Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc.
Ross-Simmons sued Weyerhaeuser for monopolization and attempted monopolization under Section 2 of the Sherman Antitrust Act. Ross-Simmons complained that Weyerhaeuser bought more logs than necessary at higher prices than were necessary to drive other companies out of the lumber industry.
The district court instructed the jury that overpaying for logs can be considered an anticompetitive act, one of the requirements for a claim under Section 2 of the Sherman Act. The jury found for Ross-Simmons and awarded it $78,769,218 in damages.
Weyerhaeuser appealed to the United States Court of Appeals for the Ninth Circuit, arguing that the rule in the Supreme Court case Brooke Group should apply. This rule would require Ross-Simmons to prove that the Weyerhaeuser was operating at a loss and dangerously likely to recoup that loss. Weyerhaeuser wanted judgment as a matter of law, or alternatively, a new trial. The court of appeals affirmed the district court's ruling, holding that Brooke Group only applies to sell-side monopolies, not buy-side ones. The court reasoned that sell-side monopolies lead to lower prices for consumers and competition would eventually resume, but that buy-side monopolies likely lead to higher prices overall and are much more harmful to consumers.
Question Presented:
The question in this case is whether a plaintiff alleging predatory buying may, as the Ninth Circuit held, establish liability by persuading a jury that the defendant purchased more inputs "than it needed" or paid a higher price for those inputs "than necessary," so as "to prevent the Plaintiffs from obtaining the [inputs] they needed at a fair price"; or whether the plaintiff instead must satisfy what the Ninth Circuit termed the "higher" Brooke Group standard by showing that the defendant (1) paid so much for raw materials that the price at which it sold its products did not cover its costs and (2) had a dangerous probability of recouping its losses.
