Weyerhaeuser Co. v. Ross Simmons Hardwood Lumber Co. Case Brief Summary | Law Case Explained

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Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc.
| 549 U.S. 312 (2007)

Predatory bidding occurs when a buyer bids up a resource’s price so high that the competition can’t afford to compete and is forced out of business. As a result, the buyer gains monopsony power and dominates the market. In Weyerhaeuser Company versus Ross-Simmons Hardwood Lumber Company, the United States Supreme Court considered the applicable standard for evaluating predatory-bidding claims.

Weyerhaeuser Company operated sawmills and sold hardwood lumber. In nineteen eighty, Weyerhaeuser entered the Pacific Northwest market. And from nineteen ninety to two thousand, it invested millions of dollars into its operations. Due to the investments and increased production technology, Weyerhaeuser’s demand for logs increased. By two thousand one, Weyerhaeuser was purchasing approximately sixty-five percent of the region’s logs.

Ross-Simmons Hardwood Lumber Company operated a mill in Washington and was one of Weyerhaeuser’s competitors in the bidding market for hardwood logs.

From nineteen ninety-eight to two thousand one, the cost of logs increased, while the price of the finished product—hardwood lumber—decreased. Due to these divergent trends, Ross-Simmons suffered significant losses. By two thousand one, Ross-Simmons was out of business.

Ross-Simmons brought an antitrust suit against Weyerhaeuser, alleging that Weyerhaeuser had unlawfully engaged in predatory bidding by bidding up the price of logs and forcing Ross-Simmons out of business.

Weyerhaeuser argued that Ross-Simmons hadn’t satisfied the standard set forth in Brooke Group versus Brown and Williamson Tobacco Corporation. Ross-Simmons admitted that the Brooke Group requirements weren’t met. However, the district court rejected Weyerhaeuser’s argument, finding that the Brooke Group standard only applied to predatory-pricing claims and not predatory-bidding claims. The jury found for Ross-Simmons. The Ninth Circuit affirmed. The United States Supreme Court granted cert.

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