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International Paper, 8 Others Sued for Price Fixing

Sept. 10 (Bloomberg) -- International Paper Co., Packaging Corp. of America and seven other containerboard makers were sued and accused of conspiring to fix the price of materials used to make cardboard boxes.

The companies created a product shortage leading to higher prices, according to a complaint filed yesterday in federal court in Chicago by Kleen Products LLC. The closely held floor-care company asked for class-action status for the case, to include containerboard buyers from the companies over the past five years.

Norampac Industries Inc., Cascades Inc., Domtar Corp., Weyerhaeuser Co., Georgia Pacific LLC., Temple-Inland Inc., and Smurfit-Stone Container Corp. were also sued. The defendants supply 83 percent of the containerboard market, according to Kleen Products.

Price increases from August 2005 until now outpaced cost increases by more than 50 percent, and the companies were “nearly simultaneous” in raising prices, according to the complaint.

“The goal of the conspiracy was to fix, raise, maintain and stabilize the price at which containerboard products were sold,” Kleen, based in Minnetonka, Minnesota, said in the suit.

International Paper, based in Memphis, Tennessee, said the allegations were “baseless.”

“Our company holds itself to the highest standards of ethical conduct and business practices,” the company said in an e-mailed statement. “We take seriously any allegations to the contrary and will vigorously defend ourselves in this litigation.”

Representatives of the other defendant companies didn’t immediately return calls for comment on the suit or declined to comment immediately.

The case is Kleen Products LLC v. Packaging Corp. of America, 1:10-CV-05711, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: William McQuillen in Washington at bmcquillen@bloomberg.net.

To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net

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