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House Siding Suit Nears Settlement

July 13, 2000

FEDERAL WAY, Wash. (AP) _ A proposed settlement in a class-action lawsuit against the Weyerhaeuser Co. over defective house siding has won preliminary approval in a state court in California.

Under the deal presented Wednesday, Weyerhaeuser agreed to pay to replace swollen, warped, split and rotted siding made from compressed wood chips, fiber, resin and wax at a plant in Klamath Falls, Ore.

Production of the siding ended in 1996, the year after the first claims were brought.

The settlement covers a class-action lawsuit filed in 1998 in Superior Court in San Francisco and could extend to similar litigation pending in Oregon, Iowa, South Carolina and Texas. The dismissal of a similar case in Washington state is on appeal.

Unlike a settlement with Louisiana-Pacific Corp. of Portland, Ore., in a similar case four years ago, there is no limit cap on what Weyerhaeuser may be required to pay.

``Whatever comes in, comes in, and it gets paid no matter how many other people get paid,″ said Christopher I. Brain of Seattle, one of the principal lawyers for homeowners who brought the case.

Nearly 2 billion board-feet of the hardboard siding was made by Weyerhaeuser, based in this Seattle suburb, or was sold under the company’s name between 1981 and 1999, Brain said.

More than a third ended up on homes, apartments and other buildings in California, he said. Colorado, Arizona, Washington and Oregon also have affected buildings.

Weyerhaeuser is paying 11 law firms representing plaintiffs at least $18 million, representing 15 percent of the first $120 million in claims, and a maximum of another $8.4 million, representing 12 percent of the next $70 million in claims. The deadline for filing claims is 2009.

Weyerhaeuser announced earlier that it was setting up a reserve for the settlement with $82 million of its after-tax profits in the second quarter. It earned $244 million in the first quarter, and it plans to report second-quarter results next week.

The Louisiana-Pacific settlement, in which Brain also represented homeowners, required the company to pay $275 million into a compensation fund.

When claims soared higher, the company put another $100 million in the fund and established a second fund with $125 million that could be used to pay homeowners more quickly if they accepted a fraction of their original claim.

Payments have exceeded $470 million, thousands of claims remain unpaid and new claims are still being filed.

Terms of the Weyerhaeuser agreement should result in faster payment on claims, Brain said.

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