The current round of dismissals highlights some of the nuance in this case. Artuso Pastry in July brought the antitrust lawsuit against the eight major existing paper and packaging companies, accusing them of creating a corrugated materials cartel. But other adjacent entities were also named.
While the new company Smurfit Westrock was listed as a defendant, so were the companies that preceded it before forming the current company via a merger in July 2024. In addition, the case lists three discrete Cascades entities as defendants: Cascades Inc., Cascades USA Inc. and Cascades Holding US.
Like Graphic Packaging International last month, Smurfit Westrock was dismissed without prejudice. That means a defendant could be called back to the case later if new information comes to light of its potential involvement, although legal experts say it's not a common scenario.
The court documents do not address why GPI and SW were dismissed, and the companies declined to comment on litigation.
The defendants banded together to file a motion to dismiss on Oct. 20, the deadline set by the court for such filings. The dismissal reason "failure to state a claim" means even if some of the facts the plaintiff stated are true, they don't establish a legal claim, explained an attorney with antitrust defense expertise who reviewed the complaint but is not involved in the case.
"In conducting this analysis, the court actually assumes that the alleged facts are true, and then it makes a purely legal determination regarding the adequacy of the plaintiff's claim," Emmanuel Hurtado, an associate at Stubbs Alderton & Markiles, said via email. But there's an important caveat: "[L]egal conclusions or conclusory statements such as 'the defendant violated antitrust laws' which might be contained in a complaint are not assumed to be true."
In this case, the motion to dismiss suggests that even if it were true that all of the defendants simultaneously raised their prices, the plaintiff does not provide sufficient facts to show collusion, specifically an advance agreement to raise prices.
Because it's typically difficult for a plaintiff to access details about any alleged price-fixing agreements, "antitrust complaints often rely on circumstantial facts to show the existence of an agreement, and the court must make a determination as to whether those facts are sufficient," Hurtado said.
Another common argument in this type of dismissal request for antitrust cases is the plaintiff does not have standing to sue the defendants because it did not suffer antitrust injury, Hurtado explained. For instance, if a plaintiff purchased corrugated boxes from an independent supplier who purchased the material from one of the named manufacturers, the court would have to determine if the plaintiff's injuries were too derivative or remote, Hurtado said.
"To overcome this type argument, the plaintiff would not only need to allege that it was injured, but it would also need to allege that the injury was directly caused by the defendant's alleged anticompetitive conduct," he said.
While GPI and SW were dismissed without prejudice, PCA requested in its new filing to be dismissed "with prejudice," meaning this would permanently end the case against the company -- and the same case couldn't be brought against it again.
PCA laid out in its court document its reasons for requesting dismissal. It says Artuso alleges PCA participated in five of eight price increases in the designated time period, November 2020 to the present, but does not accuse PCA of any other acts that would further claims of a "conspiracy" to fix prices. It also says that PCA's lack of participation in the other three price increases "undermines the plausibility that PCA participated in the alleged conspiracy."
The complaint did not list PCA among the companies announcing a "value over volume" strategy, according to PCA's document. And while the plaintiff cites capacity reductions, that "theory makes no sense as to PCA," the document says, because the company announced in 2021 a capacity expansion in the form of converting a paper machine at its Jackson, Alabama, mill to produce linerboard for corrugated packaging.
The motion to dismiss document says that it would be "economically irrational" for PCA to join the other defendants in an agreement to fix prices while expanding output, noting "that would arguably undermine the group's ability to increase prices."
In short, it says the plaintiff's allegations do not sufficiently show the company engaged in a conspiracy. The document says "participating in follow-the-leader public price announcements is not indicative of conspiracy." It says the 2010 Kleen Products lawsuit that also claimed collusion within the containerboard industry already proved that follow-the-leader pricing is "nothing more than legal, interdependent conduct."
Pratt's motion to dismiss says the company is only named in 11 of the complaint's 163 paragraphs and "does not allege that Pratt participated in the majority of the alleged price increases or took any other action in furtherance of the conspiracy." In addition, the plaintiff does not provide evidence that Pratt used a "value over volume" strategy or reduced its output of containerboard; in fact, the document says, Pratt increased its output during that time and opened a new paper mill and four new corrugating and manufacturing plants between 2022 and 2024.
"That alone makes it impossible to plausibly infer that a price-fixing conspiracy existed, or that Pratt participated in any such conspiracy," the document says.
Like PCA, Pratt's individual motion to dismiss cites the Kleen Products case. "As other courts have recognized, it would make no economic sense for Pratt to agree with Defendants to fix prices while Pratt simultaneously engaged in a significant expansion of output--an action directly contrary to the purpose of the purported conspiracy."
