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In re OSB Antitrust Litigation

January 14, 2009


The opinion of the court was delivered by: Diamond, J.



In this antitrust class action, I decline to join as an involuntary plaintiff a Class Member that obtained its claims by assignment and now seeks to opt out of this litigation.


In March 2006, direct purchasers of Oriented Strand Board (a wood product commonly used in construction) brought suit, alleging a horizontal price-fixing conspiracy among nine major OSB manufacturers in violation of the Sherman Antitrust Act. See 15 U.S.C. § 1. Over the next two and a half years, I granted final approval to settlements between Plaintiffs and all Defendants: Ainsworth Lumber Co., Ltd., Georgia-Pacific Corporation, Grant Forest Products, Inc. and Grant Forest Products Sales, Inc., J.M. Huber Corporation, Louisiana-Pacific Corporation, Norbord Industries, Inc., Potlatch Corporation, Tolko Industries, Inc., and Weyerhauser Company. (Doc. Nos. 503, 867, 868, 869, 940, 941, 942, 943, 944.)

A. The Initial Attempt to Opt Out with Respect to Assigned Claims

In accordance with my scheduling orders, on May 7, 2008, Class Members Bailey Lumber & Supply Company and Ed Price Building Materials (which Bailey has acquired), gave notice that they would opt out of this litigation both as direct OSB purchasers and as the assignees of claims from two cooperative buying organizations -- Lumbermens Merchandising Corporation (for Bailey) and Guardian Building Products (for Price). (Doc. No. 858 Ex. 1.)

Although it is undisputed that Bailey and Price may opt out as direct OSB purchasers, Plaintiffs moved to preclude Bailey and Price from opting out as assignees, arguing that: (1) the companies are indirect purchasers with respect to any assigned claims and so are without standing to opt out of the Direct Purchaser Class; (2) allowing Bailey and Price to opt out would make it difficult to apportion damages and create a risk of multiple recoveries against the same Defendants; and (3) the proposed opt-out is invalid because Defendants have not consented to the assignments in question. (Doc. No. 858.) All Defendants but Huber joined Plaintiffs' Motion. (Doc. Nos. 859, 864.)

In opposing Plaintiffs' Motion, Bailey and Price provided no evidence confirming even the existence of the assignments. Accordingly, on August 28, 2008, I granted Plaintiffs' Motion without prejudice to the right of Bailey and Price to renew their opt-out attempt with supporting evidence. (Doc. No. 881.) On September 11, 2008, Bailey submitted an "Assignment of Claim" document dated May 7, 2008 in which Lumbermens' President and CEO purports to assign to Bailey some of Lumbermens' antitrust claims against seven of the Defendants. (Doc. No. 888 Ex. A.) The Parties do not dispute the document's authenticity or that Lumbermens in fact made such an assignment to Bailey. Although the assignment related only to those OSB purchases that Lumbermens then resold to Bailey, the May 7, 2008 document did not indicate the dollar value of the purchases.

Price has not submitted any evidence confirming that it received assigned claims from Guardian or any other entity. Counsel has now confirmed that Price has "abandoned" its attempt to opt out with respect to assigned claims. (Doc. No. 949 at 2.) Accordingly, I will address only Bailey's opt-out effort.

B. Continued Litigation Respecting Bailey's Assigned Claims

I held a series of conferences in October and a hearing in November to determine if the Parties could stipulate to the value of the OSB purchases Lumbermens assigned to Bailey. See Tr. Nov. 24, 2008 at 3-8. On December 4, 2008, the Parties submitted a "Stipulation Regarding the Value of the Claims Assigned by Lumbermens Merchandising Corporation to Bailey Lumber & Supply Company," which provided that the assigned OSB purchases totaled $4,454,127. (Doc. No. 936.)

On November 12, 2008, Bailey filed a federal antitrust action in Mississippi against Georgia-Pacific, BlueLinx Corporation, and Weyerhaeuser, and added Louisiana-Pacific as a defendant on November 26, 2008. (S.D. Miss. Civil Action No. 08-1394.) Bailey has brought the action both as a direct purchaser of OSB and as assignee of the Lumbermens purchases. (Id. Doc. No. 13.)

Although the Parties have stipulated to the value of Lumbermens' assignments to Bailey, Plaintiffs and Defendants vigorously contend that as an assignee, Bailey does not have standing to opt out of the instant case, and that allowing the opt-out would prejudice them. Accordingly, ...

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