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J.M. Huber has agreed to a $2 million settlement in a lawsuit accusing nine oriented strand board (OSB) producers of price fixing and collusion. At an Aug. 14 hearing in the U.S. District Court for the Eastern District of Pennsylvania, there were no objections to the proposed settlement, clearing the way for Huber’s formal exit from the case in 90 days.
None of the other defendants have offered to settle the lawsuit, which gained class action status on Aug. 3.
In a prepared statement, Huber denied the allegations, which it characterized as “totally without merit.”
“We have broken no antitrust laws and have done nothing wrong,” the statement said. “We have agreed to the settlement solely to avoid further expense and inconvenience as well as the distraction and uncertainties of extremely burdensome litigation.”
The original complaint was filed in February 2006 on behalf of Sawbell Lumber in Philadelphia and several other LBM dealers. The plaintiffs claimed that Huber and other OSB manufacturers conspired to artificially inflate prices and reduce the available supply of OSB in the United States between June 2002 and March 2007. Other defendants named in the lawsuit are Louisiana-Pacific, Weyerhaeuser, Ainsworth Lumber, Norbord Industries, Potlatch, Tolko Industries and Grant Forest Products.
Ironically, OSB prices are currently at their lowest levels since 1997, according to Paul Jannke, senior vp-wood products and timber for RISI, the forest products research firm. The spike in OSB prices that prompted the lawsuit was caused by “a number of market factors,” in Jannke’s opinion, including the surge in single-family housing production and OSB’s share of that market.
“It is very unlikely that OSB producers were involved in price fixing,” Jannke said. “The structural panel markets are highly competitive compared to most: there are about 65 (OSB and plywood) producers in North America alone.” When the price of OSB gets too high, builders have the option of switching to plywood, Jannke pointed out.
Several OSB producers contacted for this story either did not respond or had no comment. A spokesperson for Norbord reiterated the company’s position on the antitrust charges: “Norbord denies the plaintiff’s allegations and intends to defend the litigation vigorously.”
Huber’s $2 million settlement, to be paid to individuals or businesses who purchased OSB between June 1, 2002, and March 5, 2007, will be held in an escrow account until the entire case is resolved. Although a trial date has been set for March 25, 2008, the plaintiffs’ counsel said he anticipates more settlement agreements will be forthcoming.
“We do hope and expect that the Huber settlement will function as an ice breaker,” said Jeffrey Corrigan, an attorney with Spector, Roseman & Kodroff in Philadelphia.