A federal judge in Washington, D.C., heard oral arguments Monday afternoon on whether Verso Paper Corp.’s acquisition of NewPage Holdings Inc. was in the public interest.
Judge Tanya Chutkan is reviewing the settlement agreement that the U.S. Department of Justice entered into with Verso to allow the $1.4 billion acquisition, which closed in January. That agreement required NewPage to sell its paper mills in Rumford, Maine, and Biron, Wisconsin, to Catalyst Paper in order to prevent the new Verso from controlling too much of the coated paper market in North America. Monday’s oral arguments are a continuation of the complaint DOJ filed on Dec. 31, 2014, to prevent the acquisition unless the conditions of the agreement are met.
Though the DOJ agreement allowed Verso’s acquisition to go ahead, a federal law created in the 1970s called the Tunney Act provides for a public comment period in the wake of such DOJ settlement agreements, according to Kim Tucker, a lawyer from Lincolnville. She is representing Local 1821 of International Association of Machinists and Aerospace Workers, the union that represented some of the former workers at Verso’s mill in Bucksport, which Verso closed last December, laying off more than 500 employees.
Tucker says the Bucksport closure, coupled with other events since Verso acquired NewPage, including recent layoffs in Rumford, a price increase for Verso paper and last week’s announcement that Verso would shut down a paper machine and pulp dryer at its Jay mill, are proof that the DOJ’s agreement did not protect the public interest. Three hundred jobs are expected to be lost in Jay from the equipment shutdowns.
In a letter to the judge filed in May, Tucker said the DOJ’s requirement that NewPage sell its mills to Catalyst “has already been demonstrated to be an ineffective and unreasonable remedy to ‘cure the antitrust violations alleged in the complaint.'”
It was the letter from May that opened the door to Tucker’s oral arguments Monday in U.S. District Court.
“[Judge Chutkan] is supposed to determine if the deal is in the public interest,” Tucker said. “If she decides it is not, she can reject the deal – even though DOJ let the merger proceed before the court made this determination.”
Tucker said she thought the oral arguments went well, but did not know what to expect from the judge. She was joined on Monday in the courtroom by two former Bucksport mill workers, Rick and Herb Gilley. Tucker is representing the machinists union, which Rick now works for, but is providing pro bono services for Herb Gilley, a 40-year veteran of the Bucksport mill who has involved himself in the case as an individual.
“Apparently, this is a bit unusual for even seasoned antitrust lawyers,” said Tucker, referring to the judge’s decision to allow oral arguments. “But I hope I can persuade her that allowing Bucksport to be scrapped was contrary to public policy. So, I have no idea what will come of this effort but felt it was important to participate to advocate for Bucksport and the people harmed by its closure.”
A separate lawsuit the machinists union filed last year to prevent Verso’s sale of the Bucksport mill to a scrap metal dealer is still pending, Tucker said.
An earlier version of this story misidentified the plaintiff in this case. The plaintiff is the U.S. Department of Justice.
Send questions/comments to the editors.
