IN TIff UNITEI) STATES DISTRICT COURTFOR THE WESTERN DISTRICT OF ARKANSI

BEST PALLETS INC. and BEST INDUSTRIALPALLETS. LL.C. by and through their President andOwner JAMES L. TAYLOR; ITNOLAP PALLET &CRATING, INC., by and through its President andOwner WILLIAM M. CLARK; ITNOLAP PALLET& CRATING, L.L.C, by and through its President andHalf-Owner WILLIAM M. CLARK; PALLETEXPRESS, INC., by and through its Vice-Presidentand Owner LYNN RIDGE BELL; and GOEMAN'SWOOD PRODUCTS, INC., by and through itsPresident and Owner DANNY J. GOEMAN. Forthemselves and all others similarly situated,

PLAINT lEES AND PROPOSED CLASSREPRESENTATIVES,

vs.

BRAMBLES INDUSTRmS, INC., and BRAMBLESNORTH AMERICA, INC., dlb/a CHEP USA,

DEFENDANTS.

1) 8, DIStRICT COURTWESTERN 9fF ARKANSAS

FEB 062898

CHRIS N. JI)INSON, CUBic

Case No:

Judge: fljt-

CLASS ACTION CONWLAINT—FOR DAMAGES, INJUCTIVERELIEF, COSTS ANDATTORNEYS FEESIS U.S.C. § 2. 15 U.SC. § 15(a)[Clayton Act § 41. 15 U.SC § 26

[Clayton Act § 161 and 15 US.C. § 20

[as amended by Section 4; Clayton Act15 U.S.C. § 15] 15 U.S.C. § 22— Rule23(b)(3) Federal. Rules of CivilProcedure [The Class Action RulcJ

PLAINTIFFS REQUEST A JURYTRIAL — Rule 38(b) Federal Rules ofCivil Procedure

Plaintiffs Best Pallets Inc. and Best Industrial Pallets. LLC, by and through their

President arid Owner James L. Taylor; ITNOLAP Paflet & Crating, Inc., by and through its

President and Owner William M. Clark; ITNOLAP Pallet & Crating, L.L.C., by and through its

HalF-Owner William M. Clark; Pallet Express, Inc., by and through its Vice-President and

Owner Lynn Ridge Bell; and Goeman's Wood Products, Inc., by and through its President and

Owner Danny J. Goeman, on behalf of themselves and all others similarly situated (collectively

referred to as "Pallet Recyclers"), bring this action for relief against defendants Brambles Inc.

and Brambles North America, Inc., dlb/a CHEP USA.

In support of Plaintiffs' Class Action Complaint, the pallet recyclers allege as follows:

IN TIIE TINITED STATES DISTRICT COURTF.I.'OR THE WESTERN DISTRICT OT'ARKANSAS

BEST PAILETS INC. and BEST INDUS'|]RIA[-PALLEI'S, L.L.C., hy and through their President antlOwncr JAMES L. TAYLOR; ITNOLAP PALLET &CRATING, lNC., by and through its Ptesidcnt andOwner WII-LIAM M. CLARKT ITNOLAP PALLET& CRA'I INC, L.L.C., by and through its Preliident andHalt'-Owncr WILLIAM M. CLARKI PALLETEXPRESS, INC., by alld through its Vice-Presidcntand Owner LYNN RIDCE BL,LL: and GOEMAN'SWOOD PRODUCTS, INC., by and through itsPresident turd Owner DANNY J. COEMAN. lirrthemselves and all others sirnilarly situated,

PLAINTIF}.S AND PROPOSED CLASSREPRESENTATIVES,

vs.

BR^MBLES INDUSTRIES, INC., and BR C,MBLESNORTH AMERICA, INC., d/b/a CHEP USA,

DEFENDANTS.

wrsf[$rvBffif'%%ufiirnFEB |]62008

$iFJS R. J*fiisqi, clfil(

IIEPIJTYO.fl(

Case NJudge:

CL^{SS ACTION COMPLAINT-FOR DAMAGES, INJUCTIVERELIEF, COSTS ANI)ATI'ORNEYS FEES15 U.S.C. $ 2, 15 U.S.C. $ ls(a)[ClaJton Act $ 41, I5 t].S.C. $ 26[Clayton Act $ 16 | arul l-5 I.I.S.C. $ 2t)[as amerrded by Section 4; Clayton Act15 U.S.C. $ l .5l 15 U.S.C. g 22 - Rule23(bX3) Federal Rules of CivilPtoccdure [The Class ActioTl RulcJ

PLAINTIFFS REQUEST A JURYTRIAL - Rule 38(b) Federel Rules ofCivil Procedure

Plaintiffs Best Pallets Inc. and Bcst Industrial Pallets, I-.t-.C., hy and througfr their

President and Owner Jamcs L. Taylor; ITNOI.AP Pallet & Crating, Inc., hy arrd through its

Prcsident and Owner William M. Clark; ITNOLAP Pallet & Crating, L.L.C., by and through its

Hall-Ownct William M. Clark; Pallet Exprcss, lnc., by and through its Vicc-Prcsident antl

Owncr Lymr Ridge Belll and Gocrnan's Wood Products, Inc., by and through its President and

Owner Dnnny J. Coeman, on behalf of thernselves nnd all others similarly situated (collcctively

refened trl as "Pallct Recyclers"), bring this xction for rclicf against defenrlants Btamblcs Inc.

and Brambles Notth Amcrica, Inc., d/b/a CHEP USA.

In support of Plaintiffs' Class Action Complaint, the pallet recyclers allege as fbllows:

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 1 of 30

I. NATURE AND SUMMARY OF TUE ACTION

1. This is a class action brought under the Sherman Antitrust Act 15 U.S.C. § 2, 15 U.s.c.

§ 15(a) [Clayton Act § 4] and 15 U.S.C. § 26 l.Clayton Act § 16], to Sdress anticompetitive

conduct by a major enterprise in the wooden pallet industry. Pallets are portable wooden

platforms used to facilitate the transportation and storage of raw materials, other goods and

Finished products from manufacturers or distributors to end users, typically retailers. Pallets are

used in virtually all industries across the United States. (See photos ot palieLs at Paragraph 16 below),

2. The entities arid individuals named as plaintiffs Cpallet recycl.ers" or "recyclers") are in

the business, either partially or exclusively, of recycling wood pallets, these pallet recyclers

constitute the class proposed. The pallet recyclcrs generally gather pallets from end users, repair

them if necessary, and oI'fer the recycled pallets for sale to manufacturers and others requiring

them for transport or storage; i.e.: the recycled pallet market.

3. The pallet recyclers file this action on behalf of themselves and all similarly situated

entities and individuals in the lower 48 states of the United States engaged in. the business of

wood pallet recycling. They seek threefold actual monetary damages, costs of suit, including

reasonable attorneys Fees, and injunctive relief, as provided by 15 U.S.C. § 2. 15 U.S.C. §15(a)

[clayton Act § I, 15 U.S.C. § 26 [Clayton Act § 16] and 15 U.S.C. § 20 [as amended by Section

4; 15 U.S.C. § 22, and trial by jury, FED. R. Civ. p. 38(b).

4. The defendant ("CHEP") is in the business of manufacturing, repairing and leasing wood

pallets to manufacturers and others requiring pallets for transport or storage. The pallet reeyclers

and CIIEP compete in the market for placement of wood pallets with manufacturers and others

who use wood pallets in their business and commerce.

CLASS ACTION COMPLAINT — PAGE 2

I. NATURE AND SUMMARY OI."I'HE ACTION

I. This is a class actinn brought urdcr the Shennan Antitrust Act 15 U.S.C. $ 2, 15 U.S.C.

g t5(a) lClayton Act $ 4l and 15 U.S.C. $ 26 JCla].ton Act $ 16l, to address arrticornpctitive

conduct by a major enterprise in the wrroden pallct industry. Pallets are portahle wtlodcn

platforms used to facilitatc the transportation and storage of raw rnatedals, othcr goods and

l'inished products tiorn manufacturers or distributor$ to end usets, typically retailers. Pallets are

used in virtually all industries across the United States. (.iee photos ol'prllets at Pflruefflph 16 below).

2. The entities and individuals namcd as plaintiffs ("pallet recyclers" or "recyclcrs") are in

the husiness, either partially or exclusively, trl' recycling wood pallcts, these pallet recyclers

constitute the class prttposed. The pallet rccyclcrs generally gather pallets from end users. tcpait

them if necessary, and ol'fer the recyclcd pallcts for sale to manufacturers and others requirittg

thcm for transpon or storlge; i.e.; the recycled pallet ntarket.

3. The pallet recyclers t'ile this action on behalf of themselves and all similarly situatcd

entities and individuals in the lowet 4ti statcs of the United States engaged in the busincss of

wood pallet recycling. They seek threefbld actual monctary damages, costs of suit, including

reasonable attomey$ f'ees, and injunctive rclicf, as provided by I5 U.S.C. $ 2, 15 U.S.C. $ l5(a)

[Clalton Act g 41, 15 U.S.C. $ 26 lClaf.ton Act $ l6l nnd 1.5 U.S.C. $ 20 [as amended by Section

4; l5 U.S.C. $ 22, and trial by jwy, FED. R. Cry. P. 38(h).

4. The det'endant ("CHEP") is in the business of manufacturing, repairing and leasing wood

pallets to manufacturcrs and others requiring pallets for tlansport or $torage- The pallct rccyclers

and CIIEP compete in the tnarket for placcmcnt of wood pallets with manufacturers and othcrs

who use wood pallets in their business and comrncrcc.

CI-A,SS AcTIoN COMPLAIN'I._ PACE 2

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 2 of 30

5. The pallet recyclers allege that CHEP has used and continues to usc threats of legal

action against them, as well as actual lawsuits, civil and criminal with the intent of unlawfully

transferrin.g a portion of its business operational costs onto the pallet recyclers. Such costs,

which would otherwise have been borne by CHEP, relate to costs associated with the retrieval,

transport, sorting, handling and storage of CHEP pallets in addition to the general business costs

attributable to CHEP's pallets

6. CHEWs business conduct is intended to decrease its own costs of doing business, while

at the same time raising the recyclers' costs to levels that make them non-competitive against

CHEP in the wood pallet market.

7. As is more comprehensively described below, CHEP has used its economic strength to

develop and maintain a system of pallet distribution that is anticompetitive in its intent and

effect. The CHEP system, and its conduct in Furtherance thereof, causes market distortion, and

unlawfully anticompetitive and, if not stopped by judgment, monopolistic effects, as follows:

a. By purposefully causing to be shifted to the recyclers and the class what properly

should he CHEWs own overhead, direct and indirect costs attendant upon the

ordinary operation of a wood pallet business, CHEP raises its rivals' costs to a

non-competitive level when they, CHEP and recyclers, each seek to supply pallets

to potential market place customers.

b. What would be, absent CHEP's unlawful conduct, a normative and otherwise

competitive market for the acquisition of pallets is transformed into a market in

which customers for pallets arc confronted by a market of higher prices as

artificially and unlawfully manipulated by CHEP. This is true even though CHEF

may offer pallets to customers at an ostensibly lower lease rather than sale price.

CLASS ACTION COMPLAINt - PAGE 3

5. 'l'he pallet recyclers allege that CHEP has u$ed and conti ue$ to usc thrcats of legal

action against them, as well as actual lawsuits, civil and criminal with the intcnt of unlawfr.rlly

transfening a porlion o[ its husiness operational costs onto thc pallct recyclers. Such costs,

which would otherwise have been home hy CHEP, relate to costs associatcd with the retrieval,

tlanspofi, softing, handling and storage of CHEP pallet$ iTr additiorl to the getrclal business costs

attributable to CHE-P's pallets.

6. CLIEP's business conduct is intended to decrease its own costs o{'drlirtg husincss, whilc

at the salne timc raising thc recyclers' costs to levels that make them non-competitive against

CHEP in lhe wood pnllet market.

1 . As is morc comorchensivelv described below. CHEP has usetl its economic stretrgth to

tlevelop and mainlain ;r tiysterfl rrf' pallet distribution that is anticompctitive in its intent and

effect. The CHEP system, anti its conduct in lhrthetance thetetrt, causes markct distorlion, and

r.urlawfully anticompetitive and, if not stopped by ju<lgment, monopolistic ef I'ects, as tollows:

b .

By purposefully causing to be shilted to the recycler$ and the class what properly

should he CHEP's own overhead, direct and indirect costs attendant upon the

ortlinary operation ol'a wood pallet husiness. CHEP raises its rivals' costs to a

non-competitive level when they, CFIEP and recyclets, each scck to supply pallets

to potcntial market place customers.

What would be, absent CHEP's unlawful conduct, a norrnative nnd othctwisc

compctitivc markct for thc acquisition of pallets is transfonned into a market in

which customcrs fbr pallcts arc confrontcd by a market of higher prices as

anificially and unlawfully manipulated by CFIEP. This is true even though CHEP

rnay offer pallets to customers at an ostensibly lower lease r ther thirn sale pricc.

