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Weyerhaeuser settles alder claims.

Byline: From Register-Guard and news service reports

Weyerhaeuser Co., the world's biggest lumber company, agreed to pay $34.5 million to four small alder mills in Oregon and Washington to settle claims that the giant firm monopolized the market for alder, a wood used to make furniture and flooring and that grows only in the Pacific Northwest.

The two Oregon companies are Westwood Lumber Company Inc. and Morton Alder Mill Inc. Reedsport-based Westwood has mills in Reedsport, Junction City and Saginaw.

The settlement follows a $79 million verdict against the company in a separate case last year, when jurors found that Weyerhaeuser sold alder at below-market prices and prevented a competitor from bidding on timberland. Two similar lawsuits are scheduled for trial later this year.

Weyerhaeuser's agreement avoided a trial before the same judge who presided at the case won last year by Ross-Simmons Hardwood Lumber of Longview, Wash. Weyerhaeuser acknowledged in an SEC filing last week that it was ``not likely to prevail,'' after the judge blocked Weyerhaeuser from contesting findings in the earlier case.

``They would start with the basis that they're involved in an antitrust conspiracy,'' said antitrust attorney Colin Underwood, a partner at the New York-based law firm Proskauer Rose, who is not involved in the case. ``The only question is damages.''

The settlement announced Tuesday resolves claims by Cascade Hardwood Inc. and Alexander Lumber Mill of Washington state and Westwood and Morton in Oregon. Weyerhaeuser admitted no liability and said it will take a $23 million charge, or 10 cents a share, in the first quarter to pay for the accord.

Michael Haglund, a lawyer representing the companies that filed the lawsuit, said the plaintiffs were satisfied that the settlement makes up for losses they believe they suffered when, they contend, alder prices were being artificially pushed up. Haglund said the plaintiffs also believe that Weyerhaeuser's practices have changed in the past year.

``We're hopeful that the competitive landscape in the alder industry will continue on the course that it is on right now,'' Haglund said.

But Frank Mendizabal, a spokesman for Weyerhaeuser, said he doesn't know of any specific changes the company has made to its business practices, since he said the company believes that it has never done anything wrong.

``We continue to believe that we have operated legally and ethically in the alder business, as we do in all our businesses,'' Mendizabal said.

He said the company felt that it was in its best financial interest to settle the case.

Weyerhaeuser, based in Federal Way, Wash., is appealing the verdict in the Ross-Simmons case. The company reported that it took a $79 million pretax charge in the first quarter of 2003 to pay for the verdict. Jurors in that case awarded $26.25 million in damages, tripled under state antitrust laws to almost $79 million.

Underwood said how and when the 9th U.S. Circuit Court of Appeals decides that appeal may determine whether Weyerhaeuser tries to settle the other pending lawsuits.
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Title Annotation:Business; The lumber company will pay small mills $34.5 million over antitrust accusations
Publication:The Register-Guard (Eugene, OR)
Geographic Code:1USA
Date:Mar 10, 2004
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