WY » Topics » LEGAL PROCEEDINGS

These excerpts taken from the WY 10-Q filed May 8, 2009.

LEGAL PROCEEDINGS

Major legal proceedings involving us described in this section are:

 

 

hardboard siding claims and

 

 

alder antitrust litigation.

We also are a party to other legal matters generally incidental to our business.

 

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Table of Contents

The ultimate outcome of any legal proceeding:

 

 

is subject to a great many variables and

 

 

cannot be predicted with any degree of certainty.

However, whenever probable losses from litigation could reasonably be determined – we believe that we have established adequate reserves. In addition, we believe the ultimate outcome of the legal proceedings:

 

 

could have a material adverse effect on our results of operations, cash flows or financial position in any given quarter or year; but

 

 

will not have a material adverse effect on our long-term results of operations, cash flows or financial position.

LEGAL PROCEEDINGS

Refer to “Notes to Consolidated Financial Statements – Note 13: Legal Proceedings, Commitments and Contingencies.”

These excerpts taken from the WY 10-K filed Feb 27, 2009.

LEGAL PROCEEDINGS

See Note 16: Legal Proceedings, Commitments and Contingencies in the Notes to Consolidated Financial Statements for a summary of legal proceedings.

LEGAL PROCEEDINGS

Major legal proceedings involving us described in this section are:

 

 

hardboard siding claims,

 

alder antitrust litigation and

 

OSB antitrust litigation.

We are also a party to other legal matters generally incidental to our business.

The ultimate outcome of any legal proceeding:

 

 

is subject to a great many variables and

 

cannot be predicted with any degree of certainty.

However, whenever probable losses from litigation could reasonably be determined – we believe that we have established adequate reserves. In addition, we believe the ultimate outcome of the legal proceedings:

 

 

could have a material adverse effect on our results of operations, cash flows or financial position in any given quarter or year; but

 

will not have a material adverse effect on our long-term results of operations, cash flows or financial position.

This excerpt taken from the WY 10-Q filed Nov 7, 2008.

LEGAL PROCEEDINGS

Refer to Note 16: Legal Proceedings, Commitments and Contingencies of the Notes to Consolidated Financial Statements of this report.

This excerpt taken from the WY 10-Q filed Aug 8, 2008.

LEGAL PROCEEDINGS

Refer to Note 14 of the Notes to Consolidated Financial Statements of this report.

This excerpt taken from the WY 10-Q filed May 9, 2008.

LEGAL PROCEEDINGS

Refer to Note 11 of the Notes to Consolidated Financial Statements of this report.

This excerpt taken from the WY 10-K filed Feb 28, 2008.

LEGAL PROCEEDINGS

Major legal proceedings involving us described in this section are:

 

 

hardboard siding claims;

 

alder antitrust litigation;

 

OSB antitrust litigation; and

 

Paragon Trade Brands, Inc. litigation.

We are also a party to other legal matters generally incidental to our business.

The ultimate outcome of any legal proceeding:

 

 

is subject to a great many variables; and

 

cannot be predicted with any degree of certainty.

However, whenever probable losses from litigation could reasonably be determined – we believe that we have established adequate reserves. In addition, we believe the ultimate outcome of the legal proceedings:

 

 

could have a material adverse effect on our results of operations, cash flows or financial position in any given quarter or year; but

 

will not have a material adverse effect on our long-term results of operations, cash flows or financial position.

This excerpt taken from the WY 10-Q filed Nov 9, 2007.

LEGAL PROCEEDINGS

Refer to Note 11 of the Notes to Consolidated Financial Statements of this report.

This excerpt taken from the WY 10-Q filed Aug 9, 2007.

LEGAL PROCEEDINGS

Refer to Note 11 of the Notes to Consolidated Financial Statements of this report.

This excerpt taken from the WY 10-Q filed May 10, 2007.

LEGAL PROCEEDINGS

Refer to Note 10 of the Notes to Consolidated Financial Statements of this report.

