PENNSYLVANIA RECORD

A week after two men filed a federal antitrust class action suit against the makers of

gypsum board alleging the companies conspired to fix the prices of the commodity, another consumer filed his own complaint against the manufacturers in federal court.

Massachusetts resident Howard Glaser filed his suit Jan. 30 on behalf of himself and others similarly situated, alleging that as a result of the defendants’ misconduct, he and others sustained injury in that they were made to pay more for drywall than they would have in the absence of the companies’ collective wrongdoing.

The lawsuit was jointly filed by Kenneth Trujillo and Ira N. Richards, of the Philadelphia firm Trujillo, Rodriguez & Richards, and attorneys Robert S. Green, James Robert Noblin and Lesley E. Weaver, of the California firm Green & Noblin.

The defendants named in the case are CertainTeed Corp., USG Corp., United States Gypsum Co., New NGC Inc., LaFarge North America Inc., Georgia-Pacific, American Gypsum Co., Temple-Inland Inc., and PABCO Building Products.

The lawsuit accuses the defendants of violating the Sherman Act, which has to do with anti-competitiveness.

The defendants are accused of engaging in an unlawful conspiracy, dating back to at least the fall of 2011, to fix, raise, maintain and stabilize the price of gypsum board, which is also known as drywall or sheetrock, and is used in residential and commercial construction projects.

“Because of its sound-dampening, fire-retarding, and moisture-control qualities, gypsum board has no competitively significant substitutes, thus enabling the manufacturer of gypsum board to control the market without fear that purchasers might turn to an alternate product,” the complaint states.

The suit claims that from at least September 2011 through the present, the defendant companies combined and conspired to fix and raise the prices at which they sold the product in the U.S. beginning with large and coordinated price increases that became effective in early 2012.

“In advance of these coordinated increases, during late September through mid-October 2011, five of the eight defendant manufacturers announced to their customers that they were raising gypsum board prices in January 2012, each by an unprecedented 35% and indicated those price increases would remain in place throughout 2012,” the lawsuit reads.

The complaint further states that the defendants conspired to abolish a process known as “job quotes,” which had protected customers from price increases occurring during their respective construction projects, and allowed them to lock in gypsum board prices during the duration of their projects.

“In addition, job quotes were an avenue for price competition between manufacturers, as customers could get bids from a variety of manufacturers and play one off of the other,” the lawsuit states. “But the collusive change in the industry pricing model limited such competition and shifted the risk of future price increases squarely to customers and was expressly designed to allow Defendants to profit from both this and any future price increases.”

The lawsuit accuses the defendants of violating state and federal antitrust laws as well as state and federal consumer protection and unfair competition laws.

A similar class action suit was filed by the same plaintiffs’ attorneys at the U.S. District Court in Philadelphia on Jan. 23.

 

The federal case number is 2:13-cv-0059-MMB.