Finnish forest companies face class-action suit in USA

Magazine paper buyers suspect overpricing, want refund

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A group of buyers of magazine paper in the United States are going to court to seek compensation for suspected overpricing of paper. The buyers filed a suit in a local court in Bridgeport, Connecticut. The plaintiffs did not specify a sum of money.
      The class-action suit is linked with investigations by competition authorities in Finland, the European Union, and the United States concerning a suspected paper manufacturers’ cartel. The companies involved are suspected of illegal price-fixing both in their purchases of raw material and the sale of various grades of paper.
      The Finnish companies UPM, Stora Enso, and Myllykoski manufacture and sell large amounts of magazine paper in the United States. According to news agency reports, UPM is one of the companies involved in the suit, and M-real said on Thursday that it is also a defendant.
     
The suit involves a total of 20 companies, probably including a number of other Finnish firms.
      The Finnish company UPM has helped officials in their investigation. Under legislation that took effect at the beginning of the year, revealing the existence of a cartel frees the whistle-blower from liability for fines or other sanctions. However, UPM can still be sued for monetary damages.
      Norway’s Norske Skog said on Thursday that it is one of the companies named in the suit. The company’s deputy director Jarle Langfjaeren said he does not believe that the plaintiffs have much of a chance of success. He points out that the price of magazine paper has gone down at the time that the plaintiffs mention in their suit.
      UPM legal affairs director Reko Aalto-Setälä says that class-action suits were to be expected after the anti-trust investigations began.
      "When the US Department of Justice said that it was starting a criminal investigation, I was sure that there would be class-action suits to follow."
     
Stora Enso has retained the services of legal firms in Finland, Belgium, and the United States to respond to the various anti-trust investigations in different countries. M-real has also hired legal counsel.
      Hiring lawyers indicates that the two companies hope to fight their way out of the mess. The alternative would be to cooperate with the authorities in hopes for lenient treatment.
     
Stora Enso and M-real are taking a different strategy from UPM, which provided authorities with information on the suspected cartel.
      "Investigations by competition authorities in Europe and the United States are in their early stages, and no charges have been filed against the concern or any of its individual employees", Stora Enso announced on Thursday.
      "Stora Enso has long had a precise rule on adherence to competition legislation, and the organisation has been trained to follow those rules. Stora Enso takes these issues very seriously", the company’s CEO Jukka Härmälä says.
      Stora Enso’s offices were raided in late May, and the company’s lawyers are working to find out what the material taken from the offices really contains.
     
Stora Enso is not quite sure what it is suspected of. The material submitted by UPM would shed more light on the subject, but the Finnish Competition Authority will not release the material even to the interested parties. Stora Enso and Metsäliitto, the parent company of M-real, have appealed to the Helsinki Administrative Court for access to the evidence against them.


Previously in HS International Edition:
  Competition Authority refuses to hand over documents in forest industry cartel case (7.6.2004)
  Police raid offices of numerous forest companies over cartel suspicions (26.5.2004)

Helsingin Sanomat