Risk Management

Supremes Cut Down Weyerhaeuser Verdict

Forest products company successfully argues that simply because a jury believed it purchased more lumber than needed or paid more than it had to, i...
Dave CookFebruary 20, 2007

In a 9-0 verdict, the Supreme Court has thrown out a $79 million award against forest products company Weyerhaeuser, which had been accused of predatory buying and of attempting to monopolize the lumber market in the Pacific Northwest.

The Ross-Simmons Hardwood Lumber Co., a Longview, Washington, company that shut its doors in 2001, blamed Weyerhaeuser for its demise, according to Reuters. Ross-Simmons reportedly charged that Weyerhaeuser paid too much for alder logs, the predominant species in that part of the country, to drive its competitors out of business.

A jury verdict, upheld by the U.S. Court of Appeals for the Ninth Circuit, found Weyerhaeuser guilty on antitrust grounds. The lumber giant appealed to the Supreme Court, maintaining that the lower court had applied the wrong legal standard.

Specifically, according to Reuters, Weyerhaeuser argued that simply because the jury believed it purchased more lumber than needed or paid more than it had to, it should not be held liable for predatory buying.

In an appeal supported by the Department of Justice, Weyerhaeuser reportedly maintained that plaintiffs should meet the Supreme Court’s higher, 1993 standard for predatory selling. To meet that standard, noted Reuters, Ross-Simmons would have had to demonstrate not only that it suffered a short-term loss but also that it had a “dangerous probability” of recouping that loss in the long term.

Writing for the court, Justice Clarence Thomas agreed with Weyerhaeuser’s argument, noting that Ross-Simmons had conceded that its case did not meet that higher standard.

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