The Mogin Law Firm, P.C. and Freed Kanner London & Millen LLC, co-lead counsel, are pleased to announce that on August 4, 2016, the United States Court of Appeals for the Seventh Circuit affirmed certification of the class in Kleen Products LLC et al. v. International Paper Company, et al. (a.k.a. the “Containerboard Products” antitrust case). The unanimous Seventh Circuit opinion was authored by the Hon. Diane P. Wood and was joined by the Hon. William J. Bauer and the Hon. Ann Clair Williams. Containerboard Products alleges price-fixing and supply restriction claims against the major integrated producers of containerboard and corrugated products under section 1 of the Sherman Act, 15 USC § 1.
On March 26, 2015, United States District Judge Harry D. Leinenweber of the Northern District of Illinois certified the nationwide class under Federal Rule of Civil Procedure Rule 23, consisting of “all persons that purchased Containerboard Products directly from any of the Defendants or their subsidiaries or affiliates for use or delivery in the United States from at least as early as February 15, 2004 through November 8, 2010.” The defendants brought an interlocutory appeal under Rule 23(f), contending that the court’s findings regarding predominance and superiority under Rule 23(b) constituted an abuse of discretion.
The Seventh Circuit rejected defendants’ arguments in toto. As a procedural matter, the Appellate Court explained that the district court’s decision to refrain from holding a special evidentiary hearing on class certification, a decision hotly contested by the defendants, was “a case-management decision that we have no reason to second-guess, despite Defendants’ complaints.” In addition to multiple rounds of expert reports, all experts were also deposed on class certification issues. The Court also affirmed that “Rule 23 does not demand that every issue be common; classes are routinely certified under Rule 23(b)(3) … even though other individual issues will remain after the class phase.”
Substantively, the Circuit Court found predominance because plaintiffs submitted substantial evidence common to the class to establish liability, common impact and damages. The Court said that the plaintiffs provided “extensive evidence that, if believed would be enough to prove the existence of the alleged conspiracy.” The Seventh Circuit rejected the argument that the plaintiffs have to prove that each and every class member suffered at least some impact from the alleged violation in order to show common impact under Rule 23. Plaintiffs’ expert evidence was sufficient to satisfy this element. The Court also found that evidence submitted by plaintiffs’ experts set forth an acceptable methodology for measuring class-wide damages, which matched the theory of liability and therefore complied with Supreme Court’s decision in Comcast Corp. v. Behrend.
The Seventh Circuit likewise affirmed the district court’s rulings on superiority, finding that the presence of a small number of releases from a prior antitrust litigation and certain contract clauses did not preclude certification. Finally, the Appellate Court affirmed the lower court’s refusal to dismiss defendant RockTenn, formerly Smurfit–Stone Container Corp. and now WestRock, on bankruptcy grounds. The district court did not abuse its discretion in finding sufficient evidence that RockTenn re-joined the conspiracy after its discharge from bankruptcy, or that the company might be jointly and severally liable for the actions of its co-conspirators taken before RockTenn was discharged based on its post-discharge participation in the conspiracy.
“We are obviously quite pleased with this result. We always believed that Judge Leinenweber made a painstaking review of a voluminous and detailed record, rigorously scrutinized the expert testimony and ultimately made the right call to certify the class’” said Dan Mogin, co-lead counsel. “This is not only a great decision for our clients, the class, and for our case, but beyond that it’s also an excellent statement of class certification law from a highly respected court. We are proud of our great team of co-counsel.”
THE MOGIN LAW FIRM, P.C. specializes in representing businesses, entrepreneurs, consumers and investors in antitrust, unfair competition and complex business litigation. We have participated in some of the largest antitrust cases in the United States and are frequently requested by other law firms and often consult with law firms engaged in antitrust cases.
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