May 6, 2016
For many years, Cook Timber Company cut timber various counties in Central Mississippi. A large portion of that wood Cook sold to Georgia-Pacific. In the late 1990’s, the wood market became extremely soft, forcing Georgia-Pacific to cut the prices it would pay to purchase wood from suppliers, including Cook. Eventually, G-P went to a core supplier regime, which did not include Cook at one G-P. Not long after Cook (and a number of other wood cutters and haulers) sued Georgia-Pacific claiming breach of contract and violations of the Mississippi Antitrust Act (MAA).
Eventually the Jasper County Circuit Court granted summary judgment, finding the contract with Cook Timber allowed G-P to terminate it at will. When the case went to trial in 2013, the Circuit Court granted a directed verdict as to the second contract claim, wrongful “dockage,” (i.e. reductions in payments due to timber not meeting specifications). The Court also granted a directed verdict as to Cook Timber’s “conspiracy” claim under the MAA. However, the Court allowed the jury to decide whether G-P was a monopoly buyer (a “monopsonist”) which acted improperly in lowering the price it would pay Cook Timber for its wood.
Ultimately the jury found for Cook Timber on its antitrust claim, awarding it $11,089 in compensatory damages. The jury then awarded punitive damages of $2.5 million, which was 225 times the amount of actual damages.
On appeal, the Mississippi Supreme Court held Cook Timber’s trial evidence, even accepted as true, failed to prove G-P violated the MAA. The Court reversed the jury’s verdict and rendered a judgment in favor of G-P on that clam. Other grounds for reversal urged by G-P, such as Daubert, unconstitutional punitive damage award, etc. were not addressed and deemed moot.
However, the Supreme Court granted Cook Timber’s cross-appeal. A Mississippi statute requires timber processors, like Georgia-Pacific, to make scale tickets available to timber haulers documenting each timber load. In the event of any dockage, that statute required the scale ticket state “the basis and amount of any deductions.” Of the 700 loads docked by G-P over a three year period, Cook Timber introduced into evidence four scale tickets which it said did not follow the statutory requirement. The Supreme Court agreed, holding the absence of this information “raised a rebuttable presumption that Georgia Pacific did not properly dock the wood.” The Court reversed the Circuit Court’s directed verdict, and remanded for a new trial on its dockage claim.
Motions for Rehearing have been filed by both parties. The Mississippi Attorney General’s office has filed an amicus motion for rehearing on the antitrust issues. The Court’s opinion can be found by clicking this link: Georgia-Pacific v. Cook Timber. [UPDATE: Both motions for rehearing were denied on June 30. A new opinion has been substituted for the original, which can be read by clicking here.]
Stephen Burrow and James Heidelberg represented Georgia-Pacific on the appeal.