Supreme Court Establishes New Buying Practices Standards With 'Weyerhaeuser'

Since the 2003-2004 term, the U.S. Supreme Court has heard a surprising number of antitrust cases — nine in all — reflecting its increasing interest in, and willingness to address, questions that significantly impact the business community. Equally remarkable is the array of issues the Court has addressed in these cases. In the past three years, the Court has heard cases concerning issues ranging from a unilateral refusal to deal with rivals (Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, 540 U.S. 398 (2004)), to pricing decisions by joint ventures (Texaco, Inc. v. Dagher, 547 U.S. 1 (2006)), to claims of tying involving a patented product (Illinois Tool Works, Inc. v. Independent Ink, Inc., 547 U.S. 28 (2006)).

One of the four antitrust cases heard by the Court this term, which resulted in a unanimous opinion, is Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 127 S. Ct. 1069 (2007). Weyerhaeuser concerns conduct known as “predatory bidding” — deliberately bidding up the price of inputs to prevent competitors from procuring sufficient supplies to manufacture finished products. The Court’s decision holds that the same stringent standard used to judge the lawfulness of predatory pricing must be applied to claims of predatory bidding as well.