Kleen Prods. LLC v. Int'l Paper

276 F.Supp.3d 811

KLEEN PRODUCTS LLC, et al., Individually and on behalf of all those similarly situated, Plaintiffs,

v.INTERNATIONAL PAPER, et al., Defendants.

Case No. 10 C 5711

United States District Court, N.D. Illinois, Eastern Division.

Signed August 3, 2017

Daniel E. Gustafson, Daniel C. Hedlund, Gustafson Gluek PLLC, Vincent J. Esades, Heins Mills & Olson, P.L.C., Robert J. Schmit, Heidi M. Silton, W. Joseph Bruckner, Brian D. Clark, Devona Lynn Wells, Lockridge Grindal Nauen P.L.L.P., Minneapolis, MN, Amelia Igo Pelly Frenkel, Ethan Padilla Fallon, Gregory G. Rapawy, Steven F. Benz, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C., Washington, DC, Amy Thomas Brantly, David Wayne Kesselman, Trevor Vincent Stockinger, Kesselman Brantly Stockinger LLP, Manhattan Beach, CA, Anthony D. Shapiro, Jeffrey Sprung, Hagens Berman Sobol Shapiro LLP, Seattle, WA, Carl Nils Hammarskjold, Geoffrey C. Rushing, Richard Alexander Saveri, William J. Heye, Saveri & Saveri, Inc., San Francisco, CA, Charles P. Goodwin, Law Offices of Charles P. Goodwin, Dianne M. Nast, Erin C. Burns, Nastlaw LLC, Edward A. Diver, Howard Langer, Peter E. Leckman, Langer Grogan & Diver, P.C., H. Laddie Montague, Martin I. Twersky, Berger & Montague, P.C., Jennifer E. MacNaughton, City of Philadelphia Law Department, Steven J. Greenfogel, Lite Depalma Greenberg, LLC, Philadelphia, PA, Christopher M. Burke, Kristen M. Anderson, Walter W. Noss, Scottscott LLP, Daniel Jay Mogin, Moginrubin LLP, Jodie Michelle Williams, The Mogin Law Firm, P.C., San Diego, CA, Daniel A. Bushell, Berman DeValerio, Manuel Juan Dominguez, Cohen Milstein Sellers & Toll, Palm Beach Gardens, FL, Donald Lewis Sawyer, Keogh Law, Ltd., Daniel J. Kurowski, Hagens Berman Sobol Shapiro LLP, Chicago, IL, Joseph Goldberg, Goldberg Ives & Duncan, PA, Albuquerque, NM, Michael Jerry Freed, Michael E. Moskovitz, Robert J. Wozniak, Steven A. Kanner, Freed Kanner London & Millen, LLC, Bannockburn, IL, Robert G. Eisler, Grant & Eisenhofer P.A., Wilmington, DE, Richard Frank Lombardo, Shaffer Lombardo Shurin, Kansas City, MO, Brian Philip Murray, Lee Albert, Glancy Binkow & Goldberg LLP, New York, NY, for Plaintiffs.

James T. McKeown, Andrew John Barragry, Trent M. Johnson, Brett H. Ludwig, Foley & Lardner LLP, Milwaukee, WI, Amber D. Floyd, Kacey L. Faughnan, Wyatt, Tarrant & Combs, LLP, Robert L. Crawford, McDonnell, Boyd, Smith and Solmson, Memphis, TN, Nathan P. Eimer, Susan M. Razzano, Eimer Stahl LLP, Peter James O'Meara, Joanne Lee, Foley & Lardner LLP, Scott M. Mendel, John Edward Susoreny, Lauren Nicole Norris, K&L Gates LLP, Michelle S. Lowery, Chelsea L. Black, Stephen Yusheng Wu, Lauren Britt Salins, McDermott, Will & Emery LLP, James R. Figliulo, Stephanie D. Jones, William G. Cross, Figliulo & Silverman, P.C., Andrew Stanley Marovitz, Britt Marie Miller, Courtney Lynn Anderson, Joshua Aaron Faucette, Matthew David Provance, Sean Patrick McDonnell, Mayer Brown LLP, James Franklin Herbison, Kevin Fitzgerald Wolff, Matthias A. Lydon, Michael P. Mayer, Winston & Strawn LLP, Jeffrey Scott Torosian, DLA Piper LLP, Abigail A. Clapp, Greenberg Traurig, LLP., Chicago, IL, Michael D. Leffel, Foley & Lardner LLP, Madison, WI, Margaret H. Warner, McDermott Will & Emery, LLP, Rakesh Nageswar Kilaru, Alexandra M. Walsh, Beth A. Wilkinson, Brant W. Bishop, Wilkinson Walsh Eskovitz PLLC, D. Bruce Hoffman, Ryan A. Shores, Hunton & Williams LLP, Jaime Singer Kaplan, Quinn Emanuel Urquhart & Sullivan LLP, Washington, DC, Kyle R. Taylor, Marc L. Greenwald, Michael B. Carlinsky, Sami Husayn Rashid, Stephen R. Neuwirth, Deborah Kay Brown, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, for Defendants.