This excerpt taken from the WY 10-Q filed Nov 3, 2006.

ITEM 1. LEGAL PROCEEDINGS

See discussion in Note 14 of the Notes to Consolidated Financial Statements in Item 1, “Financial Statements” of this report.

This excerpt taken from the WY 10-Q filed May 4, 2006.

Legal Proceedings

Hardboard Siding Claims. In June 2000, the company entered into a nationwide settlement of hardboard siding class action cases and recognized a charge of $130 million before taxes to cover the estimated cost of the settlement and related claims. The settlement class consists of all persons who own or owned structures in the United States on which the company’s hardboard siding had been installed from January 1, 1981 through December 31, 1999. This is a claims-based settlement, which means the claims will be paid as submitted over a nine-year period. An independent adjuster reviews claims submitted and determines payment under the terms of the settlement agreement. Reserves for future claims settlements relating to hardboard siding cases require judgments regarding projections of future claims rates and amounts. At the end of the first quarter of 2006, the company had approximately $51 million in reserves remaining for hardboard siding claims. The company believes the reserve balances established for these matters are adequate, but is unable to estimate at this time the amount of additional charges, if any, that may be required for these matters in the future.

The following table presents an analysis of the claims activity related to the hardboard siding class action cases:

 

     Thirteen
weeks ended
   Fifty-two
week periods

Dollar amounts in millions

   March 26,
2006
   2005    2004

Number of claims filed during the period

     220      765      1,740

Number of claims resolved

     440      640      2,990

Number of claims unresolved at end of period

     485      705      580

Number of damage awards paid

     110      270      1,140

Average damage award paid

   $ 5,800    $ 4,100    $ 2,790

The lower average damage award paid in 2004 was due primarily to a lower number of awards for multi-family structures in 2004 than in 2005 or 2006.

The company has received $52 million in recoveries from its insurance carriers by way of negotiated settlements.

The company currently has no litigation pending with any person or entity that has opted out of the settlement. Individuals and entities that have opted out of the settlement may file lawsuits against the company in the future.

Linerboard Antitrust Litigation. In May 1999, two civil antitrust lawsuits were filed against the company in U.S. District Court, Eastern District of Pennsylvania. Both suits named as defendants several other major containerboard and packaging producers. The complaint in the first case alleged the defendants conspired to fix the price of linerboard and that the alleged conspiracy had the effect of increasing the price of corrugated containers. The suit requested class certification for purchasers of corrugated containers during the period from October 1993 through November 1995. The complaint in the second case alleged that the company conspired to manipulate the price of linerboard and thereby the price of corrugated sheets. The suit requested class certification for purchasers of corrugated sheets during the period from October 1993 through November 1995.

The company settled the two lawsuits and a pretax charge of $23 million was recognized in the third quarter of 2003. Approximately 165 members of the classes opted out of the class and filed thirteen lawsuits against the company and other

 

14


producers. The company settled three of the lawsuits and recognized a pretax charge of $12 million in the first quarter of 2005. The company settled all but one of the remaining opt-out cases and recognized a pretax charge of $38 million in the fourth quarter of 2005. The company believes that the charges recognized for these matters are adequate, and expects the amount of additional charges, if any, that may be required for the sole remaining opt-out case to be inconsequential.

In March 2004, La Cie McCormick Canada Company filed a class action lawsuit in Superior Court of Justice, in Ontario, Canada against the company and other linerboard manufacturers on behalf of all Canadians who purchased corrugated products, including sheets and containers and/or linerboard, during the period of time from 1993 to at least the end of 1995. The allegations mirrored the allegations in the U.S. cases. In February 2006, the parties reached an agreement to settle the lawsuit for an immaterial amount.

