The Finnish paper company Stora Enso Oyj agreed to pay $8 million to end a nearly nine-year-old antitrust lawsuit accusing a former unit of conspiring to fix prices for purchasers of coated paper used in magazines and catalogs.
According to a filing on Monday with the U.S. District Court in Bridgeport, Connecticut, the settlement resolves claims against Stora Enso and the former Stora Enso North America Corp unit, which was sold in 2007 and is now known as NewPage Wisconsin System Inc after going through bankruptcy.
Paper purchasers had accused the unit of conspiring with rivals to inflate the price of "publication paper" used in magazines such as Time and Reader's Digest and catalogs such as those of JC Penney Co between October 2002 and September 2003.
Stora Enso, rather than NewPage, will fund the settlement, avoiding the risk that a bankruptcy judge may reduce the payout, lawyers for the purchasers said. "Plaintiffs believe they have obtained a fair and reasonable resolution," they added.
The settlement has been submitted to U.S. District Judge Stefan Underhill for preliminary approval.
Another Finnish company, UPM-Kymmene Oyj, agreed in 2007 to pay $9 million to settle related claims.
Daniel Small, a partner at Cohen Milstein Sellers & Toll representing the purchasers, said approval of the Stora Enso accord would end the litigation, which began in November 2004.
"We believe that it's a good result for the class members who otherwise would have faced a very difficult situation," in light of the NewPage bankruptcy, he said.
David Marx, a partner at McDermott Will & Emery representing Stora Enso, said: "Stora Enso is confident that it would have prevailed if the trial had gone forward. It settled to put an end to eight years of litigation involving conduct that occurred a decade ago."
The settlement was reached after a federal appeals court in New York last August said Underhill erred in having previously dismissed the case against the Stora Enso unit.
UPM had received immunity from U.S. prosecutors in February 2006 in return for cooperating in their probe into price-fixing.
The former Stora Enso unit was indicted 10 months later on criminal price-fixing charges, but was acquitted by a federal jury in Connecticut in July 2007, court records show.
The case is In re: Publication Paper Antitrust Litigation, U.S. District Court, District of Connecticut, No. 04-md-01631.