In re Linerboard Antitrust Litigation

504 F.Supp.2d 38

In re LINERBOARD ANTITRUST LITIGATION

This Document Relates to: Procter & Gamble Company, et al. v. Stone Container Corporation, et al.

Mars, Inc., et al.

Stone Container Corporation, et al.

Perdue Farms, Inc. v. Stone Container Corporation, et al.

MDL No. 1261.

MDL No. 03C-3944 (N.D.Ill.).

MDL No. 03C-6977 (N.D.Ill.).

MDL No. 03-CV-1702 (D. Md.).

United States District Court, E.D. Pennsylvania.

August 30, 2007.

COPYRIGHT MATERIAL OMITTED

DuBOIS, District Judge.

TABLE OF CONTENTS
MEMORANDUM .......................................................................41
   I.  INTRODUCTION ..............................................................41
  II.  BACKGROUND ................................................................42
 III.  DISCUSSION: STATUTES OF LIMITATIONS .......................................43
       A.  Facts .................................................................43
           1.  The Class Case ....................................................43
           2.  The Direct Actions ................................................44
           3.  Tolling of the State Statutes of Limitations ......................44
       B.  Standard of Review ....................................................44
       C.  Analysis ..............................................................46
           1.  The Class Complaint ...............................................46
           2.  Evidence Outside of the Class Complaint ...........................48
           3.  Class Action Tolling Does Not Apply to Contested Claims ...........49
  IV.  DISCUSSION: SUFFICIENCY OF CONSPIRACY EVIDENCE ............................49
       A.  Standard of Review ....................................................49
           1.  Explanation of the Matsushita Standard ............................50
           2.  Analyzing Evidence at the Summary Judgment Stage ..................51
               a.  Parallel Behavior .............................................52
               b.  Motive and Actions Contrary to Interests ......................52
               c.  Evidence Implying a Traditional Conspiracy ....................53
               d.  Opportunity to Conspire .......................................53
               e.  Pretextual Explanations .......................................53
       B.  Analysis ..............................................................53

           1.  Inland ..........................................................55
               a.  Facts .........................................................55
               b.  Analysis ......................................................59
           2.  Gaylord ...........................................................60
               a.  Facts .........................................................60
               b.  Analysis ......................................................61
   V.  DISCUSSION: OPPORTUNITY COST ..............................................63
       A.  Facts .................................................................63
       B.  Standard of Review ....................................................63
       C.  Analysis ..............................................................64
  VI.  CONCLUSION ................................................................66
ORDER ............................................................................67

MEMORANDUM

I. INTRODUCTION

In this multidistrict litigation under Section 1 of the Sherman Act, 15 U.S.C. § 1, plaintiffs allege that several United States linerboard manufacturers conspired to restrict linerboard output in order to increase the price of corrugated sheets and corrugated boxes.¹ Currently before the Court are three motions for summary judgment: Defendants' Motion for Summary Judgment With Respect to Statutes of Limitations, Defendant Temple-Inland Inc.'s Motion for Summary Judgment, and Defendant Gaylord Container Corporation's Motion for Summary Judgment.²

In the Motion for Summary Judgment With Respect to Statutes of Limitations, defendants argue that the class-action component of MDL No. 1261 did not toll direct-action plaintiffs' state and federal claims based on purchases made between December 1, 1995 and May 1997. The Court agrees with defendants: plaintiffs' claims based on purchases made between December 1, 1995 and May 1997 were not tolled, and are thus time-barred. Accordingly, the Court grants the Motion for Summary Judgment With Respect to Statutes of Limitations.

In Inland's and Gaylord's Motions for Summary Judgment, defendants first argue that, under Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), plaintiffs' conspiracy evidence does not tend to rule out the possibility that defendants acted independently. The Court disagrees with defendants: plaintiffs' conspiracy evidence tends to rule out the possibility of independent action. See id. The facts of this case "strongly suggestand are `not merely consistent with'-a price-fixing conspiracy." In re OSB Antitrust Litig., 2007 WL 2253419, *3 (E.D.Pa. Aug. 3, 2007) (citing Bell Atlantic Corp. v. Twombly, ___ U.S. ___, ___, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007)). Accordingly, the Court denies defendants' Motions for Summary Judgment with respect to the sufficiency of plaintiffs' evidence of conspiracy.

