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Weyerhaeuser focus of federal lawsuit
Saturday, April 12, 2003 9:25 AM PDT
PORTLAND (AP) - Two Washington lumber companies and the Confederated Tribes of the Siletz have filed a federal lawsuit against Weyerhaeuser, alleging the timber giant used high-pressure tactics to force the closure of competing mills owned by the plaintiffs.
The lawsuit, filed in U.S. District Court in Portland, seeks $109.8 million from the Federal Way, Wash., company.
Weyerhaeuser officials say the company has done nothing wrong. The competing sawmills' troubles began with the Asian financial crisis of 1997 and worsened as a result of their own management practices and financial pressures, the company says.
"Plaintiffs' problems are not the result of anything that Weyerhaeuser did," said Michael H. Simon, a Portland-based attorney with Perkins Coie, who is representing Weyerhaeuser.
The conflict centers on processing of red alder, Alnus rubra, sometimes called western red alder, a Northwest native species.
Although sales of hardwood, including alder, make up only 4 percent of Weyerhaeuser's $7.6 billion wood-products business, alder production has increased and high-quality alder prices have recently surpassed Douglas fir prices.
The wood has gained popularity recently for making furniture, cabinets and paint brushes. Alders often are the first trees to come back in burned-over forests.
Alder production in Oregon and Washington, which accounts for nearly all of U.S. production, jumped from 130 million board feet in 1991 to about 450 million board feet last year, said Dave Sweitzer, the association's secretary-manager.
"Douglas fir was king," Sweitzer said. "To have something everyone had considered a weed surpass it in price, which grows twice as fast, it's unbelievable."
The lawsuit contends that Weyerhaeuser expanded into the alder market, then used its purchasing practices to force competitors out of business.
In 1980, 40 alder sawmills operated in Oregon and Washington, according to the lawsuit. Weyerhaeuser entered the market by buying Northwest Hardwoods, which owned two sawmills.
Through a series of acquisitions, expansions and conversions - including the mid-1980s transformation of a softwood mill in Longview, Wash., into a hardwood mill - Weyerhaeuser spread its control to about 65 percent of the market by 1995, according to the lawsuit.
As of 2001, Weyerhaeuser's market share exceeded 75 percent, the suit says.
In addition, plaintiffs Ross-Simmons Hardwood Lumber, based in Longview, Wash., and Smokey Point Hardwoods, based in Arlington, Wash., allege that Weyerhaeuser bought large quantities of logs to deprive Ross-Simmons and other competitors of raw materials.
The stockpiled logs were damaged and would be worth less after storage, they said.
Additional testimony planned by the plaintiffs includes claims that Weyerhaeuser falsified statements to state forestry officials, exaggerating its dependence on alder logs from state land partly to seal its dominance in the market.
Frank Mendizabel, a Weyerhaeuser spokesman, said the company will "vigorously contest the allegations." He said the company's dominance has resulted from its ingenuity.
"It's really a simple business plan," said Simon, the Weyerhaeuser attorney. "What the customer wants is what you should make."
The trial, begun Tuesday, is expected to last about three weeks. |