A federal judge dismissed today the plywood-related parts of a complaint by Bailey Lumber & Supply Co. and by 84 Lumber Co. alleging that Georgia-Pacific Corp., Weyerhaeuser Co. and Louisiana-Pacific Corp. had entered into a conspiracy to fix plywood as well as OSB prices earlier this decade. U.S. District Judge Louis Guirola Jr. made a similar move last week in dismissing the complaint against BlueLinx Corp.
However, Guirola also said Bailey and 84 could file an amended complaint that clarifies the allegations he dismissed, so the case could continue.
The legal action in the U.S. District Court for the Southern District of Mississippi is a sidebar case to the nationwide class action suit filed in 2006 in federal court in Pennsylvania in which a number of OSB producers--including the ones named here--were accused of fixing OSB prices. Bailey and 84 had opted out of that suit.
Specifically, Guirola dismissed three claims against the lumber producers: antitrust conspiracy claims based on plywood purchases; damage claims resulting from plywood purchases made before November 2004 (i.e., before the four-year statute of limitations typically would have run out); and Bailey's claims for damages based on indirect purchases made through Lumbermens Merchandising Corp.
While Bailey and 84 had argued that plywood and OSB should be considered together in the suit as a "structural panels" market, Guirola sided with the manufacturers in concluding that plywood and OSB are two separate markets. "They have separate, dedicated mills or plants, are used in similar, but separate ways, and each defendant has different market shares for OSB and plywood," Guirola noted.
As for the statute of limitations issue, Guirola said Bailey and 84 had to show it was hurt by the plywood producers based on some act committed on or after Nov. 12, 2004, four years before the suit was filed. He noted the defendants' claims that the alleged plywood conspiracy began in the 1990s when dramatic increases in OSB capacity led to a fall in prices for OSB and plywood. Prices didn't turn around, he wrote, until 1999, when Weyerhaeuser and the others began to reduce capacity in part by acquiring mills from competitors.
But Guirola also noted that Louisiana Pacific wasn't alleged to have any share of the plywood market, while Weyerhauser and Georgia-Pacific together have just a 40% market share--too small, in Guirola's opinion, for them to control supply and thus control prices. He also said he found a "complete absence of allegations regarding Weyerhaeuser's involving in thie conspiracy."
Guirola concluded this section by dismissing the complaint as written, but he said Bailey and 84 could amend their complaint "to include allegations specific to each defendant, alleging that defendant's role in the alleged plywood conspiracy."