Kleen Products LLC v. Georgia-Pacific LLC

Direct purchasers of containerboard charged manufacturers with conspiring to increase prices and reduce output from 2004-2010. The Seventh Circuit affirmed the certification of a nationwide class of buyers. Most of the defendants settled. Georgia‐Pacific and WestRock did not settle but persuaded the court that there was not enough evidence of a conspiracy to proceed to trial. The Seventh Circuit affirmed the dismissal; the Purchasers’ evidence does not tend to exclude the possibility that the companies engaged only in tacit collusion. Without something that can be called an agreement, oligopolies elude scrutiny under section 1 of the Sherman Act, 15 U.S.C. 1, while no individual firm has enough market power to be subject to section 2. Tacit collusion is easy in those markets; firms have little incentive to compete, “preferring to share the profits [rather] than to fight with each other.” Because competing inferences can be drawn from the containerboard market structure, the economic evidence did not exclude the possibility of independent action. No evidence supported the Purchasers’ accusation that the defendants lied in claiming to have independently explored a possible price increase. The supposedly coordinated reductions of output through mill closures and slowdowns do not necessarily suggest conspiracy. Conduct that is easily reversed may be consistent with self‐interested decision‐making. There is no evidence that the executives discussed illicit price‐fixing or output restriction deals during their frequent calls and meetings. View "Kleen Products LLC v. Georgia-Pacific LLC" on Justia Law