Weyerhaeuser v. Ross-Simmons: The U.S. Supreme Court Rules That The Brooke Group Predatory-Pricing Test Applies to Predatory Bidding

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David Park, William Rooney, Raymond Sarola, Feb 23, 2007

On February 20, 2007, a unanimous U.S. Supreme Court in Weyerhaeuser Co. v. Ross-Simmons (No. 05-381) held that the Brooke Group predatory-pricing test applies to predatory bidding.

Procedural History After trial, a jury was instructed that it could find the defendant, Weyerhaeuser Co. (“Weyerhaeuser”), liable for monopolistic practices under Section 2 of the U.S. Sherman Act if it concluded that Weyerhaeuser “purchased more logs than it needed, or paid a higher price for logs than necessary, in order to prevent [plaintiff Ross-Simmons] from obtaining the logs they needed at a fair price.” The jury found for the plaintiff. On appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed the judgment and approved the jury instructions, distinguishing predatory bidding from predatory pricing, on the ground that “predatory bidding does not necessarily benefit consumers or stimulate competition in the way that predatory pricing does.” The Supreme Court granted certiorari to “decide whether Brooke Group applies to claims of predatory bidding.”

The U.S. Supreme Court’s Decision The Supreme Court vacated the Ninth Circuit’s opinion and effectively dismissed the lawsuit on the ground that the plaintiff had conceded that it failed to produce evidence sufficient to meet the Brooke Group standard for l