CL^ss AcrroN COMPLAIM - PAGE 3

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 3 of 30

Absent CI-IEP's unlawful conduct, and in a free wood pallet market unburdened

by CHEF's overhead cost shifting to the pallet recyclers and the class, the wood

pallet market would present to the customer a truly competitive price from which

to select among recyclers and CHEP.

c. By its conduct as alleged throughout this complaint, CHEP's probability of

success at excluding pallet recyclers and the class creates a harrier to market entry

by potential competitive pallet recyclers who, through applying reasonable

business acumen and observation to the market in which they would compete with

CHEF, would forego entry because of the economically and artificially imposcd

barrier constructed by CHEP, making the recycler noncompetitive. Other pallet

recyclers are deterred from entering the market because the reasonablc recycler

contemplating such entry exercising due diligence will observe that CILEP enjoys

an artificially low overhead because of its unlawful scheme of cost shifting.

IL JURISDICTION AND VENUE

8. This court has original jurisdiction under 28 U.S.C. § 1331 because the federal question

alleged in this complaint arises under the Sherman and Clayton Acts. 15 US-C- § 15(a), 15

U.S.C. § 2 (as amended) and 26, respectively. The court has original jurisdiction under 28

U.S.C. § 1337 (conferring original jurisdiction arising tinder any act regulating commerce or

protecting tradc and commerce against restraints and monopolies).

9. Venue is proper in this district and court pursuant to 15 U.S.C. § 26 [Clayton Act § 41,

bccausc interstate commerce sigtuficant to this action has been carried on, in part, within this

district and among the several states. Venue is proper as well under 28 U.S.C. § 1391.

CLASS ACTION COMPLAINT — PAGE 4

Absent CFIEP's unlawful conduct, and in a frcc wood pallet market unburtlenetl

by CHEP's overhead cost shifiing to the prrllet recyclers nnd the class, thc wood

pallet mruket woultl present to the customer a truly competitive price from which

to rrelect amrrng recyclers and CIIEP.

By its conduct as alleged throughout this cornplaint, CHEP's probability of

success at excluding pallet recyclers rnd the class creirtes a harder trr rrurket cntry

hy potential cornpetitive pilllel recyclers who, through applying reasonable

business acurnen and observation to the market in which they would compete with

CHEP, would tbrcgo cntry bccause of the econorlically and artificially itnposcd

barrier constructed by CHEP, making the recycler noncompetitive. Other pallet

rccyclers arc detcrred from cntcring thc market bccausc thc rcasonablc recyclct

contemplating such entry exercising due diligence will obserue that CIIEP enjoys

an arlificially low overhead because of its unlawfr.rl scheme of cost shifting.

II, JURISDICTION AND \'EN[]E

8. This court hari original juristliction under 28 U.S.C. $ 1331 because the federal question

alleged irr this cofilplaint arises urlder the ShefinilTl and Clayton Acts, 15 tl.S.C. $$ l5(a), 15

U.S.C. $ 2 (as arnended) and 26, respectively. The court has original _jurisdiction under 28

U.S.C. $1317 (confcning original jurisdiction arising under any act tegulating comrncrcc or

protccting tradc and comnlcrcc against restraints and mrrnopolies).

9. Venue is proper in this district and coufi pursuant to 15 U.S.C. $ 26 lClayton Act $ 4],

bccausc intcrstatc commerce significant to this action has heefl carried rrn, in part, within this

district and arnong the several states. Venue is plopcr as wcll undcr 28 U.S.C. S I391.

CI.,ASS ACTION COMPI,AINT _ PAGE 4

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 4 of 30

[0. Venue is additionally proper in this district under 15 U.S.C. § 15(a), and 22:

"Any suit, action, or proceeding under the antitrust laws against a corporationmay be brought not oniy in the judicial district where it is an inhabitant, but alsoin any district where it may be found or transacts business; and all process in suchcases may he served in the district of which the corporation is an inhabitant, orwherever it may he found."

II - CHEP is found or transacts business in the Western District of Arkansas; and, in part, the

claims asserted in the present action arose in this district. CHEP regularly and continuously

conducts business in interstate commerce between and among the several lower 48 United States.

The interstate trade and commerce described in this action has been carried out, in part, within

the Western District of Arkansas.

111. THE PARTIES

12. The named plaintiffs and representatives of the class of pallet recyclers are:

a. BEST PALLETS INC. and BEST INDUSTRIAL PALLETS, L.L.C., by and

through their President and owner JAMES T.... TAYlOR, is a collective entity and

resident doing business at 1105 Ballman Rd, Fort Smith, AR 72901;

b. ITNOLAP PALLET & CRATING, INC., by and through its President and Owner

WILLIAM M. CLARK, is a resident of Tennessee doing business at 2111 N.

Thompson Lane, Murfrecshoro, TN 37129;

c. ITNOLAP PALLET & CRATING, L.L.C., by and through its Half-Owner

WILI..JAM M. CLARK, is a resident of Tennessee doing business at 100 Best

Industrial Drive, Jonesboro, AR 72401;

PALLET EXPRESS, INC., by and through its Vice-President and Owner LYNN

RIDGE BELL, is a resident of North Carolina doing business at 2821 Assembly

Road, Greensboro, NC 27405; and,

CLASS AcTioN CoM!-'LaJNT —PAGE 5

12.

t0. Venue is additionally proper in this district under 15 U.S.C. $$ I5(a), and 22:

"Any suit, action, or proceeding undcr the antitrust laws against a corpolatiollmay be brought not only in the.judicial district whcrc it is an inhabitant, but alsoin any district where it may bc found or transacts busincss; and all proccss in suchcases rnay be served in the district rrf which the corporation is an inhabitant, orwherever it mly be fttund."

I l. CHEP is found or transacts husiness i the Westem District ol'Arkansasi and, in part, thc

clairns assefted in the present action arose in this district. CHHP regularly and contiuuously

conducts business in interstate commerce between ard amonc thc several lower 48 United States.

Thc intcrstatc tradc and cornmcrcc descdhed in this actirrrr hirs heen carried out. in part, within

the Westem District oI Arkansas.

III. THE PARTIES

The narned plaintitl.r and reptesentatives of'the cla$$ o[ pallet recyclers are:

a. BEST PALLETS INC. and BEST INDUSTRIAL PALLETS. L.L.C.. bv and

through theii President anil owner JAMES I.. TAYI-OR, is a cttllective eTttity aTld

resident doing business at II05 Ballman Rd, Fort Smith, AR 7290I;

b. IINOLAP PALLET & CRATING, INC., by and through its Presidr:nt and Owner

WILLIAM M. CI-ARK, is a resident o[ Tennessee doing business at 2l I I N.

Thompson Lanc, Murfrccsboro, TN 37129;

c. ITNOLAP PALLET & CRATINC, L.L.C., by and through its Half-Owner

WII-I-IAM M. CLARK, is a resident of Teruessee doing business at 100 Best

Industrial Drive, Jonesboro, AR 72401;

PALLET EXPRESS, INC., by turd through its Vice-President and Owner LYNN

RIDGE BELL, is a resident oi North Carolina doing business at 2821 Assemhly

Road, Gneensboru, NC 27405; and,

CLAss Ac'floN COMPLAIN'I - PACE 5

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 5 of 30

GOEMAN'S WOOD PRODUCTS, INC., by and through its President and Owner

DANNY J. GOEMAN, is a resident of Wisconsin doing business at 5840 Hwy.

60 East, P.O. Box 270240, Hartford, WI 53027-0240;

13. Th.e CHEP Defendants are a group of related foreign and domestic entities engagcd in the

business of selling, renting, collecting, conditioning and reissuing pallets in every district in the

United States:

a. BRAMBLES INDUSTRIES, INC. and BRAMBLES NORTH AMERICA, INC.

dlb/a CHEP USA, may be found at 8517 Park Circle, Suite 400, Orlando, FL

32819-9040 for the purpose of service of process.

IV. FACTSA. Wood Pallets Are Introduced Into Commerce

1& Since its introduction in the early 20th century, the wood pallet has become a cornerstone

of American commerce. The advancement of packaging in the transport and merchandizing of

raw material.s and manufactured goods created the increased use of pallets because packaged

goods' surfaces allowed for stacking and securing in bulk thus making pallet movement

economical. A single employee using a forklift or hand-drawn pallet jack can now safely move

Far more raw materials or finished products than an army of his predecessors could have done at

tile turn of the century and do so economically and safely.

15. Palletized loads allow for much quicker turnaround of rail cars, ships and transport

trucks. They also increase warehouse storage capacity and the swift movement of materials

thereby reducing the need for additional warehouse capacity. Virtually all raw material and

finished products are transported on wood pallets to and from producers, manufacturers,

distributors, and retailers across the country during their journey through the production, sale and

use in today's distributive processes.

CLASS ACTIoN CONWLAINT —PAGE 6

e. GOEMAN'S WOOD PRODIJCTS, INC., by and through its President and Owner

DANNY J. GOEMAN, is a rcsidcnt of Wisconsin doing br.rsiness at 5840 Hwy.

60 East, P.O. Box 77O24O, Hartfbrd, WI 53027-0240;

13. The CHEP De(endants are group ol'related lirreign and dornestic erltitics ctrgagcd itr thc

busincss of sclling, renting, collecting, conditioning and reissuing pallets in every district in the

United States:

BRAMBLES INIIUSTRIES. lNC. and BIL4MBLES NORTI{ AMERICA, INC..

d,rbia CHEP USA, may bc found at 8517 Park Clircle, Suite 400, Orlando, FL

3?8 | 9-9040 fbr the pulpose of service of process.

IV. FACTSA, Wood Pallets Are Introduced Into Commerce

14. Since its irrtroductio irr the early 20th century, the wtrtrd pallet has becomc a corncrstonc

of American coflrmerce. The advancement of packaging in the transporl aml merchandizing o[

raw materials and manutactured gtrods created the increased use of pallets becausc packagcd

goods' surfaccs allowed for stacking and sccuring in bulk thus making pallet rlovement

econornical. A *inglc cmploycc using a fotklifi or hand-drawn pallct jack can llow safely tnove

Iar more raw nraterials or tjnished product$ than afl anny of his predecessots could havc douc at

thc tum of the century and do so economically and safely.

15. Palletized loads allow for rnuch quicker turnaround of rail cars, ships antl transport

trucks. They also increase warehouse storage capacity and the swift movement of materials

thcreby reducing the need for additional warehouse capacity. Virtually all raw matelial and

l'inisherl producur are transpotted on wood pallet$ to and liofi producers, tnanufacturcrs,

distribr.rtors, and retailers across the country dr.rring their joumey through the production, sale and

use in trtday's distributive processes.

CLASS ACl'IoN CoMPLAINT _ PACF,6

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 6 of 30

16. Standard size pallcts (4W' x 40"), the type of wood pallet most widely used in the U.S.,

carry loads oF up to 2000 pounds. Over a half billion pallets are manufactured annually and

approximately two billion paliets are currently in use in United States commerce. (Below are

pictures a CI-IEP-blue-wood pallet and a wood pallet).

17. Wood pallets are fungible. CHEF pallets are distinguishable in appearance from other

pallets in circulation jy due to their blue painted surfaces and the acronym "CHEP" painted on

the pallet with words asserting perpetual ownership.

B. The Wood Pallet Business; Sold or Leased

18. There are essentially two business models utilized in the wood pallet business: the "sale

model" and the "lease model." The sale of pallets has traditionally been the dominant business

model in the United States. A far greater portion of the market for wood pallets in the United

States follows the "sale model." as opposed to the "lease model.."

CLASS ACTION COMpLA!nr —PAGE 7

16. Standard sizc pallcts (48" x 4t)"). thc type of wood pallet most widely used in the U.S.,

carry loads ol'up to 2000 pttunds. Over a half billion pallets are manufacturcd annually and

approximately two billion pallets ale cunently in use in lJnited States c()firrllerce. (Below arc

pictures a CHEP-blue-wood pallet and a wood pallet).

fl. Wood pallets are fungible. CIFIEP pallets are distinguishable in appearance from trther

pallets in circulation onlv due to their blue painted surfaces and the acronym "CHEP" painted on

the pallet with worrls asserting pcrpetual ownership.

B, The Wood Psllet Business; Sold or Leflsed

18. There are essentially two business moilels utilized in the wood pallet busirtess: thc "salc

rnodel" and the "lease model." The sale of pallets has tra<litionally been the dornirtant husitrcss

model in the United States. A far gleater portion of the market for wood pallets in the llnited

States ['ollows the "sale model" as opposed to the "lease model."

CLASS AcrrroN CoMPLAIN I' - PACE 7

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 7 of 30

19. In the "sale model," a seller offers the pallet for a price to a purchaser needing it for

transport or storage of goods. Ownership of the pallet transfers from the seller ol the pallet to its

purchaser — generally a manufacturer or distrihiLtor — and there is no agreement between the

parties nor is there an obligation to return the pallet to its seller once the pallet is sent through the

buyer's distributive process.

20. In the sale model, the purchaser of a wood pallet may use the pallet to ship its raw

material or completed product to its customer. In this type of transaction the user at the end of

the distribution process is not the party that arranged for or purchased the wood pallet.

21. In a typical distribution scenario wood pallets upon which products are loaded, stored,

transported or used accumulate at an end user's site. Also typically, these pallets become excess

to the end user, they are not needed and the end iLser is left with the burden and added expense of

storing or disposing of them. The pallets accumulated on the end user's property are most often

so burdensome that he is anxious to be relieved of them to accommodate arriving goods and,

often to comply with local ordinances, health or tire codes.

