Atlas Container Co. v. Alton Box Board Co.
Opinion of the Court
These consolidated appeals attack the settlements in this multidistrict antitrust action between the plaintiff classes of corrugated container purchasers and corrugated sheet purchasers and twenty-four defendants who manufacture corrugated products. We affirm the judgment of the district court.
There are three groups of appellants in this proceeding: certain settling defendants,
In the spring of 1979, some non-settling defendants began to assert cross-claims against settling defendants for contribution. On December 21, 1979, the district court gave final approval to these settlements despite the objections of some plaintiffs and some defendants.
The three groups described above who have appealed the final approval order have raised six issues. Recent decisions of the United States Supreme Court and of this court have made disposition of these issues less difficult than would otherwise be the case.
Certain settling defendants argue that the district court disregarded their rights in approving the settlements when it was unclear whether non-settling defendants would be able to assert claims against them for contribution under the federal antitrust laws. These defendants also claim that their settlements would be voidable under doctrines of commercial frustration and failure of consideration, and under a strict construction of the agreement itself, should such a right of contribution be recognized. Texas Industries, Inc. v. Radcliff Materials, Inc., - U.S. -, 101 S.Ct. 2061, 68 L.Ed.2d 500 (1981), held that there is no right to contribution under the federal antitrust laws in favor of a defendant against his co-conspirators. Thus, these objections by these certain settling defendants, being based entirely upon the possibility that a right to contribution under the federal antitrust laws would be recognized, have been deprived of their foundation. The objections were properly overruled.
The dissident sheet plant plaintiffs have raised three issues. First, they argue that the parties designated to represent their subclass were inadequate because these parties’ interests were different from those of the class, and that the district court failed to consider this inadequacy. It is asserted that the representatives of the sheet plant subclass, Atlas Container Company and Rollins Container, Inc., operated both as container purchasers and sheet
Adams Extract considered the objections of certain sheet plant dissidents that “the pre-January 5, 1979, settlements, covering both classes, were negotiated by attorneys representing container purchasers only, and that those attorneys subordinated the interest of sheet plants to the interest of their clients.” Id. at 207. There, we held that the alleged conflicts of interest did not infect the pre-January 5 settlements. The challenge of inadequacy in the instant appeal differs from that in Adams Extract. Here there is no allegation of a conflict of interest, for the sheet plant plaintiffs, had their own representatives by this time. The alleged error is based only on inadequacy. As we said in Adams Extract, the proof of adequate representation is in the adequacy of the settlements. Id. at 212. As determined below, the settlements were adequate.
Second, the sheet plant dissidents argue that there was no rational basis for the surrender of their claims. Third, they claim that the district court’s basis for approval of the settlements was inadequate. These arguments address the three-part test set out in Adams Extract: the district court must estimate damages, estimate likelihood of recovery, and then exercise its discretion to determine whether the settlements are fair, adequate, and reasonable. Pursuant to a remand order of this court in Adams Extract, the district court, on June 4, 1981, entered additional findings of fact and conclusions of law concerning the preJanuary 5 class action settlements. The district court found that the $14.9 million set-aside amount bore the same relation to the total settlement fund as the dollar value of corrugated sheets sold by the eleven defendants participating in the post-January 5 settlements bore to all corrugated material sold by them. Further, sheet plants purchased 72% of all corrugated sheets sold, thus justifying the $11 million actually allotted, which is 73.8% of $14.9 million. The district court’s estimate of damages is sufficiently detailed to permit review. It disposes of the dissidents’ argument that there was insufficient investigation into the range of the sheet plants’ damage.
As for likelihood of success on the merits, the district court described testimony in the related criminal trial indicating that “purchasers of corrugated sheets were overcharged to a lesser extent than purchasers of corrugated containers.” The district court also made findings regarding the container class’ likelihood of success in general and against each individual defendant. These findings are sufficiently detailed to permit review, see In re Corrugated Container Antitrust Litigation, issued this day, 659 F.2d 1322 (5th Cir. 1981) [Nos. 80-1018 and 80-1103, Oct. 29, 1981]. Most of those findings apply to the sheet plant subclass’ likelihood of prevailing. The additional findings also describe in detail the negotiations surrounding the creation of the $14.9 million set aside fund. The district court noted that only one member of the sheet plant subclass filed a timely objection to the sheet plant subclass’ application for the allocation of $11 million from this set aside fund. These factors are relevant to the approval process. Thus, we have sufficient findings to allow us to review the district court’s exercise of discretion in approving the sheet plant settlements. Our task is limited to reviewing the approval of the settlements for an abuse of discretion. Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977); Young v. Katz, 447 F.2d 431 (5th Cir. 1971). Since approval was so clearly indicated by the findings made, the approval was well within the ambit of the district court’s discretion.
Finally, some dissident container purchaser plaintiffs complain that the district court erred in approving $11 million for the sheet plant plaintiffs because this sum was too large and prejudiced the container purchasers. This argument was raised and rejected in Adams Extract, 643 F.2d at 210. It is likewise rejected here.
AFFIRMED.
. The Continental Group, Inc., Inland Container Corp., Longview Fibre Co., Menasha Corp., Stone Container Corp., and Weyerhaeuser Co.
. By “dissident” we mean only that these members of their respective subclasses dissent from the action taken by the representatives of those classes.
. Great Northern Packaging Corp. and Huron Packaging Corp.
. CFS Continental, Inc., Harold Freund Baking, Harold Freund Baking Co. of San Jose, Harold Freund Baking Co. of Florida, Harold Freund Baking Co. of Hawaii, Inc., Barg & Foster, Inc., Melster Candies, Inc., Allied Van Lines, Inc., Townhouse Furniture, Penthouse Furniture, Ltd., Denver Meat Co., West Coast Farms, Inc., Sierra Meat & Produce Co., Inc., Moyer Chemical Co., Andre-Boudin Bakeries, Inc., Wittek Golf. Supply Co., Inc., Carrón Manufacturing Co., Ilikon Corp., Rossville Packing Co., Erie Seating Packing Co., A.J.P. Foods Products Co., and D.O.B. Food Products Co.
. Container Corp. of America, Green Bay Packaging, Inc., MacMillian Bloedel, Inc., Olinkraft, Inc., Owens-Illinois, Inc., St. Joe Paper Co., Stone Container Corp., U.S. Corrugated Fibrebox Co., Weyerhaeuser Co.
. See In re Corrugated Container Antitrust Litigation, Adams Extract Co. v. Chesapeake Corp. of Virginia, 643 F.2d 195 (5th Cir. 1981).
Reference
- Full Case Name
- In re CORRUGATED CONTAINER ANTITRUST LITIGATION. ATLAS CONTAINER CO., INC., CFS Continental, Inc. v. ALTON BOX BOARD CO., Olinkraft, Inc., Container Corp. of America, and Great Northern Packaging Corp., In re CORRUGATED CONTAINER ANTITRUST LITIGATION. ATLAS CONTAINER CO., INC., Great Northern Packaging Corp., CFS Continental, Inc. v. ALTON BOX BOARD CO., Container Corporation of America, Defendants-Appellants-Appellees
- Cited By
- 1 case
- Status
- Published