Alder Antitrust Litigation. In December 2000, a lawsuit was filed against the company in U.S. District Court in Oregon (the Initial Alder Case) alleging from 1996 to the present the company had monopoly power or attempted to gain monopoly power in the Pacific Northwest market for alder logs and finished alder lumber. A jury verdict of trebled damages of $79 million was appealed to the U.S. Court of Appeals for the Ninth Circuit where the decision was upheld. In September 2005, the company asked for discretionary review of the Initial Alder Case by the U.S. Supreme Court. In November 2005, the U.S. Supreme Court asked the Solicitor General to express the opinions of the United States on whether to accept review.

In January 2005, the company received a copy of a “complaint in equity” filed in U.S. District Court in Oregon to set aside the judgment in the Initial Alder Case on behalf of a plaintiff who did not prevail in the trial. It alleged a fraud was committed on the court and requested judgment against the plaintiff be vacated and a new trial set on plaintiff’s claim of monopolization of the alder sawlog market. Trebled damages of $20 million are alleged. The U.S. District Court stayed this matter until the U.S. Supreme Court takes final action in the Initial Alder Case. The company denies the allegations in the complaint and intends to vigorously defend the matter.

In June 2003, Washington Alder filed an antitrust lawsuit against the company in U.S. District Court in Oregon alleging monopolization of the alder log and lumber markets and seeking trebled damages of $36 million and divestiture of the company’s Northwest Hardwoods Division and alder sawmills in Oregon, Washington and British Columbia. A jury verdict of trebled damages of $16 million was appealed to the U.S. Court of Appeals for the Ninth Circuit. After oral argument in November 2005, the matter was stayed pending a final disposition by the U.S. Supreme Court of the Initial Alder Case.

In 2004 the company settled similar lawsuits filed against the company by five hardwood mill owners in the U.S. District Court in Oregon.

In April 2004, a civil class action antitrust lawsuit was filed against the company in U.S. District Court in Oregon claiming that as a result of the company’s alleged monopolization of the alder sawlog market in the Pacific Northwest as determined in the Initial Alder Case, the company monopolized the market for finished alder and charged monopoly prices for finished alder lumber. In December 2004, the Judge issued an order certifying the plaintiff as a class representative for all U.S. purchasers of finished alder lumber between April 28, 2000, and March 31, 2004, for purposes of awarding monetary damages. The company denies the allegations in the complaint and intends to vigorously defend the matter. In February 2005, class counsel notified the court that approximately 5 percent of the class members opted out of the class action lawsuit. The company has no litigation pending with any entity that has opted out of the class, but it is possible that entities who have opted out may file lawsuits against the company in the future. The case was stayed in the fourth quarter of 2005 pending the U.S. Supreme Court entering a final opinion in the Initial Alder Case.

As of March 26, 2006 and December 25, 2005 the company has reserves accrued in the amount of $95 million. While the company believes the reserve established for the alder antitrust litigation is adequate, the company is unable to estimate what additional charges, if any, may be required in the future, because of the uncertainties surrounding the litigation process.

OSB Antitrust Litigation. In February and March 2006, seven lawsuits were filed in U.S. District Court in Pennsylvania seeking class action status for persons and entities who purchased oriented strand board (OSB) directly from Weyerhaeuser, Louisiana-Pacific, Georgia-Pacific, Potlatch, Ainsworth Lumber, Norbord and J.M. Huber Corp. between June 2002 through the present. These lawsuits were subsequently consolidated. The consolidated lawsuit alleges that the defendants conspired to fix and raise OSB prices in the United States during the class period and as a result, class members paid artificially inflated prices for OSB during that period. Four lawsuits have also been filed in the same court on behalf of “indirect purchasers” of OSB in different states that have laws permitting such actions on behalf of indirect purchasers. No specific damage amounts have been claimed. The company has not established a reserve for this matter and is unable to estimate at this time the amount of charges, if any, that may be required in the future.

