Oregon forest coalition fights to revive logging antitrust lawsuit
Monique Merrill
PORTLAND, Ore. (CN) — The question of whether two logging companies conspired to monopolize markets in an eastern Oregon forest came before a three-judge panel of the Ninth Circuit on Wednesday as a coalition urged the court to revive its antitrust challenge.
U.S. Circuit Judge Milan Smith, a George W. Bush appointee, noted the case was unlike other antitrust suits.
“This is a kind of unique situation,” Smith said. “You got an exclusive government contract — almost all the antitrust cases we deal with involve private parties, and we don’t have that here.”
In 2013, the U.S. Forest Service granted the logging company Iron Triangle a 10-year stewardship contract for the Malheur National Forest, as well as associated logging rights.
A group of landowners, loggers and an eastern Oregon lumber sawmill — known collectively as the Malheur Forest Coalition ��� sued Iron Triangle in 2022, arguing that the company exploited control of the contract and should be blocked from competing for harvest rights in U.S. Forest Service public auctions. The lower court denied the request, prompting a new complaint adding the Malheur Lumber Company as a defendant.
The coalition claimed that Iron Triangle used the stewardship contract to monopolize four forestry sector markets and that the two logging companies conspired to restrain competition.
Specifically, the coalition accused Iron Triangle of forcing Malheur Lumber to refuse logging services from competitors to retain Iron Triangle as its sole source of pine sawlogs. The lower court dismissed the monopolization claim in 2023 and tossed the conspiracy claim in 2024.
Before the Ninth Circuit, the coalition argued the arrangement created a barrier to entry for other logging companies.
“Iron Triangle’s market share was so monstrous at 90% and the tying arrangement itself was a major barrier to entry because it had an extraordinarily pernicious effect on the market, with Malhere Lumber Company, the codefendant, being unwilling to purchase pine saw logs from any other supplier,” said Mike Haglund, Portland-based attorney representing the coalition.
The coalition contends that the company’s dominance stifled competition and harmed rural economies in eastern Oregon.
Smith again pointed out that the federal government awarded the contract and isn’t a party in the suit.
“You’re unhappy, of course, with the Iron Triangle people because you feel that they weren’t sharing as you think they should, but I think we can’t forget the nature of the contractual status of this whole matter,” Smith said, noting that he wasn’t aware of any precedent that allowed a private company to plead such claims with a government buyer.
The coalition also accused Iron Triangle of misrepresenting how it intended to perform the federal stewardship contract, arguing that it secured performance extensions based on a false impression of its logging capacity.
But Iron Triangle’s attorney Timothy Snider argued that the accused misrepresentations “didn’t change competition at all.”
“This court’s been very clear, the allegations that a competitor went to the government, asked for something and got that something from the government is not the basis for an antitrust claim, even if what they got was the product of a false statement,” Snider said.
Further, he argued that the lower court correctly concluded that the coalition had fallen short of backing up the claims it brought under the Sherman Act.
“ They failed to plausibly allege that Iron Triangle possesses monopoly power in any of the four alleged markets,” Snider said. “They failed to plausibly allege facts showing anticompetitive conduct, and each group of plaintiffs failed to plausibly allege an injury to them, an antitrust injury resulting more broadly from an injury to competition.”
Dan Peterson, attorney representing Malheur Lumber Company, argued that the coalition neglected to prove that Iron Triangle and Malheur Lumber’s contract comprised an illegal tying arrangement.
Where the coalition argued that softwood saw logs and logging services are two distinct markets, Malheur Lumber countered that the two are inextricably linked.
“Obtaining saw logs, which is what my client needs, necessarily requires logging trees,” Peterson said.
The coalition argues that the outcome of the case will impact the welfare of two rural Oregon counties that depend on the natural resource-based economy that it says Iron Triangle and Malheur Lumber have suppressed.
The Ninth Circuit panel — which also included Barack Obama-appointed U.S. Circuit Judge Jacqueline Nguyen and U.S. Circuit Judge Holly Thomas, a Joe Biden appointee — did not indicate when it would rule.