22. The "lease model" differs front the "sales model" in two important respects. The

acquiring business leases a pallet rather than purchase it. The pallet lessor, CHEP, and lessee

enter into an agreement that the pallet will he returned to the lessor once the journey [or which

the pallet was leased is complete. The lease business model is more complicated because it

involves the logistics and costs associated with the tracking and securing the return oF the leased

pallet. For these reasons the lease model has been less common in the United States market.

C. Accumulated Pallets Lead to aSecondary Market for Pallet Recyclers

23. As a result of the predominance of the sale model, a secondary market developed over

decades for excess wood pallets that accumulate at an end user's place of business or property.

CLASS ACTION COMPLAINT PAGE 8

19. [n the "sale rnodel," a seller offers the pallet for a price to a purchaser needing it for

tran$port or storage of goods. Owuership of the pallet transfers frour the seller o[ the p:lllet to its

purchaser - generally a manulrrcturer or disttihutor - and there is no agrccmcnt bctwceu the

parties nor is there an obligation to retum the pallet to its seller once the pallet is sent through thc

buyer's distributive process.

20. In Lhe sale model, the purchaser of a wtrtrd pallet rnay use the pirllct to ship its raw

material or cornpleted product to its customer. In this tlpe of transaction the user at the end of

the distrihution proccss is not thc party that arrangcd tbr or purchascd thc wood pallet.

21. In a typical ditttributifil scenadrl wood pallets upon which products arc loadcd, stored,

transponcd or uscd accurnulatc at an cnd user's site. Also typically, these pallets become excess

to the end user, they :lre nr)t needed and the end user is lefi with the burde

and addcd cxpcnse of

storing or disposing of thern. The pallets accumulated on the entl user's property are mttst tltien

so burdensorne that he is a[\ious to be relieved of thern to accommodate ;rriving goods md,

often to comply with locul ordinances, health or tlre codes.

22. The "lease model" differs fiom thc "sales rnodel" in two important rcspccts. lhe

acquiring business leases a pallet rather than purchase it. The pallet lessor, CFIEP, and lessee

enter into an agreenrent that the pallet will he retumed to the lessor once the joumey lbr which

thc pallct was lcased is cornplete. The lease business model is more complicated because it

involves the logistics and costs associated with the tracking aml securing the return of'the lcascd

pallet. For these reasons the lease rnodel has bccn lcss conlmon in thc Unitcd Statcs nmrket.

C, Accumulated Pallets Lead to aSecondary Msrket for Psllet Recyclers

23. As a result of'the predoTnirrance of the sale model, a $econdary rnarket devclopcd over

decades for excess wood pallcts that accumulate at an end user's place of business or property.

CI-As.s AcTIoN CoMPLAINT - PACL 8

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 8 of 30

Entrepreneurs saw a business opportunity to solve the end user problem with the accumulation of

wood pallets by making them profitable as a business and convenient through reduction to the

end user of his costs incurred by having them accumulate. The innovative business of removing

unwanted pallets eventually served to accommodate an ever increasing demand for returning

used or renianufactured pallets at a lower price to the stream of interstate commerce. The

prescient and resourceful businessmen who entered this market became known as pallet

recyclers. It is they, the pallet recyclers, who comprise the proposed class; each named plaintiff

is a pallet reeycler.

24. The secondary market of recycled pallets has traditionally involved an agreement

requiring the class member(s) to remove unwanted pallets from the end user's property. Upon

taking possession of the used pallets the recycler is free to repair them and to offer the pallets for

sale to any entity or individual, thus reintroducing the wood pallets into the distributive stream of

comnierce.'

25. Within the wood pallet industry the practice of removing pallets from an end user's site

has become known as "spotting and switching trailers," 'drop and hook trailers" or "sweeping

the dock," among other colloquial terms. These are terms unique to the pallet recycling business

describing the recycler's obligation and methodology of removing all of the end user's wood

pallets.

26. Under the traditional agreement between an end user and a pallet recycler, the recycler

must take all of the user's wood pa.llets irrespective of the source or method by which the end

used acquired any specific wood pallet. The agreement is universally an all-or-nothing

Wood product data indicates the recycling and re-use of wood pallets prevents tile cutting of millions of tiees each

year.

ClASS ACTION COMPLAINT— PAGE 9

Entrcplcnrlurs saw n business opporlunity to solve the end user problem with the accurrtulatiotr of

wood pallets by mtrking them prol'itable as a husiness and cr)nvenient through rcduction to the

end user trf his costs incurrcd by having thcrn accumulate. The imrovative business of removing

unwantcd pallets eventually served to accoulmodate an eve[ increasing demand ltrr retumttrg

used or rcnunufacturcd pallcts at a lower price to the streflm of interstate courmerce. The

prescient and resourceful businessmerr who errterdd this ularket hccamc kuown as pallet

recyclers. lt is they, the pallet recyclers, who comprise the proposecl class; each n:rrtred plaintitT

is a pallet recyclet.

24. The secondaty market of' recycled pallets has traditionally involvcd an agreement

rcquiring thc class member(s) to relnove unwanted pallets from the end user's prttpetty. IJptrn

taking possession ol'the used pallets the recycler is iicc to repair thcrn and to offer the pallets for

sale to any entity or individual, thus reintroducing the wood pallets into the tlistributive strearn of

cotttntctcc.'

2-5. Within the wood pallet industry the prirctice of removing prllets tiom an cnd uscr's site

has bccomc known as "spotting ald switching trailers," "drop and hook trailers" or "rweeping

the dock," among othet colloquial ternrs. These are tenns uniqrre to the palldt rccycling business

dcscribing thc recycler's obligation and methodology of removing all of the end user's wrvrd

pallcts.

26. lJnder the traditional agreernent bctwccn an cnd uscr and a pallct rccycler, the recycler

rnust take all of the user's wood pallets inespective of the source or methotl hy which the ertd

useil acquired nny specilic wrxrd pallet. The agreernent is universally an all-or-nothing

I Wrxrrl prrluct rhta inalic tcs thr rccycli g rnd re.use ol wood prllets preverlls the cutting Df nri l l ions of uees eachvear.

CI,ASS ACTION COMPLAINT _ PAGE 9

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 9 of 30

proposition- Thus, the pallet recycler must agree to remove all unwanted pallers; including

CHEF's blue.

27. An end user benefits from the removal of all excess wood pallets by the class by a

reduction in his cost attributable to the pallets, convenience of having uncluttered dock or storage

space and, often, compliance with local health or other ordinances. In some instances the

recycler pays the end user for his acquisition of all wood pallets; including CHEP's blue pallets.

D. CHEP Origins in Australia

28. The defendant CI-lEP's involvement in the wood pallet business can be traced back to

World War IL From 1941 - 1945, the Australian government developed the "Allied Materials

Handling Standing Committee" to provide efficient handling of war materiel. When the war

ended, the American military bases in Australia were closed leaving an abundance of materials-

handling equipment, including wood pallets. With this asset base and an established military

transportation/warehousing infrastructure, the Australian government continued to operate the

industry. This governmental organization was known as the: "Commonwealth Handling

Equipment Pool," known by its acronym "CI-IEP."

29. In 1949 the Australian government privatized CHEF and mandated its sale. In 1958, an

Australian business entity, Brambles, acquired CIJEP. C.HEP experienced rapid growth after its

acquisition, and within a few years operated the largest pool of pall.ets in the southern

hemisphere

30. Upon information and belief CHEP presently employs mcre than 7,700 people and

operates in 44 countries to issue, collect, condition and reissue approximately 300 million pallets

from a global network of service centers. CHEF claims to serve approximately 300,000

customers and engaged in many nullions of blue pallet movements each day.

CJ..ASS ACTION COMPLAINT — PAGE 10

proposition. Thus, Lhe p llet recyclet r u$t irgree to rerft)ve all unwanted pallcts; inclr.rding

CHEP's blue.

21. An end user benefits from the removal o[ all excess w(]od pallet$ by the class by a

reduction in his cost attributablc to the pallcts, convcnicnce of having urcluttcrcd dock or storage

spacc and. oftcn, compliancc with local health or other ordinances. In some instances the

recycler pays the end user for his acquisition of all wood pallets; including CHEP's blue pallcts.

D, CHEP Origins in Australia

28. The defendant CHEP's involvement in the wood nallet business can be tracecl hack ttl

World War II. Frorn l94l - 1945, the Australian govemrnent dcvclopcd thc "Allicd Materials

Handling Stalding flommittee" to provide efficient handling of war matiriel. When the war

crrdcd, thc Amcrican military bascs in Ar.rstralia wcrc closcd lcaving an abundance of materials-

handling equipment, including wood pallets. With this asset base antl an established ntilitary

transportatiorvwarchousing infrastructurc, the Australian govcrnment continued to operate the

industry. This govemrnental organization was known as t}e: "Comnronwealth Handling

Equipment Pool," known by its acronyrn "CtlEP."

29. ln 1949 thc Australian govcmmcnt privatizcd CHEP and mandated its sale. In 1958, an

Australian husiness entity, Brambles, acquired CIIEP. CHEP experienced rapid growth alier its

acquisition, and within a few years operatetl the largest pool ol' pallets ir'l lhe southern

henrisnhere.

30. Upon inlbrmation and belief CHEP presently employs rnore than 7,700 people and

operates in 44 countrics to issuc. collcct. condition and rcissnc approxirnatcly 3tJO million pallets

t'rorn a glohal network of service centers. CHEP claims to serve approximatcly 300,000

customers and engaged in many millions of blue pallet movements each day.

Cl.Ass AcrroN CQMPI-^INT - P,,\cE l0

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 10 of 30

E. CHEP in the United States: "Closed Loop Rental Model"

31. The CHEP defendant entered the U.S. wood pallet market in the early 1990s and quickly

became the largest wood pallet supplier in the U.S. On. a recurring, daily basis CHEF has as

many as 90-100 million pallets circulating in the U.S. market. Being blue, CHEP pallets are

easily identifiable and distinguishable from other wood pallets.

32. In addition to CHEF's anticompctitive conduct vis-a-vis the class described below, the

same unlawful conduct creates a paflet marketplace dysfunction for customers seeking prices

from members oF the class and CHEP. That dysfunction Lakes the forni of pallet customers

paying higher prices for pallets than would occur in a truly competitive market free of CHEF's

manipulations. After CHEP's introduction of the closed loop rental model class members' offers

to sell pallets were, of necessity higher than they would be in a free, competitive market due to

(heir bearing the added CHEF pallet costs. Customers are thus confronted with those artificially

higher oilers to sell from recyclers that permit CHEP to offer an ostensibly lower but actually

higher than competitive prices. This is true whether the CHEF offer is presented in the form of a

rental or sale. The prices to pallet Customers are artificially inflated and what would otherwise

he a free market is skewed by CHEP's anticompetitive conduct to the injury of the wood pallet

market and customers requiring pallets for commercial purposes in interstate commerce.

33. By CI-IEP's forceable imposition of its business costs on the class, it successñilly

forecloses a portion of the wood pallet market to class members by forcing them to make higher

than competitive offers to potential customers for wood pallets. CHEP's foreclosure does not

flow from any business acumen, efficiency or lawFul hiLsiness practices in the market for wood

pallets.

CLASS ACTION COMPLAINT —PAGE II

E. CHEP in the United States: "Closed Loop Rental Model"

31. The CHEP tlel'enilant entered the II.S. wrttrd pallet market in the early I990s and qr.rickly

became the largest wood pallet supplier in the U.S. On a recurring, daily hasis CHEP has as

marly as 90- I00 rnillion pallets circulating in the U.S. market. Being blue, CFIEP pallcts arc

easily identiliable and distingrrishahle fionr other wood pallets.

32. tn addition to CHEP's anticompctitivc conduct vis-a-vis the class described below, the

same unlawlul corlduct creates a pallet marketplace dysfiurctio

for customers seeking prices

flrom members o[ the class and CFIEP. Thrt dyslLrncriorl tlkes the f'onn of pallct customers

paying higher prices for pallets thtur would occur in a truly competitive market free of CHEP's

manipulations. Afier CHEP's irrtroduction of the closed loop rental modcl class rnernbers' offers

to sell pallets were, of necessity higher tharr they would be in a free, competitive market due to

thcir bcaring the added CHEP pallet costs. Customers are thus confrontetl with those artilicially

higher ol'l'ers to sell frrrn recyclers that permit CHEP to ot'fbr an ostcnsibly lowcr but actually

higher than cr)mpetitivc priccs. This is truc whcther thc CHEP offcr is prcscnted in the form of a

rental or sale. The prices to pallet cust()mers dre artificidlly inllated ard what wonld othcrwisc

be a free market is skewetl hy CFIEP's anticompetitive conduct t() the injury of the wood pallct

markct and custourers requiring pallets for commercial purposes in interstate commerce.

33. By CHEP's forceable imposition of its business costs ou the class, it :iucce$strrlly

li)recloses d portion of the wood pallet markct to class mcnrbcrs by tbrcing thern to rnake higher

thln cofirpetitive otlbrs to potential clrstorners t'or wood pallets. CHEP's fbrcclosure does not

flow Irum any business dcufien, et'l'iciency or lawlul husiness practices irr thc rnarkct for wood

nal lets.

