UPDATE 2-Int'l Paper, others face price-fixing lawsuit
* Kleen Products sues nine defendants
* Collusion alleged to cause lower supply, inflated prices
* Antitrust violations alleged (Adds International Paper, Weyerhaeuser comments; Weyerhaeuser 2008 sale of containerboard business)
By Jonathan Stempel
NEW YORK, Sept 10 (Reuters) - A Minnesota company has filed an antitrust lawsuit accusing International Paper Co (IP.N), Packaging Corp of America (PKG.N) and several rivals of conspiring to fix prices on containerboard, which is used to make cardboard boxes.
In a lawsuit filed Thursday in federal court in Chicago, the plaintiff, Kleen Products LLC, alleged that beginning in August 2005, the defendants began a coordinated effort to limit containerboard production.
Kleen, a maker of floor care products, said this violated the Sherman Act, a U.S. antitrust law, by creating an artificial containerboard shortage. This, the Minnetonka-based company said, caused prices to rise much faster than costs, with the average price per short ton increasing to nearly $700 from just over $450.
"There are no innocent explanations for the coordinated price increases," the complaint said. "Although basic economics holds that manufacturers in a competitive market faced with similar demand conditions as evidenced here would be expected to increase production to satisfy market demand and gain market share, each defendant refrained."
Other defendants include Georgia Pacific LLC, Smurfit-Stone Container Corp SSCC.N, Temple-Inland Inc TIN.N, Weyerhaeuser Co (WY.N), Canada's Cascades Inc (CAS.TO) and its Norampac Inc unit, and Canada's Domtar Corp (UFS.TO).
According to the complaint, the defendants have 83 percent of the containerboard market, controlling nearly 30 million tons of annual production.
The lawsuit seeks class-action status on behalf of containerboard purchasers over the last five years, and seeks triple damages as well as other remedies.
In emails, International Paper spokeswoman Patty Neuhoff called the allegations "baseless," and Weyerhaeuser spokesman Greg French said they "have no basis in fact." Cascades spokesman Didier Filion declined to comment. The other defendants did not immediately return requests for comment.
Michael Freed, the lawyer who signed the complaint on behalf of nine law firms representing the plaintiff, did not immediately return a call seeking comment.
Weyerhauser sold its containerboard business to International Paper for $6 billion in 2008.
The case is Kleen Products LLC v. Packaging Corp of America et al, U.S. District Court, Northern District of Illinois, No. 10-05711. (Reporting by Jonathan Stempel; Additional reporting by Matt Daily and Ernest Scheyder; Editing by Steve Orlofsky, John Wallace and Matthew Lewis)
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