Round timber cartel in Baden-Württemberg: Ausgleichsgesellschaft für die Sägeindustrie sues German federal state of Baden-Württemberg for €416 million damages
Stuttgart, 2 July 2019: A group of sawmills seeks compensation from the state of Baden-Württemberg totaling around €416 million following the state’s acting as the ring leader in a distribution cartel. The state centralized the sale of the majority of round timber from its own forests as well as from its competitors. Sawmills suffering from the lack of competition have joined forces to seek damages for the cartel overcharges. Prof. Dr. Rüdiger Lahme and Dr. Andreas Ruster of the law firm Quinn Emanuel Urquhart & Sullivan, LLP have initiated the action on behalf of 36 sawmills representing more than 50% of the wood cutting in Baden-Württemberg. The action is currently pending before the District Court of Stuttgart.
Rüdiger Lahme points out: “This is an exceptional case, because the state has for decades publicly centralized the distribution of round timber from Baden-Württemberg’s forests through its state forestry administration. Sawmills that depend on the supply of round timber have been virtually unable to avoid buying from the state. There was no significant competition on the supplier side – the high transport costs, which reduce the procurement radius, further deteriorated the sawmills’ bargaining position.”
After years of investigation, the German Federal Cartel Office (“Bundeskartellamt”) finally prohibited the state's distribution system in 2015. The Düsseldorf Court of Appeal confirmed the Bundeskartellamt’s decision against the state's appeal in 2017. It was only before the Federal Supreme Court (“Bundesgerichtshof”) that the state achieved a victory in 2018 – albeit for purely formal procedural reasons. “The judgment of the Bundesgerichtshof does not change anything with regard to the antitrust violation, which is the basis for the complaint,” says Dr. Andreas Ruster. This has also been recognized by the state of Baden-Württemberg, which is undergoing a major reform of its practices and intends to give up the centralized distribution of timber and restricts itself to selling round timber only from its own forests.
The sum being claimed is the result of an extensive economic quantum analysis. The calculation is at the lower end of the scale of damages actually suffered, as the plaintiff’s approach is a conservative one. Jochen Winning, as the plaintiff’s representative, explains: “It is important for the sawmills to continue cooperating well with the state in the future. For that reason, an exaggerated complaint was never an option. However, the sawmills do want at least partial compensation. It should also not be forgotten that some sawmills could not bear the high purchase prices in the long run and went out of business.”
Jochen Winning simply wants the state to face up to its responsibility: “In the end, the state is litigating against its own citizens and taxpayers.”
If, however, the state prefers litigation, the plaintiff both has the financial and legal resources to pursue the action through all instances.
Press contacts:
Attorney Jochen Winning, ASG Ausgleichsgesellschaft für die Sägeindustrie GmbH, Friedrichstr. 13-15, 90762 Fürth, Tel: 0911-950-999-880, Mobil: 0151-2265-9163,
E-Mail: mail@kanzlei-winning.de
Attorney Prof. Dr. Rüdiger Lahme, Quinn Emanuel Urquhart & Sullivan LLP
An der Alster 3, 20099 Hamburg, Tel.: 040-89728-7004, Mobil: 0179-7763-560,
E-Mail: ruedigerlahme@quinnemanuel.com