L-P Has Thick File Of Legal Trouble
It’s been a terrible year for Louisiana-Pacific Corp.
In June, a federal grand jury in Colorado indicted the company on 56 charges of everything from tampering with pollution control equipment to lying about emissions, and mail and wire fraud. Each count carries a maximum fine of $500,000.
Two former company employees of the Montrose, Colo., oriented strand board plant also face charges. In late July, the board of directors fired Chief Executive Officer Harry Merlo and two other top executives, in part because of a dozen class-action and shareholder lawsuits over its Inner-Seal siding. One of those executives is James Eisses, who was based in Hayden Lake as L-P’s northern division manager.
Because of his expertise, however, Eisses now works for the company as a consultant on oriented strand board plants being built in the United States, Canada and Ireland, L-P says.
The company has set aside $200 million to pay anticipated claims over its siding. But it blames its problems on poor siding installation and a society too eager to sue.
One of the larger siding manufacturers, L-P has a reputation for doing other things in a big way. In 1992, for example, a federal appeals court upheld a $3.7 million fine against the company for monopolistic practices. It was the largest civil penalty the Federal Trade Commission has ever successfully levied.
L-P blames the penalty on a poor wood-products market. That made it impossible to divest itself of a fiberboard plant, which the FTC had ordered a decade earlier.
In 1993, L-P again made regulatory history by incurring an $11.1 million fine from the Environmental Protection Agency for violations of the Clean Air Act across the country and at Chilco. The alleged violations included charges of excessive emissions and failing to tell state and federal officials about certain types of pollution.
L-P says it was a procedural issue, not a pollution issue. It agreed to install new pollution control equipment at Chilco and other plants as part of the settlement and touted it as an effort to pioneer pollution control for the industry.
Still, some plants went 10 years without proper pollution controls, said Ron Rutherford, chief of EPA’s air enforcement division in Denver, where the national case originated. Money was likely the incentive.
After years of battling the company, he’s not satisfied that L-P has completely changed its ways. “You can’t go through that, see what they’ve done, and believe overnight they’ve seen the light,” Rutherford said.
“You are dealing with an industry that, like the railroad, kind of ran the West.”
, DataTimes