Another jury hits Weyerhaeuser

Weyerhaeuser Co. has been ordered by a U.S. District Court jury in Portland to pay almost $28 million in damages — which can be tripled to $84 million under antitrust laws — in the latest of a series of lawsuits alleging the wood products giant illegally manipulated the prices of alder logs and finished lumber.

“It’s another instance in which regular folks are able to take a stand against a large company doing something wrong and win,” said Portland lawyer Steve Crew, who was on the legal team for plaintiffs in the case. “We made it clear that the policies were not right and the jury agreed that you cannot take advantage of people and businesses just to get ahead in the business world — you have to play fair.”

Weyerhaeuser’s top lawyer said in a written statement that the company will appeal the verdict on the same grounds it cited in a successful appeal of a separate case. A Portland jury awarded $79 million in that 2003 case, but the verdict was vacated a year ago by the U.S. Supreme Court in a landmark competitive bidding and pricing decision.

Sandy McDade, a senior vice president and general counsel for Weyerhaeuser, said his company is disappointed by the latest jury verdict but eager to test the precedent set by the high court last year.

“We are confident it will be reversed on appeal because last year the U.S. Supreme Court decided in our favor a case presenting virtually identical issues,” McDade said. “We fully expect that the Court of Appeals will apply that precedent.”

In the earlier case, Weyerhaeuser was accused of “predatory buying,” for purchasing logs at above-market prices as a means of forcing competitors out of the market. The Supreme Court, in a 9-0 decision, sided with Weyerhaeuser and several business interests who argued in supporting briefs that plaintiffs failed to show Weyerhaeuser sold its resulting products at below-cost prices, and that both consumers and the economy benefit when companies bid up the prices of raw goods.

The biggest difference in the most recent case is the allegation that Weyerhaeuser monopolized the market for finished alder lumber, rather than logs. Morelock Enterprises Inc., of Bend, filed the suit four years ago and the case was later granted class-action status to include all direct purchasers of alder lumber from Weyerhaeuser.

The jury agreed with plaintiffs, who charged that Weyerhaeuser’s domination of the market for alder logs allowed it to raise prices above competitive levels for alder lumber — which is used for furniture, cabinets and flooring.

In addition to the two lawsuits that have been decided by federal juries, Weyerhaeuser has agreed to out-of-court settlements in two other cases involving its alder pricing policies.The company agreed to pay $34.5 million to four small alder mills in Oregon and Washington to settle one lawsuit in March 2004, and a month later agreed to a $14 million settlement in a lawsuit brought by a British Columbia-based timber company.

Weyerhaeuser, based in Federal Way, Wash., is among the world’s largest wood products companies. Its 2007 sales reached $16.3 billion.

Posted on Wednesday, April 30th, 2008, in Our Work In the News |
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