Judge Approves $55M Drywall Price Fixing Class Action Settlement

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Four class action settlements were granted preliminary approval by a Pennsylvania federal judge that were reached in a drywall price fixing multidistirct litigation totaling $55 million.

U.S. District Judge Michael Baylson gave approval of the four class action settlements, which includes USG Corp. paying $39.25 million to direct purchasers of gypsum wallboard and $8.75 million to indirect purchasers of gypsum wallboard. TIN Inc. will also pay $5.25 million to direct wallboard purchasers and $1.75 to indirect purchasers, the approval of the drywall class action settlement said.

“The court finds that the proposed settlement with USG … is sufficiently fair, reasonable and adequate,” Judge Baylson wrote in the order approving the USG direct purchaser class action settlement.

“The settlement agreement was negotiated at arm’s length by experienced counsel acting in good faith; and there has been adequate opportunity for discovery for experienced counsel to evaluate the claims and risks at this stage of the litigation,” Judge Baylson added.

The drywall class action lawsuit MDL includes a total of seven drywall material makers. The other companies charged with price fixing in the class action lawsuit are

Georgia-Pacific LLC, CertainTeed Gypsum Inc., American Gypsum Co. LLC, PABCO Building Products LLC and Spangler Cos. Inc.

USG makes up about 26 percent of gypsum wallboard business and TIN accounts for seven percent of the business.

According to the plaintiffs in the drywall material class action lawsuit MDL, “the TIN Settlement is the first settlement among defendants with small market shares; the USG settlement is the first settlement among defendants with large market shares.”

They contend that “such ‘ice breaker’ settlements should increase the likelihood of future settlements.'”

The first drywall price-fixing class action lawsuit was filed in December 2012, after there was allgedly a huge hike in prices for gypsum wallboards in January 2012, which the class action lawsuits alleged were part of a coordinated effort and were the largest price increases for drywall in more than 10 years.

The class action lawsuits also alleged that the drywall companies stopped a practice of giving drywall purchasers “job quotes,” in which they would tell the purchasers a total price for an entire project, locking the drywall makers into the price quoted. However, when the drywall companies stopped giving job quotes, the class action lawsuits explained, it helped make it easier for the purchasers to notice changes in pricing.

There were a total of six drywall class action lawsuits filed by purchasers who said that the price increases were not due to market forces or an increase in prices for the materials to make the drywall boards. The six price fixing class action lawsuits were filed in Pennsylvania, Illinois and North Carolina and were coordinated into the MDL in April 2013.

Judge Baylson said that USG and TIN agreed to the price-fixing class action lawsuit, but that the settlement does not amount to an admission of guilt, saying that the companies deny any wrongdoing in the matter.

There will be a fairness hearing on the class action settlements on July 15.

The direct purchaser plaintiffs are represented by Spector Roseman Kodroff & Willis PC, Berger & Montague PC and Cohen Milstein Sellers & Toll PLLC.

The indirect purchaser plaintiffs are represented by Green & Noblin PC, Block & Leviton LLP and Finkelstein Thompson LLP.

USG is represented by Bartlit Beck Herman Palenchar & Scott LLP. Counsel information for TIN was not immediately available.

The Drywall Price Fixing Class Action Lawsuit MDL is In re: Domestic Drywall Antitrust Litigation, 2:13-md-02437, in the U.S. District Court for the Eastern District of Pennsylvania.