Competitors seek class action suit against big label makers.

While Avery Dennison Corp. still faces a criminal antitrust investigation by the Justice Department, the giant label maker is also battling a consolidated set of lawsuits seeking class action status that were filed by a cadre of smaller competitors.

In a Securities and Exchange Commission filing last week, Avery and its two co-defendants--the three largest players in the label industry--filed a response to the civil complaints that have been consolidated in federal District Court in Pennsylvania.

The smaller competitors accused the three defendants of colluding to fix prices, shortly after the Justice Department began an investigation that ultimately blocked the merger of No. 2 label maker Raflatac Inc., a unit of Finland's UPM-Kymmene Group, with No. 3 Mactac, a unit of Bemis Inc. Avery Dennison, based in Pasadena, is the largest U.S. label maker.

The Justice Department alleged that UPM and Avery Dennison had engaged in discussions about label prices and had tried to limit competition in the label stock market.

But the DOJ also acknowledged that the attempt had not been successful and prices in the industry had actually fallen. The investigation is ongoing, and it is unclear whether charges will be filed.

In their SEC filing, Avery and the other defendants "deny that there ever was any agreement between them to fix the prices of label stock." Under the Sherman Act, which prohibits agreements between two companies to restrain trade, suppliers and distributors such as Avery Dennison and UPM can "legitimately exchange information about prices and the reception of their products in the downstream market," the companies said.