The Justice Department filed a proposed consent decree yesterday that would end its civil antitrust case against 21 present or former folding-carton manufacturers.
The proposed agreement, which must be approved by a federal judge in Chicago, would end the largest federal antitrust action since the steel industry case of 1964, and contains some of the strictest provisions ever imposed on admitted price-fixers.
The civil suit was filed Feb. 18, 1976, along with criminal indictments against 23 firms and 50 former or current officers charging them with fixing prices over a 14-year period ending in 1974.
The companies charged had annual sales of $1 billion in 1973, representing about 70 present of industry sales.
Seventy of the 73 defendants pleaded no contest to the criminal charges, and 15 were sentenced to jail terms of from five days to six months, although most of the terms were sharply reduced in later deliberations. All defendants that pleaded no contest were fined anywhere from $100 to $45,000.
Two individuals, one from Potlach Corp. and another from Consolidated Packaging Corp., were acquitted, and Consolidated, which pleaded not guilty, was convicted after a three-week jury trial in Chicago in January 1977.
Consolidated is the only defendant in the civil case not to agree to the proposed consent judgment. Another firm, Michigan Carton Co., was not named as a defendant in the civil complaint because of its merger into St. Regis Paper, another defendant.
The consent decree is the first since John Shenefield, assistant attorney general for antitrust, warned in a speech three weeks ago that he would be seeking considerably stronger provisions in future price-fixing consent decrees.
The provisions of the agreement, developed during what one Justice Department official called "extremely tough negotiations," call for the defendants to implement an affirmative antitrust compliance program over the next 10 years, in addition to banning them from conspring to fix prices, allocate customers, submit non-competitive bids or exchange pricing information for the next 25 years.
Certain exployes of the defendants must also, for five years, file written reports of price communications with other folding-carton companies or file annual certification that they had no such communications.
The folding cartons involved are used to package food products, such as cereals and candy, drugs, cosmetics, household supplies, toys, hardware, distilled products and a host of other items.
The Justice Department said this was the largest price fixing case - in terms of annual sales by the defendants - since the steel case of 1964; it is the largest since the electrical equipment price-fixing cases in 1960.
The defendants were charged with conspiring to fix prices by agreeing not to underbid a competitor's price, by agreeing on price increases to common customers and by agreeing on the list prices of certain cartons.
The companies signing the agreement are:
Alton Box Board Co. of Alton, iii.; American Can Co. of Greewich, Conn.; Brown Co. of Pasadena, Calif.; Burd & Fletcher Co. of Kansas City; F.N. Burt Co. Inc. of Buffalo, N.Y.; Champion International Corp. of Stamford, Conn.; Container Corp of America of Chicago; Diamond International Corp. of New York; EasTex Packaging Inc. of Silsbee, Tex.; Federal Paper Board Co., Inc., of Montvale, N.J.; Fibreboard Corp. of San Francisco; the A.L. Garber Co. Inc. of Cleveland; Hoerner Waldorf Corp, of St. Paul, Minn.; the International Paper Co. of New York; Interstate Folding Box Co. of Middletown, Ohio; The Mead Corp. of Dayton, Ohio; The Packaging Corp. of America of Evanston, iii.; The Potlatch Corp. of San Francisco; Rexham Corp. of Charlotte, N.C.; St. Regis Paper Co., of N.Y.; and the Weyerhaeuser Corp. of Tacoma, Wash.