775 F. Supp. 2d 1071
N.D. Ill.2011Background
- This action arises from antitrust class-action claims against the containerboard industry defendants alleging violations of Sherman Act §1.
- The case consolidates Kleen and related plaintiffs’ claims against multiple industry participants (Packaging, International Paper, Temple, Georgia-Pacific, Norampac, Smurfit-Stone, etc.).
- The class period spans 2005–2010, during which industry price increases and capacity reductions occurred amid significant consolidation and high barriers to entry.
- Plaintiffs allege a pervasive industry-wide conspiracy facilitated by trade associations (FBA, AFPA) and industry events that synchronized price increases and capacity cuts.
- The court applies Twombly/Iqbal plausibility standards to assess whether the complaint plausibly shows an agreement, not mere parallelism, and considers contextual factors beyond parallel conduct.
- The court denies the Rule 12(b)(6) motion, finding the complaint plausibly alleges an antitrust conspiracy and that the individual and industry-wide theories are supported by the alleged timing, structure, and industry dynamics.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint plausibly alleges a §1 antitrust conspiracy. | Kleen asserts conscious parallelism plus contextual factors show agreement. | Defendants contend parallel conduct is insufficient without more evidence of an agreement. | Plaintiff's claim plausibly stated; not dismissed. |
| Whether parallel capacity reductions and price increases support plausible conspiracy. | Kleen argues timing and magnitude support conspiracy. | Defendants argue reductions/price moves can be rational independent actions. | Plausible conspiracy supported by timing and context. |
| Whether industry structure and events provide additional plausibility. | Kleen points to consolidation, inelastic demand, and trade-event timing. | Defendants contend structure alone is insufficient for liability. | Structure/context contribute to plausibility but do not negate it. |
| Whether individual defendants can be implicated in a joint conspiracy. | Kleen alleges all defendants participated in industry-wide conduct. | Defendants argue no individual admitted participation; show limited involvement. | Individual defendants not exempt; industry-wide conspiracy supports liability. |
| Whether the conspiracy extended to corrugated boxes as end-use products. | Kleen links containerboard price effects to box prices. | Defendants maintain allegations limited to containerboard. | Conspiracy plausibly extends to corrugated boxes. |
Key Cases Cited
- Text Messaging, 630 F.3d 622, 630 F.3d 622 (7th Cir. 2010) (clarifies plausibility vs. probability and industry structure as context)
- Cont'l Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (U.S. Supreme Court 1962) (look at conspiracy as a whole, not in parts)
- In re Plasma-Derivative Protein Therapies Antitrust Litig., 764 F. Supp. 2d 961 (N.D. Ill. 2011) (discusses expectations of parallelism and plausibility)
- In re High Fructose Antitrust Litig., 295 F.3d 651 (7th Cir. 2002) (illustrates non-dispensability of capacity additions to disprove conspiracy)
- Gen. Leaseways, Inc. v. Nat'l Truck Leasing Ass'n., 744 F.2d 588 (7th Cir. 1984) (recognizes that either price-fixing or output restriction can prove parallelism)