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In re OSB Antitrust Litigation

March 4, 2009

IN RE OSB ANTITRUST LITIGATION


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

THIS DOCUMENT RELATES TO: DIRECT PURCHASER ACTIONS

MEMORANDUM

Plaintiffs' Counsel seek attorneys' fees in connection with settlements Defendants reached with entities that have opted out of this antitrust class action. I have already awarded over $37 million in fees to Plaintiffs' Counsel in this matter. Because I do not believe the relief sought is permissible or warranted, I will deny Counsel's Motion.

I. BACKGROUND

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. During the next two and a half years, I granted final approval to settlements totaling over $120 million 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 Weyerhaeuser Company. (Doc. Nos. 503, 867, 868, 869, 940, 941, 942, 943, 944.)

Several entities -- including The Home Depot USA, Inc., 84 Lumber Company, Bailey Lumber & Supply Company, and Ed Price Building Materials -- opted out of certain Settlement Classes and the Litigation Class. Pursuant to the settlement agreements with all but one Defendant, settlement monies were escrowed with respect to each opt-out. If an entity that opted out then pursued its own claims against a Defendant, 75% of the set-aside was refunded to that Defendant. The remaining 25% was made part of the settlement funds to be distributed to the Class and Plaintiffs' Counsel.

On December 9, 2008, I awarded Class Counsel $37,091,797 plus interest in attorney's fees -- one third the total settlement monies available to Direct Purchaser Class Members. (Doc. No. 947.) On February 9, 2009, I approved Counsel's proposed plan to distribute this fee award among the thirty-eight firms that represented Direct Purchaser Plaintiffs. (Doc. No. 987.)

On June 18, 2008, Class Counsel filed a "Motion for Entry of Order Ensuring Reimbursement and Compensation from Tag-Along Actions," which I denied as premature. (Doc. Nos. 806, 865.) On December 30, 2008, Lead and Co-Lead Counsel filed a "Motion for Entry of Order Awarding Attorneys' Fees to Direct Purchaser Plaintiffs' Counsel from Settlements with Opt-Outs." (Doc. No. 962.) Class Counsel here refer to the settlements that several Defendants have reached outside the instant litigation with opt-outs Home Depot, 84 Lumber, Bailey Lumber, and Ed Price Building Materials. See Doc. Nos. 962, 981. Class Counsel contend that these settlements are funded almost entirely from the monies held in the opt-out escrow accounts. Class Counsel seek as attorneys' fees one third of the escrowed funds that were paid to these opt-outs. Home Depot, 84 Lumber, and Bailey Lumber argue that I am without jurisdiction to grant Counsel's request. (Doc. Nos. 964, 966, 972.)

II. DISCUSSION

I agree that I do not have jurisdiction to order the opt-outs to pay from the settlement monies they have already received the fees sought by Class Counsel. To the extent that I have jurisdiction over any funds that have not yet been disbursed to the opt-outs, I conclude that distribution of these monies to Class Counsel is not warranted.

A. Jurisdiction Over the Opt-Outs

In reaching their final settlements, the Parties agreed that I would retain limited, continuing jurisdiction of this matter. Thus, all my Final Approval Orders -- which were prepared by Class Counsel and entered on consent -- include only the following jurisdictional provision:

Without affecting the finality of this judgment in any way, this Court retains continuing and exclusive jurisdiction over all matters relating to administration, consummation, enforcement, and interpretation of the Settlement Agreement and of this Order, to protect and effectuate this Order, and for any other necessary purpose. [Defendant], Plaintiffs, and each member of the [ ] Class are hereby deemed to have irrevocably submitted to the exclusive jurisdiction of this Court, for any suit, action, proceeding, or dispute arising out of or relating to the Settlement Agreement and its exhibits. Solely for the purposes of such suit, action, or proceeding, to the fullest extent they may effectively do so under applicable law, the Parties are deemed to have irrevocably waived any claim or objection that they are not subject to the jurisdiction of this Court, or that this Court is, in any way, an improper venue or an inconvenient forum. (Doc. Nos. 940 ¶ 12, 941 ¶ 12, 942 ¶ 12, 943 ¶ 12, 944 ¶ 12; see also Doc. Nos. 503 ¶ 14, 867 ¶ 12, 868 ¶ 12, 869 ¶ 13.) The settling opt-outs are not bound by this provision because they are not members of the Class. Indeed, each Final Approval Order listed all the opt-outs and provided that "This Order shall have no force or effect on these persons or entities." (Doc. Nos. 503 ¶ 7, 867 ¶ 5, 868 ¶ 5, 869 ¶ 5, 940 ¶ 4, 941 ¶ 4, 942 ¶ 4, 943 ¶ 4, 944 ¶ 4.) In these circumstances, because I do not have jurisdiction over entities that are no longer Parties to this litigation, I cannot order them to pay Class Counsel's fees.

Class Counsel contend that Drelles v. Metropolitan Life Insurance Co. provides that courts may retain jurisdiction over opt-out plaintiffs. 90 Fed. Appx. 587 (3d Cir. 2004) (nonprecedential). I do not agree. The Drelles Court upheld an order requiring opt-outs to pay class counsel a fee for the time they spent retrieving discovery documents from a depository they administered. In seeking the production of documents, the opt-outs obviously submitted themselves to the court's jurisdiction -- at least with respect to the relief sought. ...


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