Eight Drywall Makers Implicated in Price-Fixing Suit

Class-action suit alleges collusion on 35% price increase, elimination of job quotes

Goodyear, Ariz.-based Sierra Drywall Systems picked up its class action suit against eight drywall makers—including USG and National Gypsum—after dropping one filed late last year in the northern district of Illinois, this time alleging that the group conspired to increase wallboard prices by 35% beginning September 2011 while cutting out the industry practice of discounting large orders, according to documents filed Wednesday, Jan. 2, in a Pennsylvania district court. In its complaint, Sierra alleges that the firms did not seek to drop prices or reinstate job quote policies during 2012, and that six announced plans this fall to increase prices by as much as 30% in 2013.

Sierra claims that the manufacturers' projections for minimal industry growth in 2012, along with an excess of drywall product on the market, "would have made it virtually impossible for any Defendant independently to impose and maintain a substantial price increases on its customers in the absence of collusion."

The company notes that by eliminating the job quote policy, the product makers could supervise each others' behaviors to avoid undercutting the alleged pricing conspiracy given that the three largest defendants in the suit comprise more than 60% of gypsum board sales in the U.S., according to court documents.

The antitrust suit alleges that CertainTeed, USG, LaFarge North America, National Gypsum, Georgia-Pacific, American Gypsum, Temple-Inland, and PABCO Building Products conspired to increase prices and eliminate their respective job-quote practices.

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