Sawmills still at loggerheads with Weyerhaeuser after win
Seattle Times business reporter
The owners of several small sawmills vowed to continue their fight against Weyerhaeuser over allegedly monopolistic business practices, despite a government decision in the company's favor in Oregon.
The sawmills wanted to bar Weyerhaeuser from buying alder logs from state-owned forests, arguing that its control of more than 70 percent of the market gives it power to squeeze them out. After killing off small mills by paying high prices for alder, they said, Weyerhaeuser could eventually underbid, ultimately lowering the state's proceeds from its wood sales.
In two hearings before Oregon officials, the Federal Way-based company argued it has helped transform alder from a weed tree into a relatively expensive wood, generating revenue and jobs for the state.
Executives argued the rise in alder prices in recent years proves the market is healthy.
On Monday, the Oregon forestry department agreed with Weyerhaeuser and said that allowing the company to buy state wood doesn't hinder competition.
A lawyer for seven sawmill owners who requested the change said yesterday that the government decision won't derail two other alder-related lawsuits against Weyerhaeuser that are set for trial in March. Like the request for Oregon to bar the company, the lawsuits seek to curb its alder business.
"We're disappointed because we think the state should not be pursuing a policy that promotes a monopoly," said Michael Haglund, an attorney who represented the mills and is handling other litigation against the company. "But we've got an opportunity for much greater and comprehensive relief at a trial."
The Oregon decision was a rare victory for Weyerhaeuser in the legal battle over its role in the $400 million Northwest alder industry.
In April, a jury in Portland's U.S. District Court found that Weyerhaeuser had violated federal antitrust laws by manipulating the alder market and awarded damages worth $79 million to a now-defunct sawmill in Longview, Wash.
Weyerhaeuser is appealing the antitrust ruling.
Following that verdict, other sawmills asked Oregon to revoke the special permission it granted in 1999 allowing Weyerhaeuser to buy logs from state land.
Rules normally ban companies that export logs from buying state-owned timber.
Though the state-owned timber in Oregon represents just a small part of Weyerhaeuser's global operations, a decision against the company could have led to a similar appeal in Washington, where Weyerhaeuser buys logs from 2.1 million acres of publicly owned land.
"We're gratified," said Weyerhaeuser spokesman Bruce Amundson of Monday's decision. "Maintaining a process that permits all companies to bid on its hardwoods allows the state to receive the highest value for this valuable resource."
Monday's decision is expected to be adopted Tuesday by the Oregon State Land Board, which oversees the department.
As part of the decision, the department said it would change its log-sales system to help small sawmills. It will try to increase the number of tree sales composed of mostly alder stands, rather than those mixed with Douglas fir, accept more data from mills on the price of logs to make its data more accurate, and try to separate bids for alder and other tree species in the same stand.
The steps would lead to more transparency on log prices, it said.
Bradley Meacham: 206-515-5066 or email@example.com
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