Ga. Pac. Corp. v. Cook Timber Co.
Decision Date | 03 March 2016 |
Docket Number | NO. 2013-CA-01869-SCT,2013-CA-01869-SCT |
Parties | GEORGIA PACIFIC CORPORATION v. COOK TIMBER COMPANY, INC. |
Court | Mississippi Supreme Court |
EN BANC.
¶1. Cook Timber Company sued Georgia Pacific Corporation, claiming breach of contract and antitrust violations, both unilaterally and through a conspiracy with other market participants.1 The circuit judge granted Georgia Pacific a directed verdict on Cook Timber's conspiracy and breach-of-contract claims, but the jury returned a verdict for Cook Timber on its unilateral antitrust claim. Because Cook Timber failed to present sufficient evidence to support its unilateral antitrust claims, we reverse the jury's verdict on that claim. We also affirm the circuit judge's decision to grant Georgia Pacific a directed verdict on the conspiracy claim. But we reverse the directed verdict on Cook Timber's breach-of-contract claim, and we remand for a new trial on that claim.
¶2. Cook Timber, a logging company based in Bay Springs, Mississippi, has been in operation since 1983. Georgia Pacific is a national wood-processing company with several facilities in Mississippi. In southeast Mississippi, Georgia Pacific operated the Leaf River Group. This group consisted of five mills, including the Taylorsville Plywood Plant, Taylorsville Chip Mill, Bay Springs Sawmill, New Augusta Sawmill, and the Leaf River Pulp Mill.
¶3. In 1983, Cook Timber entered into a contract with Georgia Pacific, and from then until 2000, Cook Timber worked exclusively with Georgia Pacific. Eighty to ninety percent of Cook Timber's wood was hauled to the Taylorsville Plywood Plant and Bay Springs Sawmill. The remainder was hauled to the Leaf River Pulp Mill. In March 2000, GeorgiaPacific notified Cook Timber by letter that its Leaf River Pulp Mill no longer would receive any pine pulpwood deliveries from Cook Timber. Cook Timber then filed this suit.
¶4. After the circuit judge granted a directed verdict on Cook Timber's breach-of-contract and conspiracy claims, the jury returned a verdict for both actual and punitive damages against Georgia Pacific. Georgia Pacific appealed, arguing that the circuit court had erred by admitting the testimony of Cook Timber's expert witness, Dr. William Shughart; that Cook Timber had presented insufficient evidence to prove its unilateral antitrust claim; that the circuit court had improperly instructed the jury on the elements of Cook Timber's unilateral antitrust claim; and that the circuit court had erred by permitting the jury to consider punitive damages for the antitrust violation. Cook Timber cross-appealed the directed verdicts on its breach-of-contract and conspiracy claims.
¶5. We find that Cook Timber failed to prove that Georgia Pacific committed unilateral antitrust violations. We also affirm the circuit court's directed verdict on the conspiracy claim. But we find that Cook Timber presented sufficient evidence to survive a directed verdict on its breach-of-contract claim, and we reverse and remand for a new trial on that claim.
¶6. Cook Timber's three claims center on Georgia Pacific's efforts to cut the cost it pays timber suppliers for wood. Each claim rests on a distinct legal theory. The circuit judgeallowed the jury to consider only one of the three legal theories. That claim was brought under Mississippi Code Section 75-21-3.
¶7. There is an important difference between Cook Timber's claim under Mississippi Code Section 75-21-3—on which the jury based its verdict—and Mississippi Code Section 75-21-1—on which the circuit judge granted a directed verdict. Both statutes provide what can be characterized broadly as antitrust regulations. Section 75-21-1, which regulates actions by trusts or combines, states:
A trust or combine is a combination, contract, understanding or agreement, expressed or implied, between two or more persons, corporations or firms or association of persons or between any one or more of either with one or more of the others [when used to engage in certain prohibited business practices.]2
¶8. Section 75-21-3, on the other hand, regulates the conduct of "[a]ny corporation, domestic or foreign, or individual, partnership, or association of persons whatsoever, who, with intent to accomplish the results herein prohibited or without such intent, shall" engage in certain prohibited business practices.3 In other words, Section 75-21-1 prohibits agreements between market participants to engage in the prohibited practices, while Section 75-21-3 prohibits unilateral action by a market participant to engage in the prohibited practices.
¶9. With regard to Section 75-21-3, on which the jury based its verdict, Cook Timber failed to present sufficient evidence. That section states:
¶10. Cook Timber's case essentially boiled down to five pieces of evidence: (1) references to Georgia Pacific's "Project Hawker" price-reduction effort, (2) Georgia Pacific's decision to purchase timber only from suppliers who provided the most consistent prices, (3) Georgia Pacific's decision to stockpile its timber inventory so it could refuse to purchase timber when prices were too high, (4) Georgia Pacific's decision to publish the prices it paid for timber, and (5) Georgia Pacific's contractual right to cull wood not meeting its quality specifications. This evidence, even when viewed in the light most favorable to the verdict, does not support it.
¶11. Conduct that violates Section 75-21-3 must fall under at least one of subsections (a) through (e).5 Clearly, subsections (d) and (e) are inapplicable because both address differential pricing between localities in the state, and Cook Timber does not allege that Georgia Pacific engaged in this practice.6
¶12. Subsection (b) prohibits a market participant from "monopoliz[ing] or attempt[ing] to monopolize the production, control or sale of any commodity, or the prosecution, management or control of any kind, class or description of business."7 Monopoly is defined as 8 No evidence supports a conclusion that Georgia Pacific monopolized or attempted to monopolize its industry. In fact, this case does not involve claims about Georgia Pacific's industry itself, but rather from whom it decided to purchase raw material. And the existence of competitors forms the basis of some of Cook Timber's claims.
¶13. This leaves subsections (a) and (c). Subsection (a) prohibits a business from "[r]estrain[ing] or attempt[ing] to restrain the freedom of trade or production."9 With regard to the restraint-of-trade provision, this Court has said that "our anti-trust statute was only intended to embrace within its provisions those contracts in restraint of trade which were invalid as against public policy before the enactment of said statute."10 No authority supports the view that, before this statute's adoption, businesses were prohibited from seeking to purchase material for the lowest possible cost. Also, it must be alleged "that the sales there involved as constituting a violation of a provision of the anti-trust statute were made for the purpose of...
To continue reading
Request your trial