Pulp and Paper Canada

Companies settle antitrust cases

September 30, 2003  By Pulp & Paper Canada

Three containerboard and packaging producers — International Paper, Georgia-Pacific and Weyerhaeuser — will pay a…

Three containerboard and packaging producers — International Paper, Georgia-Pacific and Weyerhaeuser — will pay a total of $68 million to settle two class-action cases.

The two civil class-action antitrust lawsuits were filed in May 1999 against several major containerboard and packaging producers. The plaintiffs, purchasers of corrugated sheets and containers from October 1993 through November 1995, alleged that these three companies, along with other integrated manufacturers, had conspired to increase prices.


The U.S. District Court, Eastern District of Pennsylvania, has been asked to give preliminary approval to the settlement, which is expected during the fourth quarter 2003. The settlement does not cover companies that have opted-out of the class-action cases. Prior to this settlement, certain plaintiffs opted out of the class litigation and have recently filed separate cases against the defendant companies.

Weyerhaeuser, G-P and IP maintained that offering settlement does not mean admitting guilt.

“Although these lawsuits were without merit, we determined that settling them was in the best interests of our shareholders given the complexity, time and cost of litigation, and uncertainty of court proceedings,” said Robert A. Dowdy, Weyerhaeuser VP and general counsel. Dowdy said that Weyerhaeuser would continue to vigorously defend itself in the related opt-out cases.

The G-P executive VP and general counsel James F. Kelley said the company “did nothing wrong and would not be liable for any damages in this action. We are settling this case because there is always risk when a class is certified in a case in which multiple defendants have been sued for treble damages. Unfortunately, even blameless defendants are sometimes forced to settle such cases.”

IP echoed the same concern. “We continue to dispute the validity of the plaintiffs’ allegations. However, given the costs and risks of defending even a meritless class action, and absent necessary legal reforms, this settlement is in the best interest of the company,” said Maura A. Smith, senior VP and general counsel.

Weyerhaeuser said the settlement will result in an after-tax charge of $15 million, or 7 cents per share, in the third quarter.

G-P’s share of the proposed settlement, approximately $21 million, will result in an after-tax charge of approximately $13 million (5 cents per share) to third quarter 2003 earnings.

As for IP, an addition to a legal reserve for this matter will be taken in the third quarter, resulting in an after-tax charge of approximately 2 cents per share.

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