MEMORANDUM OPINION AND ORDER

Harry D. Leinenweber, Judge

Before the Court are the Motions for Summary Judgment filed by Defendants Georgia–Pacific [ECF No. 1086] and Westrock [ECF No. 1088]. For the reasons stated herein, the Court grants the Motions. It therefore denies as moot the parties' cross filings for partial summary judgment on the narrower issue of released and untimely claims [ECF Nos. 1114 and 1138]. Lastly, given that with this opinion the Court has disposed both of the parties' Daubert and summary judgment motions, it denies as moot the requests for hearings on those submissions [ECF Nos. 1272 and 1273].

I. BACKGROUND

This case is an antitrust class action in which Plaintiffs accuse Defendants of conspiring to fix prices in violation of Section 1 of the Sherman Act. Plaintiffs were direct purchasers of containerboard products from Defendant paper companies. They allege that, between February 15, 2004 and November 8, 2010 ("the Class Period"), Defendants engaged in a series of agreed-upon actions to raise the price of containerboard products. These include lockstep announcements of price increases and reductions in the supply of containerboard achieved by "cutting capacity, slowing back production, taking downtime, idling plants, and tightly restricting inventory." Kleen Prods. LLC v. Int'l Paper, 306 F.R.D. 585, 589 (N.D. Ill. 2015) (internal quotation marks omitted).

All but two Defendants have settled. The settling Defendants include Cascades Canada, Inc., Norampac Holdings U.S., Inc. (collectively "Norampac"), Packaging Corporation of America ("PAC"), International Paper Company, Temple–Inland, Inc., and Weyerhaeuser Company. Defendants International Paper, Temple–Inland, and Weyerhaeuser settled only after filing for summary judgment. Due to their settlement, their Motions have been denied as moot. See , ECF No. 1365.

The two Defendants that remain in the case are Georgia–Pacific and Westrock (f/k/a/ Smurfit–Stone or RockTenn), and they have continued to press for summary judgment. Defendants' case is simple. They say that Plaintiffs have not carried their burden to show that there was an agreement to fix prices among the alleged conspirators. All of their actions, Defendants claim, are consistent with actions taken in permissible competition. Moreover, Defendants argue that the range of permissible competition allowed them—large firms operating in a concentrated industry—is wide. In particular, they point out that they may lawfully raise prices not only because external market forces call for such price increases, but also because they believe that fellow competitors may find it in their best interest to raise prices as well. According to Defendants, once this range of lawful, consciously parallel behavior is accounted for, Plaintiffs' evidence cannot reasonably show that Defendants conspired.

Plaintiffs disagree. They contend that the evidence, when viewed in the light most favorable to them, permits a reasonable jury to find that Defendants were not competing but illegally colluding with one another. Plaintiffs offer the following evidence to contest summary judgment. First, they draw attention to the fact that during the six and a half years of the alleged conspiracy, Defendants—a group that includes both the Defendants that have settled and the two moving Defendants, Georgia–Pacific and Westrock, that have not—collectively announced 15 price increases. With one exception, all Defendants joined each price announcement and around the same time; twelve out of the 15 times, Defendants increased prices for identical amounts; and all the increases carried nearly the same effective dates. Second, Plaintiffs show that the price increases came in close temporal proximity to trade association meetings, direct telephone calls, or other communications where Defendants had the opportunity to confer and enter into an agreement with one another. Third, Plaintiffs claim that Defendants reduced their containerboard production strategically, closing mills or otherwise slowing production around the time that they announced their price increases.

Table 1 summarizes some of this evidence. It shows the 15 price increases during the Class Period and one predating it. The first column lists the date on which a price increase was first announced and the second the amount of the price increase. The columns thereafter list for each Defendant how many days after the first price announcement it joined the price increase by making its own announcement. Where a Defendant announced a different price than what the first-to-announce firm committed to, its own price increase amount is noted. For example, the table shows that International Paper was the first to announce a price increase of $35.00 on March 31, 2003. Georgia–Pacific followed suit three days later, and a day after that (or four days from the initial announcement) Temple–Inland likewise announced that it was increasing its containerboard prices but by $40.00.

Table 1: Price Increases during the Class Period

Notes:

• Except where noted, each Defendant's price increase was for the same amount as the first-to-announce firm's.

• The first price increase of March 31, 2003 predates the Class Period.

• Two of the price increases—those announced by Georgia–Pacific on November 23, 2009 and June 29, 2010—were led by a non-Defendant. Georgia–Pacific was only the first among Defendants to announce these increases.

• Six of the price increases, marked with asterisks by the date of the first price announcement, failed.

• Weyerhaeuser did not announce any price increase after the May 28, 2008 announcement. This was presumably due to the fact that the company sold its containerboard business to International Paper on August 4, 2008.

In addition, Plaintiffs put forth a "conduit theory" to explain how Defendants facilitated their conspiracy. According to Plaintiffs, Defendants used their earnings calls, communications with industry analysts, and other public statements to leak confidential information to their co-conspirators. Plaintiffs assert that such leaks allowed Defendants to coordinate their actions and further their price-fixing scheme. In the same vein, Plaintiffs draw attention to the fact that Defendants traded often among themselves. Plaintiffs contend...