BUCKSPORT, Maine - Attorneys for the International Association of Machinists and Verso Paper had their first meeting with a U.S. District Court judge today on the union's lawsuit against the company.
The union is asking the court to block Verso's plan to sell its soon-to-be shuttered mill in Bucksport to American Iron and Metal - or AIM. It's widely believed that Montreal-based AIM plans to keep operating the mill's power plant, but recycle the rest of the facility for scrap.
The union also wants the court to force Verso to make timely severance payments to the mill's employees, in accordance with state law.
The preliminary hearing before U.S. District Court Judge John Woodcock was held on the phone and was off-limits to journalists. Essentially the court is splitting the complaint into two separate cases: one covering antitrust issues, the other dealing with severance claims.
On the antitrust side, the union wants Judge Woodcock to temporarily stop the sale of the Bucksport mill to AIM. Donald Baker represents the International Association of Machinists in the case. He ran the antitrust division of the U.S. Justice Department from 1976 to 1977.
"We think that a firm cannot engage in a merger that makes it the leading firm, and, at the same time, close down a facility," Baker says.
Verso Paper is in the process of trying to complete a merger with New Page Holdings. New Page is the largest producer of coated paper in North America. If approved by the U.S. Department of Justice, the merger would make Verso the dominant player in the market.
In its complaint, the union alleges that Verso's sole motivation in shutting down the Bucksport mill and selling it for scrap is to reduce competition and achieve monopoly power. "We want an order that says that they have to - if they don't want to operate the plant - they have to put it up for sale at a reasonable price" to a company, says Baker, that wants to come in and keep making paper in Bucksport.
Attorney Jonathan Lewis is an antitrust partner at the BakerHostetler, a Washington law firm. Lewis has been following the proposed merger between Verso and New Page.
"As much as this is of interest to employees at the mill, with what's going on in the background at the antitrust division, I just don't see the judge wanting to stick his nose into the antitrust issues at this point," Lewis says.
For nearly a year now, says Lewis, officials at the U.S. Justice Department have been reviewing the Verso-New Page deal to make sure it doesn't violate any federal antitrust laws.
"From what is publicly known, there is going to be some divestitures of a couple mills that would resolve whatever competitive concerns the antitrust division has," Lewis says. "And, in terms of this particular mill in Bucksport, the announcement was made to close the mill. I suspect that the antitrust division was well aware of that decision.
A lawyer for Verso would not comment on either the antitrust complaint or the motion that seeks the force the company to pay workers their severance in a timely fashion. The International Association of Machinists contends that state law requires Verso to make severance payments no later than Jan. 9. Verso has said it wants to pay the soon-to-be laid off workers on April 1.
A hearing on the severance complaint will take place next week. The court will take up the antitrust matter in early January.