CL,ASS ACTTON COMPI,AINT _ PA(}E I I

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 11 of 30

34. When CHEP entered the U.S. wood pallet market it utilized the less common "lease

model" business plan, as described above. Under the lease model CHEF owns and maintains

pallets so that they could be pooled and rented to customers. Once a wood pallet reached its

Final destination, it was to be returned to the CHEF pallet pooi by agreement so as to create an

ongoing cycle oF rental, repair, and return. The CHEP lease model is known in the industry as a

"closed loop rental model."

35. CHEP's lease agreements included a fec structure charging different amounts based on

how its pallets were used, and additional fees if a pallet was not returned. The key provision of a

CHEF lease arrangement was that a participant in the pallet movement system was responsible

br retrieval and return of the leased pallets to the CHEP pallet pooL

F. CHEFs Modified Model itt the United States: "AVP" for Business Expansion

36. To enhance and expedite its penetration into the U.S. market CHEF modified its "closed

loop rental model" in 1997. The new CI-1EP business model was called the "Accelerated

Volume Program," or AVF. Unlike the "closed loop rental model," the AVF did not require

CHEP customers to return pallets to the CHEP pallet pool.

37. CHEF modified its business model to create incentives for manufacturers and initial users

to become CHEF customers. CHEP also added fees to protect itself in the event its wood pallets

were lost or not returned to the CHEP pallet pool.

38. The AVF proved highly successful in expanding CHEP's customer base and the total

number of wood pallet.s it placed in circulation. The AVF program enabled CHEP to flood the

market with blue wood pallets. As a result of the AVF CHEP added thousands of new

customers.

CLASS AC'I'ION COMPLAINT — PAGE 12

34. Wren CF{EP entered the [I.S. wtxxl pilllel market it utilized the less cor rnotr "lcasc

modcl" trusincss plan, as dcscribcd abovc. Undcr thc lcasc rnodcl CHEP owns and rnaintains

pallets so that they could be pooled and rented to customers. Once a wood pallet reachetl its

Unal dcstirntion, it was to bc rctumcd to thc CHEP pallct pool by agrccmcnt so as to cleate l

ongrring cycle ol'rerltal, repair, and retum. The CHEP lease rn$del i$ kntrwn iR the irrdustry as a

"closetl loop rental model."

35. LIHEP's lcasc agrccmcnts includcd a fcc structurc charging diffcrcnt amounts based on

how its pallets were used, and additional fees if a pallet was not retumed. The key provision ttl-a

LIHEP leasc arrangement was that a participant in thc pallct movement system was responsible

Iirr retrieval and retum ol the leased pallets to the CHEP p.rllet pool.

F. CIIEP's Modified Model in the United States: '*AVft'for Business Expansion

36. To c hancc and cxpcditc its pcnctration into the U.S. rrnrkct CHEP moditicd its "closcd

loop rental model" in 1997. The new CFIEP business model was called the "Accelerated

Volumc Program," or AVP. Unlikc thc "closcd loop rcntal rnodcl," thc AVP did not require

CIIEP customer$ to return pallets to the CIIEP pallet pool.

37 . C-'HEP moditicd its busincss modcl to crcatc inccntivcs for manufacturcrs ald initial users

to bccomc CHEP custorners. CHEP also addcd t'ccs to protcct itsclf in thc cvcnt its wood pallets

were losl or not retumed to the CHEP pallet pool.

38. The AVP proved highly successful in cxpanding CHEP's customcr base and the total

number of wood pallets it placed in circulation. 'the

AVP program enabled CIIEP to flood the

market with blue wood pallets. As a result of the AVP CHEP added thousands of new

cu$t(lmer$-

CLAss AC'IION COWLAINT _ PACE I2

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 12 of 30

G. Outside Consultants'Anticipated Problems With CHEFs AVP Plan

39. CHEF anticipated problems with the return of its blue wood pallets if it changed from the

closed loop rental model to the AVP model. Before deciding to adopt the Accelerated Volume

Program, CHEP studied the risks of decreased pallet return. The studics found a significant risk

of pallet "leakage." This euphemism meant that CHEP expected the lLncompcnsated loss of its

pallets if it proceeded with its planned change from the "closed loop rental model" to the "AVP"

model. By early 2002, financial analysts concluded that approximately 20% ol' CHEP's wood

pallet pool was at risk of loss. The study, conducted by Credit Suisse — first Boston also noted

that CHEF could reasonably anticipate cnhaneed levels of litigation spawned by the AVP

program occasioned by the increased loss of blue pallets into the customary recycle method

practiced in the U.S.A.

40. Ultimately CHEF launched the AVP model even though it could not distinguish one blue

wood pallet from another or track and retrieve CHEP pallets once their downstream journey was

complete. In recent years CHEP's own press releases and other public communications have

acknowledged that millions of CHEP's blue wood pallets had been lost. The AVF was a

distribution device through which CHEP pursued a business strategy of growth in the U.S.

market without regard for associated operational risks, especially the loss of pallets (leakage)

within the downstream movement of pallets by entities with whom CHEF shared no business

relationship.

H. CLIEP's Anticompetitive Conduct

41. To deal with the significant lost pallet-leakage issue CHEF devised and implemented a

plan to force the nation's pallet recyclers to act as its pallet retrieval network. CHEP knew, and

it was obvious that by the nature of the recyelers' business, it was inevitable that class members

CLASS ACTION COMPLAINT —PAOF 13

G, Outsidr Consultants'Anticipated Problems With CIIEP's AVP Plrn

39. CHEP anticipated problems with the retum of its blue wood pallets if it chnnged tiom the

closed loop rental model to the AVP mtrdel. Betore deciding to adopt thc Accelerated Volume

Program, CHEP srudied the risks of decreased pallet rctum. Thc studies found a significant risk

of pallet "leirkage." This euphemism nreant that CHEP expected the urtcontpcnsatcd loss of its

pallets if it proceeded with it$ plaflned change liom the "closed loop tcntal modcl" to the "AVP"

rnodcl. By early 2002, financial analysts concluded that approxirnately ZQ?o ol'CHEP's wood

pallet pool was at risk of loss. The $tudy, conducted by Credit Suisse - First Bostotr also notcd

that CHEP could rcasonably anticipatc cnhanced levels of litigation spawned by the AVP

prograrn occasioncd by thc incrcascd loss of bluc pallets into the customary recycle method

practiced in the U.S.A.

40. Ultirnatcly CHEP launched the AVP model even though it could not distinguish trne hlue

wood pallet fi'om another or track an<l retrieve CHEP pitllet$ once theii downstrearn joumcy was

complete. In recent years CI'lEP's own press releases and other public communicatiorrs havc

acknowletlged that flillion$ of CHEP's hlue wood pallets had heetr lost. Thc AVP was a

distribr.rtion device through which CI{.bP pursued a business stxategy of growth ifl the I,I.S.

market without regard f'or associated operatiorlal risks, especially thc loss of pallets (leakage)

within the down$treafir rrovefilent ol' nallets bv entities with whom CHEP shalcd no business

relationship.

H, CIIEP's Anticoflpetitive Conduct

41. To dcal with thc significant lost pallet-lcakagc issnc CHEP devised and implernented a

plan to folce the nation's pallet recyclers to act a$ its pallet retrieval network. CHEP knew, and

it was obvious that by the nature of the rccyclers' business, it was inevitable that class members

CLAss AcToN COMPI.AINT - PACE l3

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 13 of 30

would retrieve and come into possession of CHEP's blue wood pallets when they removed all

pallets from an end user's site.

42. Rather than implementing its own pallet-collection system or compensating the class for

retrieving its blue wood pallets, CI-IEP began a concerted, enthusiastic and national campaign of

threatening, coercing, suing, and bringing criminal theft and conversion actions against class

nienihers across the United States. The threats, civil and criminal actions have been widely

communicated through notices, letters and the actual initiation of civil and criminal actions the

information about which was disseminated to the class and intended to he imposed on other class

members unless they returned the pallets to CHEP at class members' own expense. This action

will disclose several civil and, at least, one actual criminal action used by CHEP as alleged.

These threats and legal action have been and remain the uniform method and dissemination

vehicLe by which CHEP exercises its unlawful conduct and causes market dysfunctionality.

43. In each actual or threatened action CHEP asserts perpetual ownership of all, wood pallets

painted blue and bearing the CHEP logo. CHEP claims that by possessing blue pallets the pallet

recyclers have stolen or converted its property. CHEP consistently has demanded the pallets be

returned at the recyclers' expense and, in so doing, flexed its overwhelming economic muscle to

coerce compliance with those demands by class members. The commercial scene is one of the

mammoth international pallet company exerting its economic strength to coerce the small

recycler to do its bidding and incur transactional, operating and overhead costs arising from the

recovery of CHEP blue pallets. CHEP is not like the rare great opera soprano or sports star who

realizes monopoly returns because of star-like production. Rather, Cl-JEWs conduct illustrates

the attempt to circumvent the law governing business behavior to realize monopoly returns

CLASS ACTION COMPLAINT — PAGE 14

would rctricvc and cornc into posscssion of CLIEP's bluc wood pallets when they removed all

pallets tiorn an clrd uscr's sitc.

4?.. Rirther thdn itnpletnenting its own pallelcrrllcction systcm or cornpcnsating the class for

retdeving its bluc wood pallcts, CHEP bega.n a concefied, enthusiastic and national c mpaign ol'

thrcatcning, coercing, suing, and bringing criminal theft and conversion action$ again$t class

nrenrbets across thc Unitcd Statcs. Thc thrcats, civil and crirninal actions have been widely

cornrnunicated tlrrouglr noticcs, lcttcrs and thc actual iuitiation of civil and crirninal actious the

inlormation about which was disserninated to the class and intended to bc irnposcd on other class

rnetnbers utrlcss thcy rctumcd thc pallets to CHEP at class mcmbcrs' owtr expel$e. This action

will tlisclose several civil and, at leu$t, one actual criminal action used hy CHEP as alleged.

These threats and legal action have been and remain the uniform method antl disserrtirtatiotr

vchictc by which CHEP cxcrcises its unlawful conduct and causes market dysfunctionality.

43. In each actual or threatened action CHEP assefts perpetr.ral ownership of all wood pallets

pirirrted hlue arrd bcaring thc CHEP logo. CHEP claims that by posscssing blue pallets the pallet

recyclers have stolen or crlnverted its propeny. CHEP consistemtly lrtrs dcrnandcd thc pallets be

returned at the recyclers' expense and, in so tloing, flexetl its overwhelming ecoTrornic rrtusclc to

coerce compliance with those demands by class members. The commercial scene is otte of thc

rnarnrnoth intcfirational pallct company cxcrtiflg its economic strength to coerce the srnall

rccyclcr to do its bidding and incur transactional, operating ald overhead costs arising from the

recovcry ofCHEP bluc pallcts. CHEP is not likc thc rarc grcat opcra soprano or spofis star who

rcalizcs monopoly returns becausc of star-like production. Rather, CHEP's conduct illustrates

the tteurpt to circumvent the law goveming business behavior to realize monopoly tetums

CI-nSs NcTIoN CoMPLA,INT _ PAGE 14

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 14 of 30

through coercion of the type recognized by the antitrust laws that seeks to limit participants; both

current and potential.

44. CHEF has made and continues to make these demands — even though it has already

collected various fees, (including lost pallet fees), associated with the use or loss of its pallets

that CE-IEP independently has made no effort. to retrieve yet, does not disseminate the same

threats or demands of non-compensate blue pallet return to end-users or its own customers. It is

çjy when blue pallets are in the possession of class members that CHEP issues such threats and

exercises its eccnomic muscle. CI-TEP's conduct serves rio legitimate business purpose. if

CHEF were genuinely concerned about the return of its blue pallets, it would act similarly with

regard to its own customers or the pallet end-user. It does not.

45. In recent years CHEF has begun nominally to compensate a small number of class

members for their return of blue pallets to CHEF. The compensation is at a greatly reduced rate

set unilaterally by CI-TEP, and does not cover the operating costs class members incur in

returning the blue pallets to CHER CHEP does not publicize this minimal compensation for the

return of its pallets that it grants and withdraws at its sole discretion.

46. CELEP's anticompetitive conduct has placed the class of pallet recyclers between the

proverbial competitive rock and hard place: on one hand class members are faced with losing

their end-user clients if they refuse to remove all pallets from the end users' property.

Conversely, CHEP claims it owns all, blue wood pallets collected [torn end users' property and

has threatened, and actually instituted, legal action if the pallets are not returned by recyclers to

CI-IEP; with those same recyclers bearing the costs.

47 It is through this anticompetitive conduct that CHEP has been able to decrease its

operating business costs by shifting them to the class members. Axiomatically, the class

C&ss ACTION COMPLAINT — FAGE 15

through cocrcion of the typc rccognizcd by thc antitmst laws that seeks to limit parlicipantsl both

current antl potential.

