Supreme Court overturns $79 million award against Weyerhaeuser
Associated Press Writer
SEATTLE ” The U.S. Supreme Court has tossed out a $79 million judgment against Weyerhaeuser Co., but the forest products giant could face a new trial on antitrust claims from a defunct sawmill.
Ross-Simmons Hardwood Lumber Co. of Vancouver, Wash. ” which went out of business in 2001 ” convinced an Oregon jury that Weyerhaeuser paid too much for alder logs it didn’t need, with the goal of driving competitors out of business.
Under federal antitrust law, the jury’s award was tripled to $79 million.
Supreme Court justices overturned that 2003 judgment in a 9-0 ruling Tuesday, saying Ross-Simmons must meet a stricter legal standard than the trial court originally allowed.
Writing for the court, Justice Clarence Thomas said Ross-Simmons should have been required to prove that its competitor had a dangerous probability of recouping the losses it incurred in bidding up prices.
The failure to satisfy that standard “cannot support the jury’s verdict,” Thomas wrote.
Federal Way-based Weyerhaeuser applauded Tuesday’s decision.
“The Court’s unanimous ruling sets a clear standard that permits companies to bid competitively for raw materials without risk of violating antitrust laws,” Weyerhaeuser Vice President Sandy D. McDade said in a statement.
But Mike Haglund, a Portland, Ore.-based lawyer for Ross-Simmons, said he expects to prevail again if the case eventually returns to U.S. District Court for a new trial.
“We’re going to have to go back and retry it under that new standard,” Haglund said. “I don’t think the result will change ” we’ll still win. But it is a tougher standard.”
Shares of Weyerhaeuser closed down 20 cents, or 0.24 percent, at $82.83 in Tuesday trading on the New York Stock Exchange.
Weyerhaeuser appealed the jury award to the 9th U.S. Circuit Court of Appeals in San Francisco, which affirmed that Ross-Simmons needed only to convince a jury that Weyerhaeuser had bought more logs than it needed at a higher price than necessary to gain a monopoly.
The Bush administration asked the Supreme Court to take the case, arguing that the San Francisco-based appellate court erred by setting a low and confusing standard that threatened to “chill pro-competitive conduct by companies that bid aggressively.”
From 1998 to 2001, 27 alder sawmills closed in the Pacific Northwest. Alder, the Northwest’s leading hardwood lumber, is used in furniture and specialty products such as picture frames and musical instruments.
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