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Following up: The 2×4 lawsuit

BY Ken Clark

Back in September of 2014, a story about Lowe’s, lawyers and 2x4s whacked an industry nerve. That’s when a Marin County California judge ordered Mooresville, North Carolina-based Lowe’s to pay a $1.6 million settlement over a lawsuit alleging the inaccurate description of structural dimensional building products.

While industry standards effectively mandate that 2x4s measure slightly less, along with 2x8s and 2x6s and others, the suit was based on legal reasoning along the lines of: “Gotcha! – you said it was 2×4, and we measured it.”

The story was the most clicked of the year at HBSDealer.com. And the industry railed at the craziness of the lawsuit and settlement based on the idea of a 2×4 that doesn’t measure 2×4.

“This decision should be used as a "poster child" for the argument for tort reform,” wrote user-name mflaherty, at the time.

“Any man who hires a builder or architect who is so stupid as to not know the size of a 2×4 deserves to have his roof fall on head,” wrote VikingWolf.

Armed with tape measures, lawyers have struck again.

A class action complaint, Mikhail Abramov vs. The Home Depot, is working its way through the U.S. District Court of Northern District of Illinois, Eastern Division. The suit alleges that when Abramov brought home a 6-foot long 4×4, he was surprised to realize it measured a mere 3.5 x 3.5 by 6. The lawsuit calculates that this shortage represents 23% less mass than he thought he was buying. 

In June, the Home Depot said the case should be tossed out of court.

Home Depot is arguing, quite reasonably, that boards measuring a full 2×4 would be ineffective as a building product, given industry accepted standards.

“Retailers such as Home Depot did not create these lumber sizing standards or naming conventions and should not be subject to suit simply for following them,” Home Depot wrote in court papers seeking dismissal. “Plaintiff’s attempt to turn this accepted lumber naming convention into a class action lawsuit should be rejected. To do otherwise would ignore nearly a century of standardization and disturb an entire industry’s reliance on these lumber names.”

A similar Illinois suit, brought by the same law firm representing Abramov, is targeting Menards. The suits were described this way in an Above the Law web site column: ‘Home Depot and Menard’s face the dumbest class action claim ever.”

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HBSDealer Stock Watch: Bullish Monday

BY HBSDEALER Staff

Stocks received a boost on Monday, particularly SHLD and SHOS, which were up 5.90% and 3.70%, respectively.

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Market Recap: RISI Crow’s Construction Materials Cost Index

BY HBSDEALER Staff

A price index of lumber and panels used in actual construction for June 23, 2017.

Western – regional species perimeter foundation; Southern – regional species slab construction.

Crow's Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.

Lumber: Prices in the SPF lumber market remained solid and moved higher in several instances. “It seems sneaky strong,” was one eastern producer’s market assessment. With the AD determination looming and a CVD likely to take a hiatus prior to its final determination, buyers carried some degree of caution while approaching the market. Southern Pine prices continued to decline, many of them for the ninth consecutive week. Any rebound might be further delayed by Tropical Storm Cindy, which pushed onto land at midweek, delivering heavy rains to the Gulf States and further north. Upward price momentum increased in the Coastal species market. Traders reported good to strong demand, depending on the item, with green Doug Fir again leading the way. Sales of both dry Doug Fir and Hem-Fir occurred in great enough volumes to lift those prices moderately. Inland species experienced decent activity; however, it did not generally translate into stronger prices. The strength of Inland lumber showed clearly in Fir-Larch Select Structural lumber, as demand overrode supply and pushed these prices strongly higher. Stud prices remained firm to higher. Stronger demand for some items limited those supplies. Yards purchased in accordance with perceived needs without taking up a large position. Reports indicate that Radiata Pine Shop in the market has increased in volume. The demand for Shop has been good, however, pushing both 5/4 and 6/4 Ponderosa Pine to firmer levels. Most producers continue to show unchanged prices on 4/4 Ponderosa Common boards, but a couple of items have been reported at softer levels. Western Red Cedar buyers continued to purchase mixed loads in response to high prices, upcoming duty decisions and a need to fill inventory holes. Buyers considered the repercussions potentially stemming from the upcoming antidumping duty determination and the likely suspension of countervailing duties.

Panels: Buyers took a step back this week in the OSB market, but sources all agree that need for panel remains strong. Prices continued a mild strengthening trend. Purchasing remains on a needs-only basis. Most business is LTL, through some truckloads are moving in scattered markets. Southern Pine plywood pricing was largely stagnant in the wake of lackluster sales activity. While spotty volumes remained available for shipment the week of June 26, most producers reported lead times extending into the weeks of July 3 and 10. Western Fir plywood producers reported a “good, solid week” of sales. Buyers throughout the West and East were active. In response, prices moved higher, particularly in sheathing. Order files extending into the weeks of July 10 and 17 were typical. Canadian plywood activity went into a digestive mode this week after a strong run, though there is still need for wood throughout the system. Buyers eased off after prices jumped four points, passing the $500 mark, and order files moved out four to five weeks. MDF outperformed particleboard despite competition with imports. Order files for MDF extended well into the latter half of July, despite a slower pace noted by some western producers.

For more on RISI, click here.

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