Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc.

549 U.S. 312 (2007)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Hardwood-lumber mills usually acquire logs in one of three ways. Some logs are purchased on the open bidding market. Some come to the mill through standing short- and long-term agreements with timberland owners. And others are harvested from timberland owned by the sawmills themselves.

P began operating in 1962. d entered the Northwestern hardwood-lumber market in 1980 by acquiring an existing lumber company. d now owns six hardwood sawmills in the region. By 2001, d's mills were acquiring approximately 65 percent of the alder logs available for sale in the region. From 1990 to 2000, D made more than $75 million in capital investments in its hardwood mills in the Pacific Northwest. Production increased at every mill that D owned. D used 'state-of-the-art technology' to increase the amount of lumber recovered from every log. Logs represent up to 75 percent of a sawmill's total costs. From 1998 to 2001, the price of alder sawlogs increased while prices for finished hardwood lumber fell. P suffered heavy losses during this time. P blamed D for driving it out of business by bidding up input costs, and it filed an antitrust suit against D. P alleged that D had used 'predatory-bidding' in that D had overpaid for alder sawlogs to cause sawlog prices to rise to artificially high levels as part of a plan to drive P out of business. D moved for summary judgment on P's predatory-bidding theory. The District Court denied the motion. The District Court also rejected proposed predatory-bidding jury instructions that incorporated elements of the Brooke Group test. The District Court instructed the jury that P could prove that D's bidding practices were anticompetitive acts if the jury concluded that D 'purchased more logs than it needed, or paid a higher price for logs than necessary, in order to prevent P from obtaining the logs they needed at a fair price.' P got the verdict, and D appealed. D argued that Brooke Group's standard for claims of predatory pricing should also apply to claims of predatory bidding. The Ninth Circuit disagreed and affirmed the verdict. 'The concerns that led the Brooke Group Court to establish a high standard of liability in the predatory-pricing context do not carry over to this predatory bidding context with the same force.' The Supreme Court granted certiorari.