44. CHEP has made and continues to make these demands - evell though it has already

collected valious fees, (including lost pallet fees), associated with the use or loss of its pallets

that CI{EP intlepentlently has made no e[forl to retrieve yet, doe$ nol disseminate the same

thrents or demarrds of non-compensate hlue pallet retum to end-users or its own customcrs. It is

onlv when hlue pallets are in the possession of class members that CHEP issues such thredt$ ilfld

erercises its econrtmic muscle. CHEP's conduct $erve$ no legitimate brrsiness purpose. Il'

CHEP wcrc gcnuinely conccmed about thc rcturn of its bluc pallcts, it wor.rld act sirnilarly with

regald to its own customerri or the pallet end-user. It tloes not.

45. In recent years CIHEP has bcgun nominally to compcnsate a small nurnbet of class

rncmbcrs fbr thcir rctum of bluc pallets to CHEP. Thc cornpcnsation is at a grcatly rcduccd ratc

set unilaterally by CFIEP, and does not cover the operating costs class members ucur in

retuming the hlue pallets to CIIEP. CHEP dtres not publicize this flifliffial cofiperlsirtio fi)r the

retum of its pallets that it grants and withdraws at its sole discretion.

46. CIIEP's iurticompetitive conduct has placed the class of pallet recyclers between the

proverbial competitive rock and hartl place: on one hantl cla$$ rnembers are laced with losing

thcir cnd-uscr clients if thcy rcftrsc to rcnlovc all pallcts frorn thc cnd uscrs' propcfiy.

Conversely, CHEP claims it owns all blue wood pallets collectetl liom entl urers' property and

has threatened, and actually instituted, legal action if the pallets are not retumed by recyclers to

CHEP; with those same recyclers bearing the costs.

47. It is through thi$ anl.icorhpetitive conducl. that CHEP has heen ahle to decrea$e it$

operatirE business costs by shifting them to the class members. Axiomatically, the class

Cr-A,ss ALrrrON C0MPLATNT - PAGE I5

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 15 of 30

members' business Costs have increased; costs which, when added to their appropriate business

costs, cause class members to be non-competitive vis-ã-vis CHEP with regard to potential pallet

customers, solicited by both CI-LEP and class members. It is through this scheme, artifice and

device that CHEP coercively and unlawfully places upon the class the financial burden of

retrieval, sorting, transportation, labor, storage and all other blue pallet-related costs that should

properly be borne by CHEP. CHEP adopted the open loop/A VP business model expecting that

end-users would not return it is blue pallets The true purpose of CHEWs policy is to unlawfully

transfer its operating costs to the class as alleged in this complaint; a purpose and effect that if

not stopped by judgment presents the dangerous probability of a CI-LEP monopolization of the

relevant market.

48. CHEP's unlawful shifting of blue pallet-related expenses to the class through coercion

and threat has harmed the class's ability to compete for placement of wood pallets in the (iS.

marketplace. CHEP thereby causes a correlative injury to the otherwise competitive wood pallet

market in which there is cross-elasticity and distinct interchangeability of the relevant markets'

only product.; the wood pallet. To the pallet customer the wood pallet, whether supplied by a

class member or CIIEP, is substitutable —. one for the other because the universal stan.dai-d 48 X

40 wood pallet performs the sante function. Except for the blue painted edge and the embossed

acronym. the two pallets not only are interchangeable, they are indistinguishable.

49. CHEP's business conduct resulting in the claim and injury to business or property alleged

in this complaint is not the consequence of CHEP's lawful growth, superior product., business

acumen or historic accident.

50 A further market dysfunction is imposed by CHEP's conduct. A harrier to entry is

constructed by CHEP since it would be apparent to any reasonably prudent pallet recycler that

Ctss Ac'rION COrvIpLAIN'l' — PAGE 16

memherri' hrLsiness cr)sts have incre+ed; costs which, when added to their appropriatc bustncss

costs, causc class mcmbcrs to bc non-cornpctitivc vis-h-vis CHEP with rcgard to potential pallet

customers, solicited by both CHEP and class members. It is through this scheme, artillce and

devicc that CHEP coercively and unlawfully places upon the class the financial burlen ol-

retrievrl, sortitrg, tr nsportrtir)n, lnbor, storage afld all other hlue pallct-rclatcd costs that should

properly be borne by CI{EP. CIIEP adopted the open loop/AVP business model expecting thtlt

end-users would not retum it is hlue pallets. The trrre prrrpose trl'CHEP's policy is to unlawfully

transfer its operating coljt$ to the class as alleged in this complaint; a purpose dnd efl'ect that if

not stopped by.iudgment presents the dangerous probability of a CHEP monopolization of the

relevdnt nlarkct.

48. CHEP's unlawful shifting of blue pallet-related expenses to the class through coercion

and thrcat has halmcd thc class's ability to cornpctc for placcmcnt of wood pallets in the U.S.

marketplace. CHEP thereby cau$e$ a correlative injury to the otherwise competitive wood pallet

markct in which thcrc is cross-clasticity and distinct intcrchangcability of the relevant markets'

only proilucl, the wood pallet. To the pallet curitomer the wood pallel., whether supplied hy a

class nernber or CtlEP, is substitutable - one for the other because the universal stan<lald 48 X

40 wood pallct pcdonns thc sanlc function. Except tbr thc trluc paintcd cdgc and thc cmbossed

acronym, I.he two pallets not only are interchangeable, they are intlistinguishable.

49. CHEP's busincss conduct rcsulting in thc clairn and injury to busincss or propcrty alleged

in this complaint is not the consequence of CIIEP's lawful growth, superior producl., busirress

flculnen or historic accident.

-50. A lurther market dyslrrrrctitln is imposed hy CHEP's corrduct. A barrier to entry is

constnrcted by CHEP since it would be apparent to any reasonably pnrdent pallet recycler that

Cuc,ss Aclror.{ CoMpLArN r'* PAcL l6

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 16 of 30

CHEP actually exercises its hegemony of the wood pallet market through the business cost

shifting scheme described in this complaint. CHEF's conduct has the distinct probability of

eliminating wood pallet recyclers from the market for wood pallets for so long as it can engage

in the shifting of its business costs to the recyclers and thus, entry into such a market is resolved

to ultimate failure irrespective of business acumen, efficiencies and sound business practices of

any current or potential entrant recycler. Any reasonable potential market entrant will observe

the market realities and be deterred from entering an unlawfully dysfunctional market that has a

barrier to additional competition among recyclers.

51. CHEWs unlawful business conduct as alleged in this complaint is intentionally oriented

to facilitate its acquisition of a monopoly by impairing rivals', specifically the class,

opportunities. The coercive nature of CFIEP forcing the class to bear business costs properly

attributable to CHEF does not further competition 011 the merits. Throughout the class period.

CT-TI.P repeatedly announced and widely disseminated to the entire class of recyclers that it, and

it alone, owned every blue wood pallet on which its name appears. CHEF equally disseminated

among the entire class of recyclers its intent to institute and pursue actions for civil theft,

conversion, and other legal actions, as well as cause criminal actions to be instituted by

competent authorities, against any recycler who fails to deliver to CHEP any bLue wood pallet

that may come into the recycler's (singular and plural) possession. CHEP has followed through

with its announcement and has instituted such civil actions and cause criminal actions to be

brought.

52. CHEWs universally disseminated demand has, in the past, refused and continues to refuse

o recognize or compensate recyclers for the customary and ordinary business costs incurred by

the class members into whose possession CHEF blue wood pallets have, or may, conie

CLASS ACTION CoMPLAINT — PAGE 17

CHEP acturrlly sxeruises its hegenrony of the wood pallet market thlough the busirress cosl.

shifting scheme desclibed in this complaint. CHEP's conduct has the distinct ptobability of

eliminrting wood pallet recyclers liom the nrarket for wood pallets tor so long as it can engage

in thc shifting of its husiness costs to the recyclers and lhr.rs, efltry inlo such a market is resolved

to ultiruilte failure irrespective of business acufileu, efficiencies and sound business plactices of

any current or potential entrant recycler. Any reasonable potential mflxket entxflnt will observe

thc market realities and bc dctcrrcd fiom cntcring an unlawfully dystiurctional rnarkct that has a

banier lo adtlitional competition among recyclers.

5I. CHEP's unlawful busincss conduct as nlleged irr this cornplaint is intentionally orientcd

to facilitatc its acquisition rrI a monopoly by impairing rivals', specifically the class,

opportunities. The coercive nature of CIIEP forcing the class to bear business costs properly

attributable to CHEP docs not furlhcr cornpctition on thc tnerits. Throughout the class period,

CHEP repeatedly announcetl and widely disseminated to the entire class of recyclers that it, and

it alone, owned every blue wood pallct on which its narnc appcars. CHEP equally disscminatcd

trrnong the entire clati$ trl' recyclers it$ intent to iDstitute and pursue actions for civil theft,

conversion, and other legal actions, as well as cause crirninal actions to bc institutcd by

cornpetent authorities, against any recycler who f,ails to deliver to CHEP any blue wootl pallet

that m y come into the recycler's (singular and plural) possession. CHEP has followed through

with its announcernent and has instituted such civil actions and causc criminal actions to bc

brought.

52. LIHEP's univcrsally disscrninated demand has, in the past, relused and continue$ to relu$e

kr recognize or compen$ate recyclers fol the customaxy and ordilary busincss costs incurred by

the class rnernbers into whosc posscssion CHEP blue wood pallets have, trr may, coTne.

CI.ASS ACTI0N COMPI.,AINT _ PACE I 7

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 17 of 30

53. CHEP thus, through uniformly applied coercively predatory conduct, has benefited

unlawfully as follows:

a. CHEP has been Forcibly subsidized and has been relieved oF a signilicant

component of business costs that it would otherwise incur absent its predatory

conduct. it has coerced the class to bear thc business costs ordinarily and

reasonably anticipated to be associated with the possession of blue pallets. By

way of non-exhaustive example, those costs include: transportation, sorting,

occupation of operating space, insurance, risk of loss, opportunity, labor,

machinery, accounting, and other costs reasonably attributable to the possession

oICHEP's blue pallets.

h. By its ability to coerce the class to bear costs of business properly borne by CI-IEP

it has benefited by the effect of having lower business costs, and, correlatively,

forcing the class to bear higher business costs to the recyclers' detriment. The

detriment being — that when the market demand for wood pallets, in the form of a

request for bids or other potential customer price inquiry, places CHEP and any

class member in what would otherwise be a competitive posture for the placement

of wood pallets, CHEP. solely by reason of its coercive ability and predatory

conduct, benefits from its unlawfully created prices advantage as against the class

member.

c. CHEP's unlawful conduct permits it to cause what, ii' unfettered, would he an

otherwise competitive price, to he artificially inflated with a non-competitive,

artificially higher price to the consumer of wood pallets. in the absence of

CHEP's exercise of its ability to cause the market for wood pallets to he higher

CLASS ACTION COMPLAINT — PAGE 1 S

53. CHEP thus, through unitbrmly applicd cocrcivcly ptcdatory conduct, has benefited

unlawtullv as tbllows:

h .

CHEP has heen lirrcibly subsidized aTld h $ been relieved ol' a significant

cornponcnt of busincss costs that it would otherwisc incut ahscnt its prcdatory

conduct. lt has cocrccd thc class to bcar thc business costs ordinarily and

reasonably anticipatcd to bc associatcd with thc posscssion of bluc pallcts. By

way of non-cxhaustivc cxarnplc, thosc costs includc: transportation, sorling,

occupation ol' operating space, insuraflce, rir:ik of loss, oppoflunity, Iabor,

machinery, accou tiTrg, xTrd other costs reasr)nahly attrihutahle to the possession

of CHEP's blue pallets.

By its ability to coerce the class to bear costs of business properly borne by CFIEP

it has benefited by thc effect of having lowcr busincss costs, and, correlatively,

forcing the class to bear higher business costs to the recyclers' detrirnent. The

dctrirncnt bcing - that when thc rnarket dcrnarrd tirr wotrd pallets, irr the fbrtn of a

requerit f'or bids or trther potenli l cu$tofter price inquiry, plac:es CHEP and any

class member in what would otherwise be a competitive posture for the placetnent

ol' wooil pallets, CHEP, solely by reason of its coercive ability and predatoty

conduct, bencfits from its unlawfully crcatcd priccs advantagc as against thc class

member.

CHEP'S unlawtul co duct permits it to cau$e what, il 'uflfeltered, would he an

otherwisc cornpctitivc pricc, to hc artificially inflated with a non-contpctitivc,

artificially higher price to the consumer of wood pallcts. ln the absence of

CHEP's exercise rrf its ahility to c;ruse the ftfiket lor wooil p:tllets to he higher

c .

CI-n ss AcTIoN CoMPI-,A,INT _ PAGE I8

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 18 of 30

than what lawful competition would permit, the consumer in the market would

benefit and thus the public policy of the antitrust laws would prevail by reason ol

a cost-based competitive environment on the relative merits of the class and

CHEP. Left undeterred and unrestrained, CHEP inevitable will meet the classic

definition of a monopolist; the ability to control price and output both of which

because of its inevitable exclusion of the recycler class as a viable competitive

force regarding price and therefore as an alternative source of end-user supply due

to the substitutability and cross-elasticity alleged above in paragraph 48. A CHEP

wood pallet performs no different functions for the customers than one offered by

a recycler.

