Thursday, February 12, 2004 - Page updated at 12:00 AM
Weyerhaeuser on defense in antitrust trials
Seattle Times business reporters
The plaintiffs are small sawmills and lumber companies that claim Weyerhaeuser violated federal law by squeezing them out of the market for alder, a hardwood used for expensive furniture, cabinets and Fender guitars. They want the court to force the company to sell some assets and pay damages totaling more than $300 million, an amount surpassing Weyerhaeuser's 2003 profit.
The high-stakes trials — two next month involving five plaintiffs and a third in May with another plaintiff — are the latest in the Federal Way company's struggle to defend its role in the alder market, where it controls most of the production in the Northwest.
Weyerhaeuser sought to postpone the trials until fall and extend the timetable for several months. But U.S. District Court Judge Owen Panner refused and said each trial could likely be completed in nine days or less.
"The complaint alleges that, in recent years, dozens of hardwood mills in the Pacific Northwest have closed their doors forever in the face of Weyerhaeuser's anti-competitive tactics," Panner wrote. "If that is true, then further delay is not in the public interest. Conversely, if these allegations are unfounded, then the cloud hanging over Weyerhaeuser should be dispelled as quickly as possible."
Weyerhaeuser declined to comment on the proceedings, citing Panner's request that parties not discuss the matter. Officials argue that the company, through efficiency and innovative technology, helped transform alder from a weed tree into a profitable niche product.
Though alder represents a small fraction of Weyerhaeuser's business, the trials have potentially broad implications for the company, which acquired smaller rivals to strengthen its position in a rapidly consolidating global industry. The world's largest lumber company controls about 75 percent of the $400 million Northwest alder industry, which employs about 6,000 people in Washington and Oregon.
The trials are scheduled to begin less than a year after a Portland jury found that Weyerhaeuser violated federal law by using monopoly power to manipulate the alder market. It ordered damages — trebled under antitrust law — of $79 million to Ross-Simmons Hardwood, the owner of a Longview sawmill that closed in May 2001.
The jury agreed Weyerhaeuser deliberately bid up the price of alder logs to force rivals out of business, tied up log supplies through long-term, exclusive contracts and bought logs it didn't need to deprive rivals of wood supply.
Weyerhaeuser is appealing the Ross-Simmons verdict; in briefs submitted to Panner, it argued that the verdict was defective.
It also contends that introducing findings from that case into the first of the new trials would be "highly improper and unfairly prejudicial."
Weyerhaeuser, whose officials originally characterized the antitrust case as an attempt at extortion, has annual revenue of $20 billion.
Elsewhere, Weyerhaeuser has a win on the antitrust front. In December, the state of Oregon denied a request by a group of sawmills to bar the timber giant from buying alder logged in state-owned forests. The group had contended Weyerhaeuser could kill off small mills by paying high prices for alder, and eventually underbid the rest of the market, lowering the state's proceeds from its wood sales.
Oregon agreed with Weyerhaeuser's contention that it generates revenue and jobs for the state and said that allowing the company to buy state wood doesn't hinder competition.
But Panner is the one who sets the ground rules for the upcoming trials. He gave the plaintiffs a boost by ruling that results of last year's jury verdict against Weyerhaeuser were relevant for the first trial, set for March 9.
In the upcoming trial, Weyerhaeuser cannot contest the existence of a monopoly — at least through 2001 — which it maintained through anti-competitive conduct, Panner wrote. The plaintiffs, however, must prove antitrust injury and that Weyerhaeuser maintained a monopoly through 2002, he wrote.
The trial results from a lawsuit filed by four mills: Cascade Hardwoods of Chehalis; Alexander Lumber Mill of Onalaska, Lewis County; and Oregon's Westwood Lumber and Morton Alder Mills.
A second lawsuit was filed by Coast Mountain Hardwoods, which operated a sawmill in Delta, B.C., until Weyerhaeuser acquired it in September 2000. The suit alleges Weyerhaeuser illegally kept Coast Mountain in a weak financial position so that it could be acquired. That trial is to begin around March 23.
Another trial including Washington Alder of Mount Vernon is scheduled for May.
Bradley Meacham: 206-515-5066 or at bmeacham@seattletimes.com
Hal Bernton: 206-464-2581 or hbernton@seattletimes.com
Copyright © 2004 The Seattle Times Company
![]()

nwjobs

Post a comment

Michelle Goodman blogs about work/life balance.
How to tell your office you're gravely ill
Post a comment
nwautos

Choosing a new car? Weigh the impact of your choice on your wallet and on the planet.
Post a comment
- Craigslist adoption ad: A plea by young mother-to-be? A scam?
- Italian lead prosecutor argues Knox motive was hatred
- 'The Road' takes Viggo Mortensen to Mount St. Helen's and Astoria, Ore.
- Italian prosecutors request life sentence for UW student
- Man shot in chest on E. Union Street in Capitol Hill
- Washington state wines make annual best-of list
- Mariners Blog | A Mariners-Tigers swap makes a whole lot of sense for both teams
- Lynnwood is reinventing itself — again
- Child-support error costs nearly $21,000
- Genetics anti-bias law takes effect
- Senate vote clears hurdle
227 - First key vote today on Senate health bill
168 - Mariners add six to 40-man roster
147 - Tight Senate vote launches health care over hurdle
91 - Child-support error costs nearly $21,000
90 - Palin excitement builds in Tri-Cities
75 - Prosecutor requests life in prison for Amanda Knox
74 - Cutting through breast-cancer confusion
60 - Game thread
60 - Saturday links
54
- Washington state wines make annual best-of list
- Nonprofits get creative using Twitter and Facebook to make donation easier
- It's possible to recover a life lost to hoarding
- Lynnwood is reinventing itself — again
- Great places to cross-country ski for free (or almost) in the Methow
- Child-support error costs nearly $21,000
- 'The Road' takes Viggo Mortensen to Mount St. Helen's and Astoria, Ore.
- Recipes: Sesame Pork Roast, Sour Cream Mashed Potatoes, Gingerbread with Lemon Sauce and more
- UW provost tapped for Nike's board
- 175 foster kids in Washington get 'forever families'




