Avery Dennison Corporation ("Avery" or the Company) manufactures and distributes items such as adhesive materials, apparel labels and tags.

The original Complaint charges Avery and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that Avery failed to disclose that its financial results during the Class Period were a product of a tacit and illegal anti-competitive scheme with its leading competitor, UPM-Kymmene, OYJ ("UPM"), whereby the Company and UPM manipulated the labelstock supply market.

The Complaint further alleges that during the Class Period, Defendants issued false and misleading statements to the marketplace that artificially inflated the price of Avery's shares. The statements disseminated by the Defendants during the Class Period failed to disclose and indicate (1) that Avery was engaged in an illegal anti-competitive scheme with UPM to drive a more stable price environment within the labelstock industry; (2) that the Company's financial results were a product of its anti-competitive behavior; (3) that the Company knew that its anti-competitive behavior could possibly subject the Company to regulatory scrutiny in the future if such anti-competitive behavior was discovered; and (4) that its financial results would be materially impacted if the Company were forced to stop its anti-competitive behavior. On April 14, 2003, the United States Department of Justice ("DOJ") issued a press release wherein it announced that it intended to file a civil antitrust lawsuit in the United States District Court for the Northern District of Illinois in Chicago to block UPM from acquiring Morgan Adhesives Company ("MACtac"). Among the reasons given for filing the suit, the DOJ stated that its investigation had revealed that the merger between UPM and MACtac was one in which Avery and UPM sought to coordinate. Additionally, on April 14, 2003, Avery announced that the DOJ had started a criminal investigation into competitive prices in the labelstock industry and would shortly issue a subpoena to the Company in connection with that investigation. On April 15, 2003, the DOJ filed its Complaint against UPM. Therein, the DOJ alleged that UPM and Avery were in "positions of marketplace dominance and had significant incentives to engage in explicit competitive coordination." The DOJ also alleged that evidence of competitive coordination was enhanced by a "longstanding strategic paper supply relationship" between UPM and Avery. The DOJ further alleged that "the supply relationship provided UPM and Avery with the motivations, opportunities, and means to coordinate on price, monitor adherence, punish cheating, and engage in side payments that could be hidden in label paper transactions." News of Avery's anti-competitive behavior shocked the market. On April 15, 2003, Avery's stock fell $4.19 on unusually high trading volume to close at $55.94.

According to the Company’s FORM 10-Q for the quarterly period ended July 1, 2006, on September 24, 2003, the court appointed a lead Plaintiff, approved lead and liaison Counsel and ordered the two actions consolidated as the “In Re Avery Dennison Corporation Securities Litigation.” Pursuant to court order and the parties’ stipulation, Plaintiff filed a consolidated Complaint in mid-February 2004. The court approved a briefing schedule for Defendants’ motion to dismiss the consolidated Complaint, with a contemplated hearing date in June 2004. In January 2004, the parties stipulated to stay the consolidated action, including the proposed briefing schedule, pending the outcome of the government investigation of alleged anticompetitive conduct by the Company. The court has approved the parties’ stipulation to stay the consolidated actions. There has been no discovery and no trial date was set.

According to a press release dated October 19, 2006, Avery (NYSE:AVY) today announced that it has been notified by the DOJ that the DOJ has decided to close its investigation into competitive practices in the label stock industry without any further action. The Company disclosed the investigation in April 2003.

On January 12, 2007, the lead Plaintiff voluntarily dismisses this consolidation action and the Complaint without prejudice. On January 16, 2007, Judge Stephen G. Larson dismissed the action without prejudice. The parties are each to bear their own costs.