Burlington Industries, the North Carolina-based textile manufacturing firm, yesterday resigned from the U.S. Chamber of Commerce to protest one of its lobbying campaigns.
In a sharply worded letter, Burlington Chairman William Klopman said he was "outraged" that the chamber had taken a stance an a pending antitrust bill that is "directly contrary to the interests of tens of thousands of . . . businesses."
The bill, S. 995, would change the way damages assessed in price-fixing cases are divided among co-conspirators. Burlington objects to a provision that would allow judges to apply the new law to pending cases.
If it is enacted with that amendment, the bill could reduce by two-thirds a potential $21 million damage award Burlington hopes to receive as a successful plaintiff in a decade-old price-fixing case against Milliken and Co.
The chamber, which says it cannot remember the last time a member left in protest, expressed polite regret at Burlington's move. "Of course we're sorry to lose one of our members, but on the merits and the equities, we are convinced we are right," said Jeffrey Joseph, chamber vice president for domestic affairs.
The squabble over retroactivity has been one of the most bitter and expensive family feuds within the business community during the current congressional session. Each side is spending millions of dollars lobbying for its point of view; each has tens of millions of dollars riding on the outcome.
The fight in favor of the retroactive amendment (or, as its side prefers to call it, the "pending-case" amendment) has been led by five companies, Mead Corp., Georgia-Pacific Corp., Weyerhaeuser Co., Willamette Industries Inc. and Milliken & Co., that have lost jury verdicts in major price-fixing suits and that face huge potential damage judgments. They have hired a star-studded team of lobbyists, led by former attorneys general Griffen Bell and Benjamin Civiletti.
They are being opposed by Burlington and by International Paper Co., an adjudicated price-fixer which fears that the new law, if applied to pending cases, could upset an inexpensive settlement it made several years ago with its plaintiffs.
For the past 18 months, the chamber has been trying to walk a line between the disputants. Last fall, its antitrust committee conducted an elaborate day-long hearing on the matter, with all the trappings of a Supreme Court presentation. It decided to support the bill but remain neutral on the retroactivity question.
The bill removes a price-fixer from the threat of facing a treble damage judgment based not only on his own wrongdoing, but on the wrongdoing of his co-conspirators.
When the bill came up for a vote in the Senate Judiciary Committee this spring, Chairman Strom Thurmond (R-S.C.) reportedly told the chamber that it would get no bill unless it pressed for a compromise amendment that gives a trial judge the option to apply the new antitrust rules to pending cases.
Without reconvening its antitrust committee, the chamber sent out Mailgrams on the eve of the committee vote urging members to support the Thurmond amendment. Klopman's letter yesterday said he was "dismayed" at the "back-door decsion making" and said the "sudden reversal" supports a "bailout for five major corporations."
But Joseph insisted yesterday that the Thurmond language was a genuine compromise and that supporting it did not violate the posture of neutrality the chamber originally struck.
Joseph added that the chamber, which has 250,000 members, "has such a broad base that we can't always please everybody." Noting membership had more than doubled in the past 18 months, he added, "Obviously, we're doing something right."