 

15


Paragon Trade Brands, Inc. LitigationIn 1999, the Equity Committee (Committee) in the Paragon Trade Brands, Inc. (Paragon), bankruptcy proceeding commenced an adversary proceeding against the company in U.S. Bankruptcy Court for the Northern District of Georgia asserting the company breached certain warranties in agreements between Paragon and the company connected with Paragon’s public offering of common stock in February 1993. The Committee sought to recover damages sustained by Paragon in two patent infringement cases, one brought by Procter & Gamble and the other by Kimberly-Clark. In June 2002, the Bankruptcy Court held the company liable for breaches of warranty. In the second quarter of 2005, the Bankruptcy Court imposed damages of approximately $470 million. The company appealed the liability and damages determinations to the U.S. District Court for the Northern District of Georgia and posted a bond of $500 million. Oral argument on the company’s appeal was heard on April 12, 2006. The company has not established a reserve for this matter because, based upon the information currently available to the company, including management’s belief that an adverse result is not probable because the company will prevail on appeal, management believes the requirements of Statement of Financial Accounting Standards No. 5, Accounting for Contingencies (Statement 5), for establishing a reserve in this matter have not been met. However, there is no guarantee that management will not determine in the future that a charge for all or a portion of any damage award is required. Any such charge could materially and adversely affect the company’s results of operations for the quarter or the year in which such a charge may be recognized.

Other Litigation. The company is party to other matters generally incidental to its business in addition to the matters described above.

SummaryAlthough the final outcome of any legal proceeding is subject to a great many variables and cannot be predicted with any degree of certainty, management currently believes that adequate reserves have been established for probable losses from litigation when the amounts could be reasonably determined. Management further believes that the ultimate outcome of these legal proceedings could materially adversely affect results of operations, cash flows or financial condition in any given quarter or year, but will not have a material adverse effect on the company’s long-term results of operations, cash flows or financial position.

This excerpt taken from the WY 10-K filed Feb 22, 2006.

LEGAL PROCEEDINGS

 

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 15 of Notes to Consolidated Financial Statements in “Financial Statements and Supplementary Data” below for a summary of legal proceedings.

 

This excerpt taken from the WY 10-Q filed Nov 4, 2005.

Item 1. Legal Proceedings

 

See discussion in Note 13 of Notes to Consolidated Financial Statements.

 

Item 2. Unregistered Sale of Equity Securities and Use Of Proceeds    not applicable
Item 3. Defaults Upon Senior Securities    not applicable
Item 4. Submission of Matters to a Vote of Security Holders    not applicable
Item 5. Other Information     

 

Natural Resource and Environmental Matters

 

On May 30, 2005, the company sold almost all of its forest licenses and privately held timberland in western British Columbia (B.C.) to Brascan Corporation of Toronto, Canada. The transaction included 258,000 hectares (635,000 acres) of private timberlands and the annual harvesting rights to 3.6 million cubic meters of timber that is subject to public timber leases. The sale also included five softwood sawmills, with a combined annual production of 690 million board feet, and two remanufacturing facilities. Weyerhaeuser maintains a significant presence in Canada and British Columbia following the sale, and will continue to employ about 7,000 Canadian employees. As a result of the sale, Brascan assumed responsibility with respect to an objection brought by the Lyackson First Nation to a proposed subdivision by the company of privately owned lands on Valdes Island in B.C on the basis that the Lyackson First Nations’ aboriginal interests had not been sufficiently addressed. Also as a result of the sale, Brascan assumed responsibility with respect to a petition by the Hupacasath First Nation for a declaration that the province had failed to meaningfully consult with them before deciding to remove private lands formerly owned by the company from a company Tree Farm License, and that they have aboriginal interests in these lands.

 

This excerpt taken from the WY 10-Q filed Aug 4, 2005.

Item 1. Legal Proceedings

 

See discussion in Note 13 of Notes to Consolidated Financial Statements.

 

Item 2. Unregistered Sale of Equity Securities and Use Of Proceeds    not applicable
Item 3. Defaults upon Senior Securities    not applicable

 

This excerpt taken from the WY 10-Q filed May 5, 2005.

