Three drywall manufacturers have agreed to pay a class of direct purchasers $125 million to settle price-fixing claims pending in multidistrict litigation (MDL) being overseen by a Pennsylvania federal court. These settlements agreements bring the total settlement amount for the class up to $190.7 million. The settlement will end the direct purchasers’ portion of the litigation.

National Gypsum, Eagle Materials Inc. and PABCO Building Products were the last of seven Defendants in multidistrict litigation that began in 2013. Previous settlements with three other companies – Lafarge North America Inc., TIN Inc. (or Temple-Inland) and USG Corp. – bring the total amount of settlements for direct purchasers in the case to nearly $191 million. In 2016, U.S. District Judge Michael Baylson of the Eastern District of Pennsylvania granted summary judgment as to a seventh Defendant, CertainTeed Corp.

The latest settlements were made with affiliates of American Gypsum Co., National Gypsum Co. and PABCO Building Products LLC. The prior agreements were reached with three other manufacturers, including Lafarge North America Inc. Kit A. Pierson, a partner with Cohen Milstein who served as co-lead counsel in the case, said in a statement:

We are pleased with this settlement for our class of 14,000 plaintiff entities and believe it sends a strong message to the rest of the industry. When companies violate the antitrust laws and drive up prices for their customers, they will be held accountable.

The suits, which were consolidated in 2013, accuse the drywall manufacturers of conspiring to hike prices starting in 2011, while the companies have argued they were just following the lead of American Gypsum, which was the first to raise its prices. The buyers also allege the companies made agreements to change their price quoting practices around the same time, conspiring to no longer provide so called job quotes, which used to lock prices in for the duration of a specific project regardless of market fluctuations.

In August of last year Judge Baylson certified a class of direct purchasers, which includes distributors, buying cooperatives and contractors, that purchased paper-backed gypsum wallboard directly from the Defendants anytime in 2012 or 2013. However one day later, the judge rejected a certification request from a group of indirect buyers that said they purchased the products from third parties such as The Home Depot Inc. or Lowe’s Companies Inc. between 2012 and the present. Judge Baylson found the indirect purchasers failed to provide a feasible way of determining class membership, and knocked the group’s proposal for a class period that extends to the present.

The direct purchasers are represented by H. Laddie Montague Jr., Eric L. Cramer, Ruthanne Gordon, Michael C. Dell’Angelo and Candice Enders of Berger & Montague PC; Kit A. Pierson and David A. Young of Cohen Milstein Sellers & Toll PLLC; and Eugene A. Spector, Jeffrey J. Corrigan, Rachel E. Kopp and Jeffrey L. Spector of Spector Roseman Kodroff & Willis PC. The case is In Re: Domestic Drywall Antitrust Litigation, (case number 2:13-md-02437), in the U.S. District Court for the Eastern District of Pennsylvania.


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