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Hastings Business Law Journal

Abstract

In Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 127 U.S. 1069 (2007), the Supreme Court addressed the antitrust claim of "predatory bidding"-i.e., that a manufacturer paid too much for an "input." Although the Ninth Circuit allowed predatory-bidding liability to be based on the jury's subjective estimation that the defendant paid more than "necessary" for an input, the Supreme Court reversed, holding that the objective, two-part "predatory pricing" test from Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993), should govern predatory-bidding claims instead. Otherwise, the Court explained, there would be a serious risk of chilling procompetitive behavior. This essay analyzes the Weyerhaeuser decision and argues that its teachings are not limited to antitrust cases. Rather, the concern about overdeterrence that animated Weyerhaeuser-in particular, the risk of chilling beneficial conduct through application of a highly subjective liability standard applies to punitive damages cases as well. The essay examines the disparity in treatment of overdeterrence concerns in the two contexts antitrust (where such concerns are taken seriously) and punitive damages (where they are often ignored)-and contends that the differential treatment is unjustified. It also offers a few suggestions to minimize the threat of overdeterrence posed by punitive damages awards.

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