54. CHEP's conduct mis-shapes the consumer market for pallets [or the producer recycler

class because they are weighted down by the transfer of CTJEP costs as a11eged The customers

and the market for pallets do not benefit from an efficient market to create a consumer surplus

hut, contrariwise. CIIEP realizes producer non-competitive surplus with the result that the class

of otherwise efficient recyclers will inexorably cease to exist as market participants. The failure

of the market and the exclusion of the recycler class as wcll as the barrier to entry to the recycled

pallet market assures two distinct results; both of which are anathema to the antitrust laws:

a. CHEP's continuation of receiving monopoly returns, and-

h. The market's continued failure to permit lower, competitive prices in consumers'

acquisition of pal lets needed for their commercial enterprises.

VI. CLASS ACTION ALLEGATIONS

55. The named plaintiffs are members of the following alleged class of similarly situated

pallet recyclers, whom they seek to represent in this class action:

CLASS ACTION COMPLAINT— PAGE 19

tharr what [awful cornpetition wor.rld permit, the conriurrrer in the ntarkct wot tld

benefit and thus the public policy of the antitrust laws would prevail hy reason ttf

a cost-bascd compctitivc cnvironmcnt on thc rclativc merits of the class and

CHEP. tf,lt utdeteffed and untestraincd. CHEP inevitable will tncct thc classic

definition of a monopolisq the ability to corrtrol price and output both of which

because of its inevitable exclusion of the recycler class as a viable competitive

force regarding price and therefore as an altemative source of end-user supply due

to the substitutability and cross-elasticity alleged ahove in paragraph 48. A CHEP

woorl pallet pertorms no di erent lirnctions lbr the cu$tomers thiln ofle ott'ered hy

a rccyclcr.

54. CFIEP's conduct rnis-shapes the consumcr rnarkct f'or pallets t'or thc ptoducct rccyclcr

class because they ilre weighted down by the transf'er ol'CHHP costs as alleged. The custofiters

and the rnarket for pallets do not benefit from an efficient rnarket to create a consulner surplus

but, contrariwise, CIIEP realizes producer non-competitive surplus with the result that the class

of otherwise efficient recyclers will inexorably cease to exist as rnarket parlicipants. 'I'he failure

of thc rnarkct and thc cxclusion of thc rccyclcr class as wcll as thc barricr to ctrtry to thc recycled

pallet martet a,ssures two distinct results; both of which are anathema to the antitrust laws:

CHEP's continuation ol' receiving morropoly returns, and-

The market's ctrntinued Iailure to permit l{rwer, cornpetitive prices in ct)nsurtters'

acquisition of pallets neetled for their comurercial enterprises.

VI, CLASS ACTION AI,I,F]GATIONS

-55. The named plaintiffs zue rnembcrs of the following allcgcd class of sirnilarly situatetl

pallet recyclers, whom they seek to represent in this class action:

a.

h .

CI-ASS AcTIoN COMPL,{INT _ PAGE I9

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 19 of 30

All entities or individuals in the lower 48 states of the United States that:(1) arc or have been engaged in the business of the recycling andmarketing oIl wood pallet.s; and. (2) have acquired CHEP pallets in theordinary course of their business. Th.e relevant time period lhr theanticompetitive conduct complained of is four years next preceding thedate of the filing of this complaint through the date upon which theclass as defined is certified pursuant to Rule 23 FED. R. Civ. P. This classexcludes, the named defendant, counsel for CHEP, the court and any courtpersonnel, counsel in this case, any CHEP current or former employees,and any CT-IEP subsidiaries, affiliates, or other CHEP-related entities orindividuals. The named plaintiffs seek certification of the above-definedclass under FED. R. Civ. R 23(h)(3).

56. The pallet recycler class satisfies the numerosity. commonality, typicality, and adequacy

of representation requirements of FED. R. CiV R 23(a) and the action is both nianageable and

superior as required by Rule 23 and class certification is sought under Rule 23(b)(3), Fun. R.

Civ. P.

VII. Rule 23 Criteria

57 The members of the pallet recycler class are so numerous that joinder of all class

members is impracticable. In 2005 the defendant has asserted in previous litigation that it has

business relations with 1,900 wood pallet recyclers, The Wood Pallet Trade Association [The

National Wood Pallet and Container Association (NWPCA)I publishes a. newsletter and

distributes 6,000 copies of which the NWPCA indicates most are recyclers while a small number

of newsletters go to others. Pallet Enterprise Magazine indicates that is has a circulation of

approximately 12,000. Upon the above information and belief the class of wood pallet recyclers'

material to this action numbers approximately 4.000 The named plaintiffs/class representatives

estimate that there are and will be approximately three thousand similarly situated entities and

individuals that will be members of the above-defined class. Based on ongoing communications

between CI-IEP and the pallet recyclers, the most comprehensive list of identities and addresses

CLASS ACTION COMPLAINT —PAnE 20

All entities or individuals in the lower 48 states of the United States that:(l) arc or havc bccn cngagcd in thc busincss of the recycling andmarkeling of wood pallets; and. (2) hnve acquired CHEP pallets itt tltcordinary course of theil business. The relevanl. time pedod I'ot theanticompetitive conduct complained of is four yeurs next preceiliug thedatc of thc filing of this complaint tfuough the date upon which theclass as detiled is cenified pursuflnt to Rule 23 FtD. R. Ctv. P. This classcxcludes, thc named dct'cndant, counsel for CHEP, the coufi and any coufipersonnel, c:oufl$el i this case, any CHEP cufte t ot tbmrer ctnployccs,and any CHEP subsidiaries, affiliates, or other CHEP-relatecl entitie$ orindividuals. Thc namcd plaintiffs seek ccrtification of the above-definedclass under FED. R. Ctv. P. 23(hX3).

-56. The pallet recycler class satisfies the numerosity, commonality, typicality, and adequacy

of representation requirements of FEI). R. Ctv. P.23(rl) and the action is both rrtanageablc and

superirrr as requircd by Rule 23 and class ccrtification is sought undcr Rule 23(bX3), FLrD. R.

Crv. P.

VII, Rule 23 Criteris

51. The members rrl' the pallet recycler class are so nufilerous that joindcr of all class

mcrnhcrs is impracticablc. In 2005 thc defendant has asscfted in previous litigation that it has

business relations with I,900 wood pallet recyclets. The Wottd Pallet Ttade Association [T]rc

National Wood Pallet and Container Association (NWPCA)I publishes a newsletter and

distribr.rtcs 6,000 copies of which the NWPCA indicates most are recyclers while a small number

of newsletters go to others. Pallet Enterprise Magazine indicates that is has a circulatiotr of

approxirnately 12,000. Upon the above information and hclicf thc class of wood pallct recyclers'

material to this action numbers ppro{imately 4,000. The named plaintifli/class representativcs

estimate that there ale and will be approximately three thousand similarly situated entities ;md

individuals that will bc mcmbers of thc above-defined class. Based on ongoing conllunications

between CHEP and the pallet recyclers, the most cornprehensive list of identities and ad<lresses

CLASS ACTI0N COMPI,ATNT _ P^cE 20

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 20 of 30

of c].ass members may be determined from the books and records of the deléndant.. the wood

pallet trade association and slLhscrihers to trade publications.

58. CHEP has engaged and continues to engage in a common course of conduct directed

against the named plaintiffs and class, This common course of conduct is an attempt by CHEP

to achieve a monopoly, with a dangerous likelihood of success, and which has damaged the

business or property of the named plaintiffs and members of the class and thus represent legal

injury to the class's business or property that. of the type the antitrust laws were intended to

prcvent and flow from that wluch makes the conduct unlawfuL The uniform and common nature

of the claim alleged in this complaint, to state it in terms consistent with class action

jurisprudence, may he phrased thusly: Each named class representative is a member of the class

alleged and each has a claim for relief that if each presented his claim independently in unilateral

litigation, each would be required to plove the same substantive facts and elements of the claim

as every other class representative and every absent class member. Each of the common

questions of law or fact alleged below is material to the claim or each class member. Thus

conmionality exists between and among the class representatives and the absent class members.

59. Typicality is resolved in this action because the conduct of CHEP directed to the named

plaintilTs/class representatives is typical of its business conduct to each absent class member.

The conduct of CFIEP to each pallet recycler/class representative and absent class member does

not vary in any significant or material manner. Each is subject to the same specie of economic

cost bearing coercion of what properly are the costs that should be borne by CHEF. It is CHEP's

uniform conduct of threats and the initiation of civil action or criminal prosecution to all class

members that are intended to result, and do, in fact result, in probability of success in CHEP's

attempt t.o monopolize the national wood pallet market through the coercive shifting of business

CLASS ACTION COMPLAINT — PAGE 21

o[ c]ass memhers may be determinetl fiom the books antl reconls of the delendant, the wood

pilllet tr: e ir$s()ciirtion afld trubscriher$ to trade puhlicatitrns.

5ti. CHEP has cngagcd and continucs to cngagc in a common coursc of conduct ditected

against the narled plaintiffs and class. This common course of conduct iri an ilttempt by CHEP

to achieve ir monopr)ly, with a dangerous likelihood of success, anil which hirs rlanr:rged the

business or propefty of the named plaintiffs and mernbers of the class and thus tepresent legal

injury to the class's business or property thilt of the type the ntitrust laws wete inteflded to

prcvcnt and tlow frorn that which makcs thc conduct unlawfirl. Thc uniform ald common natute

of the claim allegcd i

this cofirplairrt, to state it i teftfls consistent with class action

jurisprudence, may be phrased thusly: Eirch named class repre$entative is a memher of'the class

alleged and each has a claim for relief that if each presentcd his clairn indepcndently in unilateral

litigalion, each woul<l be required to prove the $ame substantive fac:ts and elements ol'the claim

fls every other class representative and every absent class rnember. Each of the cotnmou

questiorls rrf law or fact alleged below is fiaterial t() the claim ol' each cla$s rnernbet. Thus

commonality exists between and among the class representatives and the absent class tnetnbers.

59. Tlpicality is rcsolvcd in this nction bccause the conduct of CHEP ditectcd to thc namcd

plaintill..;/class representatives is typical of its business conduct t() each absent class rnernher.

The conduct of CTIEP to each pallet recycler/class representative and absent class member does

not vary in any significant or material rlanfler. Each is suhject to the safte ttpecie of econornic

cost bearing coercion of what properly are the costs that should be borne by CHEP. lt is CHEP's

unitbnn conduct of thrcats and thc initiation of civil action or cdminal prosccutiorl to all class

membels that are intended to result, and do, in fact result, in probability of success iu CFIEP's

attempt t.o monopolize the national wood pallet market through the coercive shifting of bustness

CI,ASS ACTIoN CoMPLAINT _ PAGE 2 I

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 21 of 30

costs to class members with regard to blue pallets over which CHEP asserts perpetua.l ownership.

To the extent the defendant's typical conduct causes a shift in those ordinary business costs to

class members, CI-LEP incurs corresponding lower costs and thus causes the class to he non-

competitive in the wood pallet markeL

60. Each named plaintiff is an adequate class representative who will fairly represent the

interests of the class members. The named plaintiffs and proposed class representatives each has

an actual and similar stake in the instant action as a pallet recycler sithject to the same unlawful

business conduct of CHEP. Each shares the same substantive claim alleged in this action with

the absent class members; those recyclers nationwide as defined above. Each will fairly and

adequately represent, protect and prosecute the interests of the defined class of pallet recyclers.

Each has the capacity and willingness to prosecute this action fairly, adequately and effectively

on behalf of the plaintiff class, each is aware or his obligations, duties and fiduciary

undertakings. Each named class representative is articulate and capable of fairly representing

themselves and others who are being or have been subject to the unlawful conduct of CHEP.

61. Plaintiffs have engaged the professional services of competent counsel acquainted with

class action litigation and who appears before state and federal courts in class actions and other

complex litigation.

62. By vigorous prosecution of thcir individual claims, the named plaintiffs will also ensure

the same degree of prosecution energies with regard to the commonly held claims of absent class

members. Jn the protection of their own interests, the named class representatives also and

axiomatically will protect the similar interests of all members of the class, both absent and before

the court.

CLkss ACTION COMPLAINT — PAOF 22

c:osts to cla$s rneurhers with legald to blue pallets over which CHEP asserls perpetual ownership.

To the extent the def'eflddrlt's typicdl c()nduct L: u$erj a shilt in those ordinary hr.r$ine$s costs to

class mernhers, CHEP inc,urs conesponding lower costs and thus causes the cluss to be non-

cor petitive irr the wtrt)d pallet ntarket.

60. Each narned plaintiff is an adequate class representative who will fairly represent the

intcrcsts of thc class mcrnbcrs. Thc narncd plaintifl.r and proposed class reprcscntativcs cach has

an actual and similar stakc in thc instant action as a pallet recycler subject to tllc satnc unlawtirl

business conduct of CIIEP. Each shares the sarne substantive claim alleged in this action with

the abscnt class mernbers; those recyclers natiorrwide as dellned ahove. E;rch will fairly nnd

adequately represent, protect and prosecute the interests of the defined class of pallet recyclers.

