Potlatch Corp. has settled its share of a federal class-action lawsuit for $2.7 million over its role in the alleged price-fixing of oriented strand board, a plywood-type product used as floor and roof decking.
The Spokane-based company announced the settlement Thursday as part of its first-quarter earnings statement. The company posted a one-time charge of $2.7 million, or $1.6 million after tax, related to the settlement reached in principle with buyers of the wood product.
The company denied any wrongdoing in resolving its role in the 2006 case.
“Although we vigorously deny any wrongdoing … we tentatively settled the claims of the direct purchaser class, solely in order to avoid the further expense and burden of the ongoing litigation,” the company said in its earnings report.
Potlatch declined to release how much it has spent defending itself in the lawsuit.
Company spokesman Matt Van Vleet said a federal judge must still sign off on the settlement deal.
The lawsuit was filed in the Eastern U.S. District Court in Pennsylvania by buyers of the product against several producers of oriented strand board, including Louisiana-Pacific Corp., Weyerhaeuser Co. and Georgia-Pacific Corp.
The lawsuit accused Potlatch and others of conspiring to reduce the supply of oriented strand board as a way to justify raising the price throughout the United States from June 2002 to April 2006, according to documents filed in the case. Potlatch officials denied the allegations and claimed market conditions were responsible for driving prices higher during that time.
Oriented strand board helped Potlatch overcome a three-year revenue slump that ended in 2002 with the company’s worst financial performance. In 2004, the company sold its oriented strand board operations in Minnesota, reaping $457 million and reducing its debt load at a time wood building products were fetching record high prices.
Oriented strand board is a structural panel made of strands, flakes or wafers sliced from small-diameter wood logs and bonded together with adhesive. It serves the same functions as plywood, but it is often less expensive than plywood because it is made from parts of trees too small for plywood.
Georgia-Pacific and two other defendants, Ainsworth Lumber Co. and Huber Engineered Woods LLC, have also reached settlements in the case.