Roundwood cartel: bundled action against the state of Baden-Württemberg dismissed for violation of the German Out of Court Legal Services Act (Regional Court of Stuttgart, judgment of 20 January 2022 – ref. no. 30 O 176/19)

The Regional Court of Stuttgart dismissed the action as unfounded. The Regional court of Stuttgart held that the bundled claim brought by a registered debt collector (Inkassodienstleister) in the field of competition law violated the German Out of Court Legal Services Act. The assignment of the claims of the sawmills to the plaintiff was therefore null and void for violation of public legal regulation. Consequently, in the court’s view, the plaintiff Special Purpose Vehicle was not entitled to conduct the present action due to the lack of an effective transfer of the claims at issue. 

As the court pointed out, the provision of Out of Court Legal Services has to be in compliance with the registration as debt collector. A legal service mainly consisting of the collection of cartel damage claims with the aim of bundling these claims and bringing them to court as bundled collective action exceeds the scope of the legal service authorization granted by the registration. In fact, the complexity of cartel damage claims exceed – in the court’s view – the capacity of registered debt collectors. Compared to every day debt collection services, the legal questions arising in connection with cartel damage claims and the underlying - often detailed - facts are far more complex and extensive. In the vast majority of cartel damage disputes, for example, extensive economic expertise is required regarding the market situation, the definition of the relevant market, the pricing mechanisms and the restrictive effects on competition caused or intended by the cartelists. Therefore, the Regional court of Stuttgart held that, as a matter of principle, cartel damage claim may not be subject to bundling by debt collectors that wish to create a collective claim.

Furthermore, by bundling the high number of 36 heterogenous claims, the Special Purpose Vehicle maneuvered itself in a situation of conflicting interests. In fact, several questions of material law differ within the ‘class’ of claim holders meaning that claims with highly different chances of success have been bundled into a single big claim. Hence, in the court’s view, the assignment model conflicts with the plaintiff's duty to provide the best possible legal services to each individual sawmill.

The legal and financial dependence of the plaintiff on the U.S. based litigation funder parent company also resulted in the palpable danger that an external party might influence the decisions taken by the Special Purpose Vehicle during the procedure, thus creating a second frontline of conflicting interests.

In the court’s view, these factors made the Roundwood cartel case different from the Air Deal case, which was decided by the Federal Court of Justice (judgment of 13 July 2021, ref. no. II ZR 84/20, see our article of 22 September 2021).

The decision of the Regional Court of Stuttgart illustrates the legal uncertainty that still exists in connection with the construction of ‘self made’ collective actions under German law. After the Federal Court of Justice, in the above mentioned Air Deal case, has strengthened the bundled assignment models, the ruling of the Reginal Court of Stuttgart on the roundwood cartel shows that the Air Deal judgment is probably not yet perceived as the last word in the field of cartel damages claims. Since, in addition, various bundled claims by Special Purpose Vehicles are pending in the context of the truck cartel at the Regional Court of Munich (ref. no. 37 O 18602/17) and the Higher Regional Court of Munich (ref. no. 29 U 1319/20), the development remains exciting.