Wednesday, September 24, 2003

Antitrust News: Paper Money

Weyerhaeuser, International Paper, and Georgia-Pacific settled a class action lawsuit brought by disgruntled consumers of cardboard. Weyerhaeuser, which is currently fighinting a multi-million dollar verdict in another antitrust suit brought by its competitors, will take a $15 million charge to cover its share of the settlement. Weyerhaeuser's general counsel maintains that the settled class action case was "without merit," but that it was "in the interests of our shareholders given the complexity, time and cost of litigation, and uncertainty of court proceedings."

Given that Weyerhaeuser is vigorously fighting one antitrust judgment, it's not necessarily unreasonable that they've chosen not to fight on a second front. But at the same time, anytime a business settles a lawsuit they believe to be "without merit," it is inevitable that future meritless litigation will follow, especially when it involves the inherently subjective antitrust laws. It would also be interesting to learn whether Weyerhaeuser initiated the settlement talks, or whether they were cornered into it by one or both of their co-defendants.

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