Legal Proceedings

 

Hardboard Siding Claims The company announced in June 2000 it had entered into a proposed nationwide settlement of its hardboard siding class action cases and, as a result, took a charge of $130 million before taxes to cover the estimated cost of the settlement and related claims. The settlement was approved in December 2000, and is binding on all parties. In the third quarter of 2001, the company reassessed the adequacy of the reserve and increased the reserve by an additional $43 million. In the third quarter of 2004, an adjustment was made to reduce the reserve by $20 million based upon a review of the activities and trends over the preceding four years. At the end of the first quarter of 2005, the company had approximately $55 million in reserves remaining for hardboard siding claims. While the company believes that the reserve balances established for these matters are adequate, the company is unable to estimate at this time the amount of additional charges, if any, that may be required for these matters in the future.

 

The settlement class consists of all persons who own or owned structures in the United States on which the company’s hardboard siding had been installed from January 1, 1981, through December 31, 1999. This is a claims-based settlement, which means that the claims will be paid as submitted over a nine-year period. An independent adjuster will review each claim submitted and determine whether it qualifies for payment under the terms of the settlement agreement.

 

The following table presents an analysis of the claims activity related to the hardboard siding class action cases:

 

    

Thirteen
weeks ended

March 27,
2005


   Fifty-two weeks ended

       

Dec. 26,

2004


  

Dec. 28,

2003


Number of claims filed during the period

     160      1,740      3,830

Number of claims resolved

     105      2,990      4,245

Number of claims unresolved at end of period

     635      580      1,830

Number of damage awards paid

     40      1,140      1,770

Average damage award paid

   $ 2,790    $ 2,790    $ 3,400

 

The higher average damage award paid in 2003 was due primarily to a greater number of awards for multi-family structures and fewer awards for single-family residences in 2003 than in 2004 or 2005. The deadline for filing claims arising from hardboard siding installed between 1981 and 1987 occurred in December 2003.

 

The company has received $52 million in recoveries from its insurance carriers by way of negotiated settlements.

 

The company currently has no litigation pending with any person or entity that has opted out of the settlement. Individuals and entities that have opted out of the settlement may file lawsuits against the company in the future.

 

Antitrust Litigation In May 1999, two civil antitrust lawsuits were filed against the company in U.S. District Court, Eastern District of Pennsylvania. Both suits named as defendants several other major containerboard and packaging producers. The complaint in the first case alleged the defendants conspired to fix the price of linerboard and that the alleged conspiracy had the effect of increasing the price of corrugated containers. The suit requested class certification for purchasers of corrugated containers during the period from October 1993 through November 1995. The complaint in the second case alleged that the company conspired to manipulate the price of linerboard and thereby the price of corrugated sheets. The suit requested class certification for purchasers of corrugated sheets during the period from October 1993 through November 1995. In September 2001, the district court certified both classes. In September 2003, the company, Georgia-Pacific and International Paper requested preliminary approval of a $68 million settlement of the class action litigation. The company recognized a pretax charge of $23 million in the third quarter of 2003, representing the company’s portion of the settlement. Final approval of the settlement occurred in December 2003. Approximately 165 members of the classes opted out of the class and filed thirteen lawsuits against the company and other producers. In the fourth quarter of 2004, Weyerhaeuser settled one of the opt-out claims for $165 thousand. In April 2005, the company settled a second opt-out claim and recognized a pretax charge of $12 million in the first quarter of 2005. It was the only opt-out lawsuit set for trial. In most of the cases the plaintiffs are seeking both state and federal antitrust remedies. It is possible that additional class members that opted out may file lawsuits against the company in the future. The company has not recorded a reserve for the remaining opt-out cases and is unable to estimate at this time the amount of charges, if any, that may be required for this matter in the future.


Table of Contents

Weyerhaeuser Company

This excerpt taken from the WY 10-K filed Mar 3, 2005.

LEGAL PROCEEDINGS

 

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 14 of Notes to Financial Statements in “Financial Statements and Supplementary Data” below for a summary of legal proceedings.

 

 

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