In Inland's and Gaylord's Motions for Summary Judgment, defendants also challenge plaintiffs' entitlement to "opportunity cost" damages. The Court agrees with defendants: recoupment of opportunity cost damages is equivalent to recovery of prejudgment interest, which is not warranted in this case. Accordingly, the Court grants defendants' Motions for Summary Judgment with respect to plaintiffs' claimed opportunity cost damages.

II. BACKGROUND

The factual background of this case is described in detail in this Court's previous opinions. See, e.g., In re Linerboard Antitrust Litig., 2000 WL 1475559, *1 (E.D.Pa. Oct. 4, 2000) (denying motion to dismiss); In re Linerboard Antitrust Litig., 203 F.R.D. 197, 201-04 (E.D.Pa.2001), aff'd, 305 F.3d 145 (3d Cir.2002), cert. denied, 538 U.S. 977, 123 S.Ct. 1786, 155 L.Ed.2d 666 (2003) (certifying classes of direct purchasers of corrugated boxes and corrugated sheets); In re Linerboard Antitrust Litig., 296 F.Supp.2d 568 (E.D.Pa. 2003) (approving final class settlement); In re Linerboard Antitrust Litig., 2004 WL 1221350, *1 (E.D.Pa. June 2, 2004) (awarding class counsel attorney's fees); In re Linerboard Antitrust Litig., 223 F.R.D. 335, 337 (E.D.Pa.2004) (denying motion to dismiss state claims based on state statutes of limitations); In re Linerboard Antitrust Litig., 223 F.R.D. 357 (E.D.Pa.2004) (denying motion under Federal Rule of Civil Procedure 60 and motion for expedited discovery); In re Linerboard Antitrust Litig., 2005 WL 1625040, *1 (E.D.Pa. July 11, 2005) (granting motion to remand for lack of subject matter jurisdiction); In re Linerboard Antitrust Litig., 443 F.Supp.2d 703 (E.D.Pa.2006) (granting motion for summary judgment against one direct action plaintiff); In re Linerboard Antitrust Litig., 237 F.R.D. 373 (E.D.Pa.2006) (denying "plaintiffs' motion to compel Inland to provide a Rule 30(b)(6) witness educated with facts recalled by Inland's in-house counsel" under work product doctrine); In re Linerboard Antitrust Litig., 497 F.Supp.2d 666, 667 (E.D.Pa.2007) (denying motion to exclude expert testimony on damages).

Plaintiffs in this case purchased corrugated products from defendants. According to plaintiffs, defendants "conspired to raise the price of corrugated containers and corrugated sheets throughout the United States by restricting production and/or curtailing inventories in violation of federal antitrust laws." In re Linerboard Antitrust Litig., 223 F.R.D. 357, 359 (E.D.Pa.2004). Specifically, plaintiffs allege that defendant Stone Container Corporation ("Stone")

devised a strategy to invite its competitors to increase the price of linerboard. As part of this strategy, Stone planned to take downtime at its plants to reduce its production and inventory of linerboard substantially, and `contemporaneously to, purchase substantial amounts of linerboard from competitors — actions which, plaintiffs allege, were extraordinary, and not in the regular course of business.

* * * * * *

The concerted actions of the defendants in taking downtime at the mills producing linerboard, and then increasing the price of linerboard, resulting in price increases for corrugated sheets and corrugated boxes, forms the basis of the conspiracy at issue in this case.

In re Linerboard Antitrust Litig., 203 F.R.D. 197, 204 (E.D.Pa.2001).

Plaintiffs' theory of the case is that the alleged conspiracy is tantamount to a price-fixing agreement. "An agreement on output also equates to a price-fixing agreement. If firms raise prices, the market's demand for their product will fall, so the amount supplied will fall too — in other words, output will be restricted. If instead firms restrict output directly, price will as mentioned rise in order to limit demand to the reduced supply." Id. at 216 (citing 216 Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221, 226 (7th Cir.1978)).

III. DISCUSSION: STATUTES OF LIMITATIONS

Direct-action plaintiffs assert claims pertaining to: (1) purchases made between October 1, 1993 through November 30, 1995, based on allegedly anticompetitive behavior occurring in 1993; and (2) purchases made between December 1, 1995 and May 1997, based on allegedly anticompetitive behavior beginning in 1995 and continuing into 1996. See Opp. to SOL Mot. at 2. The parties agree that plaintiffs' claims based on purchases made between October 1, 1993 through November 30, 1995 were tolled by the class action; defendants argue only that plaintiffs' state and federal claims based on purchases made between ...