On
February 20, 2007, the U.S. Supreme Court issued its opinion in the alder
antitrust litigation brought by Ross-Simmons Hardwood Lumber Co. against
Weyerhaeuser Company. The Supreme Court vacated the $79 million antitrust
award
against Weyerhaeuser Company in a 9-0 ruling and remanded the case to the
U.S.
Ninth Circuit Court of Appeals for further proceedings. The Supreme Court
held
that because Ross-Simmons had conceded that it had not satisfied the standard
established by the Supreme Court, the claim on which the jury award of
damages
was based could not be supported.
An
additional antitrust case by Washington Alder based on the same theory
of
liability resulted in a jury verdict of $16 million, which Weyerhaeuser
Company
had appealed to the U.S. Ninth Circuit Court of Appeals. That case was
stayed
pending the U.S. Supreme Court decision in the Ross-Simmons case. Because
the
jury award in the Washington Alder case was based upon the findings in
the
Ross-Simmons case, the Supreme Court decision in the Ross-Simmons case
will
require the Ninth Circuit to reverse the verdict in the Washington Alder
case.
Weyerhaeuser
Company’s accountants
and attorneys have evaluated the implications of the Supreme Court decision
that
overturned the verdict in the Ross-Simmons case. Because it is no longer
probable that any portion of the $95 million damage awards ($79 million
for
Ross-Simmons and $16 million for Washington Alder) will be paid by Weyerhaeuser
Company, the $95 million of reserves set up in prior years are being reversed
into income for the year ended December 31, 2006.