Each has the capacity and willingness to prosecute this action fairly, adcquately and etTectively

rrn hehalf of the plairttiff class, each is aware ol' his obligationtt, dutie$ and liduciary

undertakings. Each named class representative is articulatc and capablc of fairly representing

lhefirselves and others who :rre being r)t hdve been subject to the unlawful conduct ol'CHEP.

61. Plaintiffs have engaged the professional services of competent coursel acquainted with

class action litigation and who appcars before state and t'ederal courts in class actiorts atrd other

complex litigation.

62. By vigorous prosecution of thcir individual claims, thc namcd plaintiffs will also cnsutt

the sarnc degree of prosec tion energies with regard to the commonly held clrtims ol'ahsent clirss

ureurbers. In the protection o[ their own interests, the named class represefltatives also and

axiomatically will protcct thc similar interests o[ all mefther$ ol'the cla$$, hoth rhsent and het'ote

thc coun.

CLc.SS ACTION COMPI.,AINT _ PAOF 22

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 22 of 30

63. In addition to meeting the elements of Rule 23(a), the named plaintiffs/class

representatives will establish that the elements of Rule 23h(3) are satisfied such that a class

should he certified. Common questions oF law or Fact predominate over ally questions affecting

only individual class members. A class action is superior to other available methods kr the fair

and eFficient adjudication of the present controversy.

64. The economic and antitrust injuries to the proposed representatives, class and their

business or property that flow directly from CHEP's conduct arise from common questions of

fact or law and that predominate over any applicable to any individual are as follows:

a. whether the wood pallet is a properly defined product sufficient to state a relevant

product market;

b. whether CHEP' s conduct economically coerces class members to incur business

costs directly related to C.l-IEP's blue pallets that come into class members'

possession. Such business costs consisting o1 in part, sorting, use of on site

storage and transportation, labor, segregating blue pallets, risk of loss,

administrative, opportunity costs, generalized storage, handling among other

customary business overhead costs;

c. whether, absent CHEF's business conduct, the same business costs would be

incurred by class members;

d. whether the business costs associated with the class's possession and handling of

CHEF's pallets results in the class being non-competitive in the pallet distribution

market as opposed to CHBP when a potential customer is in the market For wood

pallets.

CLASS ACTION Corvu'LAINr —PAGE 23

63. In atltlition to meeling the elements o[ Rule 23(a), the nanred plaintifts/class

represerltjrtives will cstablish that the ekrrnents of Rule 23b(3) arc satisficd such that a class

should be certified. Ctrrrrnrorr questions trf law or lact predorninate over afly qucstions atTccting

only individual class members. A class action is supelior to other available methods lirr the lair

ilrrd elTicierrt adjudication ol' the present coTrtroversy.

64. Thc cconomic and antitrust injurics to thc proposed rcprcscntativcs, class and their

busincss or propcfiy that t'low dircctly tiom CHEP's conduct arisc tiom comrllorl questions of

fact or law and that prcdominatc ovcr any applicable to any i dividual arc as follows:

D.

whether the wood pallet is a properly defined product sufficient to ritate ir relevanl.

producl. rharket;

whether CIIEP's conduct economically coerces class memhers to incur business

costs directly related to CILbP's blue pallets that come into class members'

posscssion. Such business costs consisting of, in part, sorring, usc of on site

storage and transporlation, Iabor, scgrcgating blue pallets, risk of loss,

administrirtive, trpportunity cost$, geflerirlized $tordge, handling arnong othcr

CuritOfi dry husinesS Overhead costsl

whether, absent CHEP's busincss conduct, thc sarnc business costs would be

incurred hy class memhers;

whether the business costs associated with thc class's possession and handling of

CHEP's pallcts results in thc class bcing non-cornpctitivc in the pallet distribution

ft{rket as opporied to CFIEP when a potential customer is irr the mirrket firr wtrod

nallet$.

J

CLASS AcIoN C0MPLATNT - PAGrr 23

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 23 of 30

c. Whether CEHP's condiLet in relation to pallet recyclers is essentially uniform

within the lower forty-eight states of the United States.

whether CHEP's business conduct constitutes an attempt to monopolize Lhe

markets, relevant geographic and product, for wood pallets and is thereby in

violation of the antitrust laws of the United States;

g. whether the named plaintiffs, class representatives and class members were

injured in their business or property by reason of CHEP's violation of the antitrust

laws of the United States and that such injuries are of the type the antitrust laws

arc intended to prevent and which flow directly from CHEP's unlawful conduct;

h. whether the business conduct of CHEF constitutes a violation of the Sherman

Antitrust Act, 15 U.S.C.. § 2 (as amended) 1.15 U.S.C. * 15(a)]; and

i. whether there is a proper measurement of money damages for injury to the

business or property of the class.

VIII. MANAGEABILITY: THE CLASSACTION AS THE SUPERIOR NWTHOI)

In addressing the requirements of predominance and superiority pursuant to Rule

23(b)(3), the following are presented to the court.

65. No wood pallet recycler has expressed interest in or has undertaken an individual

prosecution of the defendant upon the legal basis alleged in this complaint. The existence of any

individual civil actions involving CHEF and a recycler pertains only to issues other than as

alleged in this complaint.

66. There is no litigation now existing, nor any in the past, between recyclers (individually or

as a class) and CFWP in which the legal basis or claim for relief are similar to the instant action.

CLASS ACTION COMPLAINT -PAGE 24

Whcthcr CEHP's conduct in relatiotr to p:rllet recyclers is csscntially utrifonn

within thc lowcr tbrtv-cisht statcs of thc United Statcs.

whether CHEP's husiness conduct constitute$ an attempt to monopolize the

market$, relevant geographic aml pro<luct, for wood pallets and is thereby in

violation of the antitrust laws of the United Statesl

h.

whether the narned plaintiffs, class representatives and class members were

injurcd in their busifless ()r property hy reasrln ()l'CHEP's violatiorr of the antitttrst

laws of thc Unitcd States and that such injuries are ol'the typc the antitrust laws

arc intcnded to preveflt and which llow directly liom CHEP's urtlawftrl conduct;

whether the business conduct of CHEP constitutcs a violatiotr of thc Shennan

Ant i t ru$t Act, l5 U.S.C. $ 2 (as amended) l I5 U.S.C. $ I5(a) l ; and

whether there is a propcr rncasurcrncnt of moncy damagcs fot inir.rry to the

busincss or propcrty of the class.

VIII. MAI{AGEA-BILITY: TTM CLASSACT'ION AS TH[: SUPERIOR METHOI}

In addressing the requirements of predominance and superiority pur$uirnt to Rule

?3(bX3), the following are presented to the coun.

65. No wood pallet recycler has cxpresscd intcrcst in or has undcrtakcu an iDdividual

prosecution of the del'entlant upon the legal basis alleged in this cornplaint. The existeuce of any

individual civil actions involving CHEP and a recycler pertains only kr issues othcr thatr as

allcgcd in this complaint.

66. There is flo litigatiofl nrlw existing, nor any in the past, between recyclers (intlividually or

as a class) and CFIEP in whic-h the legal basis or claim for rclief are similar to the inritant action.

c.

CLASS AcrroN CorvrpLArNT *.PAGE 24

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 24 of 30

67. The bringing and prosecution of this action in the instant forum is consistent with the

jurisdiction and venue authorities recited above and will achieve economies of time for the

parties, counsel arid the coitrt arid properly to allocate the expenditure of valuable federal judicial

resources.

68. The unanimity of claim by the class and the uniform nature of the deFendant's conduct

across the entire spectrum of its relations with the class obviate the potential for any difficulty

with respect to the management of this cause as a class action.

69. This action presents no management issues or difficulties that would preclude the unitary

and representative litigation of the class, its claim and measure of damages.

7(1 The claim asserted by the class is uniform and consistent throughout the class

representatives and absent class members. Specifically, the claim is premised on the operational

norm of the pallet recycle business and the inevitability of the class of pallet recyclers coming

into possession of wood pallets over which CHEF asserts ownership and with regard to which

the class is required to bear business costs that properly are CHEF's. Those costs incurred by the

universal threats and coercive conduct. of CI-LEP, as well as CI-JEP's history of civil litigation and

the initiation of criminal prosecution defines the claim. As such, management of the instant

action is within the abilities of the court and counsel.

71. The universality of the underlying claim, the business conduct of both CHEP and the

class acting within the wood pallet distributive process as well as the effect of the

anticompetitive effect and CHEP's attempt to monopolize make the class action procedural

mechanism superior to any other form of litigation.

72. The class members proposed in this action can he readily identil:ied by trade association

records, trade journals and publications subscription records and parties' correspondence. Class

CLASS ACTION COMPLAINT — PAGE 23

61. The bringing and prosecution of this action in the instant forum is L:onrtisterlt with dtc

.iulisdiction antl venue authorities recited above anrl will achieve ec-ortt)ntics of titrtc for thc

parties, counsel arrd the court and properly ttr allocatc thc cxpcnditurc of valuable fedetal .iudicial

Ieiiource$.

68. 1'he unanimity of claim hy the class and the uniform nature ol'the delend rt's conduct

across thc cntirc spcctrum of its rclations with thc class obviate the potential for any dilficulty

with respect to the mofflgement of this cause fls a class action.

69. This action prcscnts no managcrncnt issncs ot diftculties that would preclude the unitary

and reprcscntativc litigation of thc class, its claim and nlcasurc of darnages.

70. The claim asserted by the class is unif'orm and consistcnt throughor.n the class

rcprcscntativcs and abscnt class mcmbcrs. Spccifically, thc claini is premised on the operational

norm of the pallet recycle business and the inevitability of the class oF pallet recyclers corrting

into possession of wood pallets over which CHEP asserls ownership and with regard to which

thc class is required to bear business costs that properly arc CIHEP's. 'I'hose

costs incurred hy the

uriversal threats and coercive conduct of CHEP, as well as CHEP's history of civil litigatitrn and

the irritiatiorr of criminal prosccution deflnes the clairn. As such, managcmcnt of the instant

action is withifl the ahilitie$ ol'the court ilTld cr)unsiel.

11. The universality of the underlying claim, the business conduct of btlth CFIEP lnd the

class acting within the wotrd pallet distributive proce$$ as well as the ef'fcct of thc

anticompetitive effect and CHEP's attcmpt to rnonopolize make the class action procedural

nrccha.nisrn superior to any other form of litigation.

72. The class members ptoposed in this action can he readily identilied by trade asstrciation

rccords, trade journals and pr.rblications subscription records and parlies' conespondence. Class

Ct..ASS ACTION COMPI.^]NT _ P^GE 25

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 25 of 30

members are easily located because each operates a business and they are a finite group of

recyclers dealing in a single product. Notice pursuant to Rule 23, FED. R. Civ. P. may be

accomplished to assure the requisite due process be afforded to each member of the class.

73. Forensic economics make feasible the methodology for the ascertainment of class

damages within the contemplation of governing and authoritative case law and for the

submission to and payment of appropriate damages by a court appointed and supervised claims

administrator.

74. The class action adjudication of the predominant and common issues as well as the

essential substantive issue of CHEP's antitrust violation, vet lion, is the sole efficient method to

adjudicate this acticn without repetitious litigation, expenditure of scarce judicial resources and

puhli.c and private funds necessarily associated with such litigation. This action presents the

model cause for which the class action rule is designed and is present in the civil rules. As such,

resolution and disposition in a single representative action would benefit the class, the defendant

and the public and presents an orderly and manageable action lhr the court and parties; including

absent class rnembers There exists in this action generalized evidence which will he dispositive

of the asserted legal basis for the claim alleged by the class. Such evidence exists on a class-

wide basis thus obviating what would otherwise be the need to examine each class member's

individual material facts and substantive entitlement to relief.

75. Authoritative case law teaches that common issues predominate when the focus of die

litigation is on the defendant's conduct rather than the individual class member's. C.HEP's

condlLct is the essential element and locus of this action

76. The prospect of repetitious litigation in multiple district courts and the appeals possible in

actions bearing upon the same substantive issue and material [acts is repugnant to public policy.

CLASS ACTIoN COMPLAINT — PAGE 26

rnernbers are easily located because each operates a business and they ale a fiuite grotrp

rccyclcrs dcaling in a singlc product. Noticc pursuant to Rulc ?3, FED. R. Ctv. P. may

accornplished to idssure the requisite due process be afforded to euch member o[ the class.

'13. Forensic economics make feusible the methodology for the i$certilinment ol' clil$s

darnages within the conternplation of goveming ald authoritative case law and for the

submission to and payment of appropriate damages by a court appointed and supervised claims

administrator.

14. 'l'he

class action adjudication of thc prcdominant and cornmon issues as well as the

essential subrt;rntive issue ol'CHEP's antil.ru$t violation, vel non, is the stlle el'llcient metltod to

ailjuilicate this uction without repetitious litigation, expemliture of scarce judicial resources and

puhlic and private funds necessarily associated with such litigation. This actiorr presents the

rnodel cause f'or which the cla:rs action rule is designed anil is present in the civil rules. As such,

rcsoluion and disposition in a singlc rcprcscrrtativc action would bcncfit thc class, thc dct'endant

and the public and prcsents arr orderly and manageahle action l1)r the co rt dnd paflies; ittcluding

ahsent class membent. There exists in this action generalizerl eviclence which will he dispositive

of thc assefted legal basis tbr thc claim allcgcd by thc class. Such cvidcncc cxists ou a class-

wiile basis thus ohviating what would otherwise be the need to examine each class member's

individual material farcts and substantive entitlernent to relief.

