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

In Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., the underlying dispute arose when Ross-Simmons, a sawmill operating in Longview, Washington, accused Weyerhaeuser of engaging in predatory bidding practices that ultimately drove Ross-Simmons out of business. Ross-Simmons claimed that Weyerhaeuser, which had significantly expanded its operations in the Pacific Northwest and controlled approximately 65 percent of the market for alder sawlogs, artificially inflated the prices of these logs. This increase in input costs, coupled with a decline in the prices of finished hardwood lumber, severely impacted Ross-Simmons's profit margins, leading to substantial financial losses and the eventual shutdown of its mill in May 2001. The procedural history of the case began with Ross-Simmons filing an antitrust lawsuit against Weyerhaeuser, alleging monopolization and attempted monopolization under Section 2 of the Sherman Act. A jury found in favor of Ross-Simmons, and the Ninth Circuit Court of Appeals affirmed the verdict. Weyerhaeuser subsequently sought certiorari from the Supreme Court to address whether the legal standards for predatory pricing established in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. should also apply to claims of predatory bidding. The case is situated within the context of the hardwood-lumber market in the Pacific Northwest, where sawmills acquire logs through various means, including open bidding. Weyerhaeuser had made substantial investments in its hardwood operations, enhancing its production capabilities and technological efficiency, while Ross-Simmons reportedly did not engage in similar efficiency-enhancing investments. The competitive dynamics of the market, particularly the rising costs of alder sawlogs and the declining prices for finished lumber, created a challenging environment for smaller mills like Ross-Simmons, which ultimately contributed to its financial difficulties and closure.

Whether the test applied to claims of predatory pricing in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. also applies to claims of predatory bidding under the Sherman Act.

The judgment is reversed.