Opinion ID: 805979
Heading Depth: 2
Heading Rank: 2

Heading: The Publication Paper Industry

Text: “Commercial paper” is a type of publication paper that is used for printing and advertising. Manufactured in several different grades, some of which are numbered 1 through 5, its quality ranges from “fine” (the most expensive type) to “supercalendered” (the least expensive). Fine paper—categorized in the industry as including grades 1, 2, and 3—is typically used for high-end publications. Magazine paper—comprised of grades 4 and 5—is generally used in ordinary magazines and store catalogues. Supercalendered paper—which is not assigned grade numbers—is often used to print the advertising inserts found in newspapers. The present action involves “publication paper,” which, for purposes of this litigation, is defined as grades 3, 4, and 5 of “coated” commercial paper.2 The publication paper that plaintiffs purchased thus includes the coated products of some fine, and all magazine, paper. Publication paper is commonly considered a commodity product—i.e., a product that is uniform rather than differentiated across sellers. The publication paper market in North America is an oligopoly. In 2002 and 2003, when the price-fixing agreement is alleged to have been made and implemented, International Paper (“IP”), SENA, and UPM ranked first, second, and third, respectively, in volume of production of publication paper in North America. Each had a market share of between 17% and 21%; their combined 2 Plaintiffs describe “coated” papers as “papers that contain a layer of coating material . . . in combination with an adhesive on one or both surface(s) of the paper.” Compl. ¶ 6. 5 market shares totaled approximately 60%.3 During the same two-year period, publication paper was selling at historically low prices, and the industry suffered from excess capacity and low demand.4 Despite these unfavorable conditions, in August 2002, IP and MeadWestvaco (“Mead”), another publication paper manufacturer, both announced price increases; in November 2002, Mead announced a price increase; and in February 2003, IP announced a price increase. Both in the timing of the announcements and the amount of the increases, SENA and UPM’s price increases in August and November 2002 and in February 2003 closely followed those of their competitors.