15. Authoritative case law teachcs that common issucs orcdominatc when the tbcus of dre

Iitigation is on the del'entlurt's conduct rather than the indivitJual class mernber's. CHEP's

condrrct is the cssential elernent and locus ol this action.

'76. The prospect of repetitious litigation in multiple district courts and the flppeals possible in

trctions bcari g upon thc same substantive issue and nratedal facts is repugnatrt to public policy.

o f

be

CL{sri Ac r roN CoMpLATN'l - PAcr 26

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 26 of 30

This class action is consistent with and serves that public policy. Repetitious actions iii multiple

courts present the judicially unacceptable risk oF inconsistent and varying adjudications upon the

same substantive claim and upon the same material Facts.

77. Class treatment of this action will permit the adjudication ot relatively small monetary

claims by members of recyclers' class who otherwise would find it uneconomical and contrary to

sound business practice individually to bear the significant expense required in

antitrustieconomic business litigation. Meritorious small claims, unilonn in nature, would

remain unresolved with the correlative result, that recurrent. unlawful economic business conduct

would remain unjustly beneficial to the defendant.

7X The absence oF conflict among and within the class as to the common and predominant

issues creates unanimity of purpose that is consistent with class action public policy.

79. The undersigned counsel, and, it may reasonably be anticipated, defense counsel, arc

competent and organized. They are qualified and oriented to prosecute and defend this action

efficiently and consistent with the case law governing the class action procedural device and the

substantive law of antitrust Counsel will he able to assist the court. in this important oversight

role to assure adequacy of representation of the absent class members pursuant to due process

entitlement of absent class members and th.e res judicata effect of judgment arising in the action.

80. The class action rule and many years of case law and scholarly writings make it clear

beyond legitimate challenge that the public purpose underlying the rule is to allow aggregation,

as in the instant action, where the result will he the more efficient conduct and management by

procedures that will resolve class wide questions of fact or law in a single proceeding rather than

what WOLLId he hundreds or thoLisands of small claims subject to the same allegation, proof and

governing law.

CLASS Ac'I'ION COMPLAINT — PAGE 27

This class ac:tion is consistent with and scrves that public policy. Rcpctitiotts actiotrs itl multiplc

courrs prescnt thc judicially unacceptable risk trl'incrrnsistenl. nd varying adjrrdications upon l.he

sarnc substantivc clainr arrd upon the same material Facts.

"17. Class treatment of this action will permit the trdjudicatiorr r:rf rela[ively $mall r ()netary

clairns by members of recyclers' class who otherwisc would find it utrcconotnical atrd cotrtrary to

sound business practice individually to bear the sigrritlcant expense required in

antitrust/economic husincss litigation. Mcritorious small clairns, unifnnn in nature. would

rcrnain unrcsolvcd with the coffelative resull. that recurrent unlawful economic business conduct

would rcrnain unjustly bcncficial to the defendant.

78. The :Ihsence ol'conflict among and within the class as to the cotnmou and prcdotninant

issues creal.es una imity of purpose that is consistent with class action public policy.

79. The undersigned counsel, aM, it may rcasonably hc anticipatcd, dcfcnsc counscl, arc

coftlpetent and organized. They are qualified and oriented to prosecutc and dct'cnd this action

efficiently and consistcnt with thc case hw governing the clati$ actiotr procedlrr l device anil the

suhstantive law of nntitrust.. Counsel will be able to assist the courl in this important oversight

role t() ls$ure adequacy of representation of the absent class melnbcls pursuant to duc proccss

cntitlcrncnt of absent class mernbers and the res judicata effect ofjudgrnent arising in the action.

80. The class action rule and rnany ycars of casc law and scholarly writings rnake it clear

beyond legitimate challengc that thc public purpose underlying the rule is ttr allow aggregdtion,

as in the instant action, where the result will be the more eflficient conduct and management by

procedures that will resolvc class widc qucstions of fhct or law in a single prtrceeding rirLher thiln

what wtruld be hundredri or thousands of srnall clairns subject to the sarne allegatiotr, proof and

goveming Iaw.

CLAss Ac'rroN CoMPLAINT * PAcL 27

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 27 of 30

I

IX. COUNT IATTEMPT TO MONOPOLIZE

81. C.1-IEP has engaged in the anticompetitive conduct as alleged in this complaint with the

specific intent to monopolize the wood pallet product relevant market in the nationwide

geographic market within the tower forty-eight states or the United States; the relevant

geographic market.

82. CHEP's conduct and empirically demonstrated success at consistently raising business

costs to the class during the four years next preceding the filing of this action constitutes and

demonstrates a dangerous probability of CHEF achieving a monopoly and continuing to exert

economic power to exclude members of the class from the wood pallet market. nationwide by

achieving such exclusionary effect and the ability to control output and prices in the pallet

market to consumers.

83. CHEP's demonstrated coercive conduct and attempts to effect a nationwide monopoly in

the relevant geographic and product relevant material to this action constitutes a violation of

Section Two of the Sherman Antitrust Act, 15 U.S.C. § 2, as amended, 15 U.S.C. § 15(a).

Further, the effects of the injlLry to the class business or property in the aggregate and

individually is of the type the antitrust laws were intended to prevent and that such injuries flow

directly from the conduct that the antitrust laws make unlawful.

84. PlaintifFs and absent members of the class have been injured within the meaning of the

Sherman Act in their business or property as alleged in this complaint. Without limiting the

generality of the foregoing, plaintiffs mid members of the class have suffered the unlawful

effects of CHEP's raising of their business costs making them non-competitive vis-à-vis CHEP

in the wood pallet market within the lower 48 states of the United States.

ClAss ACTION COMPLAINT —PAGE 28

IX. COI.JN'I'IATTEMPT TO MONOPOLIZE

8I. CHEP has engaged in the anticornpetitive conduct as alleged in this complaint with the

spccitic intcnt to monopolizc thc wood pallct product rclcvant markct in thc nationwidc

geographic market within the lower li)rty-eight $tates oI r.he [Jnited Strtes; the relcvant

gcographic markct.

82. CIIEP's conduct and empirically demonstrated success at consistently raising husiness

costs to the class during the four years next preceding the filing of this action constitutes and

demon$trates a dangerous probability of CHEP achieving a monopoly and continuing to exeft

eco omiL: power to exclude members of the class fiom the wootl pallet market nationwide by

nchieving such exclusirrnary eflbct dnd the ability to cofltrol output afld price$ i the pallet

m rket t(} con$umers.

83. CIIEP's demonstrated coercive conduct and attemptli to effect a nationwide monopoly in

the lelevant geographic and product lclcvant matcrial to this action constitutcs a violation of

Section Two of the Sherman Antitrust Act, 15 U.S.C. $ 2, as amended, 15 U.S.C. $ 15(a).

Futther, thc eftects of the injury to the clnss husiness or prr)pefly in the rggregate and

individually is tll 'the type the irnlil.rust laws were intended to prevent and that such injuries llow

directly from the conduct that the antitrust laws make unlawfr.rl.

84. Plaintil'l,t and ahsent member$ of the class have heen injured within the meaning ol'the

Shennan Act in their business or propefty as alleged in this complaint. Withor.rt lirniting the

generality of the foregoing, plaintiffs and mcrnbcrs of thc class havc sutTcrcd thc unlawful

eft'ects of CHEP's raising ol'their bu$ines$ co$t$ making them non-competitive vis-t-vis CHEP

in the wood nallet rnirrket wir.hin lhe Iower 48 state$ ol'the United States.

CI,Ass AcTIoN C0MPI'AINT _ P^GE 2II

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 28 of 30

'S

X. PRAYER FOR RELIEF

WHEREFORE, plaintiffs, for themselves and the class of wood pallet recyclers they

represent, pray for legal and equitable relief as follows:

a. That this action be certified and permitted to be maintained as a class action

pursuant to Rule 23(b)(3) of the FED. R. Civ. P. and that, if warranted, that an

appropriate sub-class be established pursuant to FLU. R. Civ. P. 23(cX2):

b. That this court adjudge that CHEP's conduct resulting in the raising of the

business costs oF the plaintiffs and class to be an unlawful attempt to monopolize

the àfleged relevant geographic and product market in violation of Section 1'wo of

the Sherman Act 15 U.S.C § 15(a); 15 U.S.C. § 2 (as amended);

c. That j udgrnent he entered against CI-WP and in favor of the plaintiffs and class for

damages allowed by law, that such damages he enhanced three-fold as allowed by

law together with costs oF suit (including costs of experts) and reasonable attorney

fees as provided by law;

d. That CHEP be permanently restrained arid enjoined from continuing the unlawFul

attempt to monopolize by any scheme, artifice or design to raise the business costs

to wood pallet recyclers as alleged un this complaint—pursuant to 15 USC. § 26

— Section 16 of the Clayton ActS;

e. That the court. include in its judgment against CHEP and in favor of the plaintiffs

and class prc-judgment interest as permitted by law; and,

f. That the court grants to the plaintiffs and class such other and further relief as

may be permitted by law and may he meet and just. in the premises.

CLASS ACTION COMPLAINT — PAGE 29

X. PRAIT,R FOR RELIEF

WHEREFORE, plaintiffs, for thcrnsclvcs and thc class of wood pallet tecyclcrs thcy

rcprcscnt, pray for legal and equitable relief' as follows:

a. That this action be certified and pcrmittcd to hc rnaintaincd as a class action

pursuant to Rule 23(bX3) of thc Frn. R. Cw. P. and that, if warranted, that an

appropriate sub-class be established pursuiult to Friu. R. Ctv. P. 23(cXZ);

b. 'l'hat

this court adjudgc that CHEP'S conduct resulting in the raising ol' the

husiness co$t$ ol'the plaintiffs and class to be an unlawful attempt to uronopolize

Ihe alleged relevant geographic and product market in violation of Section 'l

wo of

Ihe Sherman Act 1-5 U.S.C $ 15(a); l5 U.S.C. $ 2 (as amcndcd);

o.

That j udgment be entercd against CFIEP and in favol of the plaintiffs and class for

darnagcs allowcd by law, that such damages he enhancetl three-l'old as allowed by

law togcther with costs ol'suit (including crosts of experts) and reasonahle attomey

fees as provided hy law;

That CHEP bc pcrmanently restrained and enjoined I'rum continuing the unlawlul

ilttempt to monopolize by any scheme, artifice or design to raisc thc busincss costs

to wood pallct tccyclcrs as allcgcd un this cofipldint-pursulnt to l5 tI.S.C. $ 26

* Section l6 of the Clayton Act.;

That the court include in its judgmcnt against CHEP and irr tavor of the plaintift.s

and class prc-judgrnent interesl as permitted by law; antl,

That the court grants to the plaintiffs and class such other and funhcr rclief as

may bc permitted by law and t ay he Tneet and just in the premises.

f.

Ct,Ass ACTI0N COMPI.AINT _ PAGE 29

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 29 of 30

JURY TRIAL DEMANDED

Pursuant to Rule 38(h) of the FED. R. Civ. P., the plaintiffs. for themselves and the class

which they represent, demand a trial by jury as of right of all issues so triable.

Dated: February , 2008.

Respectfully submitted.

Je D. yars, Jr. / ( Jka as State Bar No: S107

C ISTIAN & BYARS502 Garrison AvenueP.O. Box 1725Fort Smith, AR 72902(419) 782-9147 Telephone(479) 182-3623 Facsimilc

1 Ierhert T. Sc wartzTexas State Bar No: 17863020Florida Bar No: 100248BAILEY & GALYEN18333 Egret Bay Blvd.. Suite 120Houston, TX 77058-3 860(281) 335-7744 Telephone(281) 335-4774 Facsimile

COUNSEL FOR THE PLAINTIFFSAND FOR ALL OTHERS SIMThARYSITUATED

CLASS ACTION COMPLAINT —PAGE 30

,IURY TRIAL DEMA}IT}ET)

Pursuant to Rute 38(h) of thc FrjD. R. Crv. P., thc plaifltiffs, firr thernsclves and the class

which they represent, dcmand a trial hy jury as of right of all issues so triable.

Dated: Fcbmaryfl, ;OOS

Resnecttirllv submitted.

50? Garristrn AvcnueP.O. Box 1725Fort Snirh, AR 72902(4'l 9l'7 82-9 | 41 Telcphone(479) 782-3623 Facsimilc

'l'exas State Bar No: I7863020Florida Bnr No: 100248BAILEY & CALYEN18333 Egrct Bay Blvd., Suite l?0Hou$ton. TX 77{J58-3860(281 ) 335-7744 Telephone(281 ) 335-4774 Facsimilc

COI]NSEL F(}RAND FOR ALI,SITUATED

THE PLATN'I'IFFSOTHERS SIMII,ARY

State Bar No:ISTIAN & BYARS

CLAss Acrr0N CoMPt.ATNT - PAGb, 30

Case 2:08-cv-02012-RTD Document 1 Filed 02/06/2008 Page 30 of 30