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Amcor, Visy Class Action Lawsuit To Be Test Case
June 2, 2010 Box Biz
A class action lawsuit against Australian packaging companies Amcor Ltd. and Visy Industries Ltd. will test out a defense against price-fixing in which the plaintiffs can only prevail if they did not pass on higher prices to their own customers, reports The Sydney Morning Herald.
The fallback argument, which is based on the premise that if the price increases were passed on then no loss was suffered, is in addition to the two companies’ primary defense that they did not overcharge purchasers of paperboard boxes.
However, when this argument was raised May 20 in Federal Court, Ian Wylie, the attorney for thousands of box purchases responded that “as a proposition of law, pass-through is not available as a defense.” He said that none of his clients had been able to pass on to their own customers the alleged overcharging during a five-year cartel.
Justice Peter Jacobson, however, said that the argument might be right but is based on an American case law that has not been tested in Australia.
The issue will be “central and critical” to the defense, Amcor’s solicitor Richard Harris told the court. He said that “a very significant portion” of any overcharge that did occur would have to have been passed on to the plaintiffs’ customers, and noted that complex accounting and economic principles were involved.
Wylie said that his clients, many of whom are small, are not always able to pass on price increases, which are determined by their customers.
The May 20 hearing involved an application by Amcor and Visy asking the court to order some of the plaintiffs to come up with documents on their pricing practices. The case is set to go to trial in March 2011. Filed in 2006, the class action charges that senior executives of Amcor and Visy colluded to fix paperboard box prices, initially in 2000 and in subsequent secondary agreements.
In March, Amcor said that an expert report commissioned by the plaintiffs estimated damages at $388.1 million, plus millions in interest.
