § 1 (1976), and (2) judgments imposing monetary sanctions against Georgia-Pacific and Willamette for failure to provide discovery. Another appeal, No. 80-3234, consolidated for purposes of oral argument with the abovementioned three, arises out of a judgment entered in favor of the abovenamed defendants and against certain plaintiffs who were indirect purchasers of plywood with respect to those defendants.

Appeals Nos. 80-3235, 80-3236 and 80-3237 will be referred to collectively as the Lyman Lamb case. Appeal No. 80-3234 will be referred to as the French Quarter Apartments case. Both of these cases are part of a multidistrict litigation proceeding that began as a class action on behalf of various plywood purchasers. Several similar actions were filed in district courts around the country and ordered consolidated in the Eastern District of Louisiana by the Judicial Panel on Multidistrict Litigation. In re Plywood Antitrust Litigation, 376 F.Supp. 1405 (Jud.Pan.Mult.Dist.Lit.1974). Certain final judgments were entered by the district court on February 21, 1980, and certified pursuant to Fed.R.Civ.P. 54(b). Nonprevailing parties perfected these appeals from those judgments. We now affirm the judgment of the district court with respect to each appeal.

I. The Lyman Lamb Case
A. Procedural Context

This litigation commenced in the Eastern District of Louisiana in 1972 as a class action on behalf of plywood purchasers who claimed damages by reason of a price fixing conspiracy involving softwood plywood manufacturers. Numerous similar actions subsequently were filed in various district courts and eventually were ordered consolidated in the Eastern District of Louisiana. In 1976 Judge Cassibry certified the plaintiffs' classes. In re Plywood Antitrust Litigation, 76 F.R.D. 570 (E.D.La.1976). Thereafter, the actions were reassigned to Judge Pointer who, following defendants' motions to decertify the classes, confirmed the prior certification but redefined the class to include only direct purchasers. With the exception of defendants-appellants herein, the class claims against all other defendant softwood plywood manufacturers were resolved prior to trial.

Trial commenced on October 16, 1978, on "all issues except the amount of damages sustained by individual plaintiffs, intervenors, and class members," and concluded with a special verdict on November 14, 1978. The jury determined that defendants Georgia-Pacific, Weyerhaeuser, and Willamette, together with all other manufacturers of southern plywood, had engaged in a conspiracy in restraint of trade from February 23, 1968, to December 31, 1973 (the damage period), and that the conspiracy caused financial damage to purchasers of southern plywood equal to the amount by which "west coast freight" (freight computed as though the product were shipped from the west coast) exceeded actual freight charges from southern shipping points (such excess being referred to herein as "phantom freight" or "freight pickup"). Similarly, the jury determined that the conspiratorial use of "standard weights" by manufacturers of western fir plywood during the damage period caused financial damage to purchasers thereof in the amount by which freight charges calculated on the basis of "standard weights" exceeded the actual freight costs incurred by defendant manufacturers (such excess being referred to herein as "underweights").

Defendants subsequently moved for judgment notwithstanding the verdict and for a new trial. In a memorandum opinion the district court denied both motions, In re Plywood Antitrust Litigation, 1979-1 Trade Cas. (CCH) P 62,459 (E.D.La.1978), and entered an interlocutory judgment in favor of plaintiffs on the special verdict. The court expressly noted that the evidence was "sufficient not merely to create a jury issue but also to cause (the district court), like the jury, to find that there was a conspiracy and that the three defendants were parties to that conspiracy." Thereafter four members of the plaintiff classes, the Lyman Lamb Company and the other three appellees, each moved for summary judgment as to individual damages computed in accordance with the jury's verdict. 1 The district court in a memorandum opinion dated February 14, 1980, granted the motions and subsequently entered pursuant to Fed.R.Civ.P. 54(b) the February 21, 1980 judgments from which all three defendants now jointly appeal in No. 80-3237.

Prior to trial plaintiffs moved for entry of judgment against defendants Georgia-Pacific and Willamette for failure to produce various documents during discovery. The district court declined to enter adverse judgments as sanctions but, after briefing and hearing, granted plaintiffs' counsel an award of fees and expenses incurred by reason of the failure of Georgia-Pacific and Willamette to provide the requested discovery. Pursuant to Fed.R.Civ.P. 54(b), the court entered judgment against each of those defendants on February 21, 1980, from which Georgia-Pacific and Willamette respectively appeal in No. 80-3235 and No. 80-3236.

B. Appeal No. 80-3237 Judgment on the Merits

Synthesizing the statements of the issues contained in the appellate briefs of the parties, we find that the concerns relevant to the disposition of this appeal fall into three general categories: those relating to proof of the existence vel non of a statutory violation; those relating to proof of impact vel non on plaintiffs' business; and those relating to evidentiary admissions and jury instructions by the district court. We deal with each of these categories in turn.

1. The Statutory Violation

Section 1 of the Sherman Act, 15 U.S.C. § 1 (1976), provides that "every contract, combination ... or conspiracy in restraint of trade or commerce ... is ... illegal." The term "every" is not to be taken literally; instead the standard of reasonableness has been adopted to judge the lawfulness of the restraint. Standard Oil Co. v. United States, 221 U.S. 1, 66, 31 S.Ct. 502, 518, 55 L.Ed. 619 (1911). Certain practices, however, have such a "pernicious effect on competition," Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958), that they are considered to be per se violations of section 1 of the Sherman Act. Among these practices is price fixing, United States v. Trenton Potteries, 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700 (1927), and the machinery employed to achieve that end is immaterial, United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 210, 60 S.Ct. 811, 838, 84 L.Ed. 1129 (1940). These long-standing principles enjoy full vitality today. See Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 100 S.Ct. 1925, 64 L.Ed.2d 580 (1980).

In response to special interrogatories, the jury returned a verdict that defendants were engaged, along with other softwood plywood manufacturers, in a conspiracy to fix prices. Defendants attack the viability of this verdict, asserting that plaintiffs produced no evidence, either direct or circumstantial, of any such conspiracy. Accordingly, they contend that it was error for the district court to deny their motion for judgment notwithstanding the verdict. Our standard for review of that denial by the district court is well known. Considering all of the evidence in the light most favorable to the nonmoving party,

If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there...

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