Michael Haglund, left, and Nathan Adams, right. Courtesy photos

Ten U.S. plywood producers want a court order to stop the certification of Brazilian lumber mills, claiming the imports don't meet U.S. durability standards for structures and hurricane resistance.

The false-advertising complaint was filed Thursday and assigned to U.S. District Judge Roy Altman in Fort Lauderdale as Bahamians less than 100 miles away were still searching for survivors of Hurricane Dorian's demolition work.

The lawsuit seeking $150 million in damages characterizes Brazilian plywood exports as defective due to a "massive quality control failure" obscuring a high risk of failure. The complaint also depicts a price war that has left many U.S. producers operating at a loss since September 2017.

U.S. producers in the South and Pacific Northwest maintain flaws in the Brazilian wood are a function of climate and biology. While loblolly and slash pine trees are used for plywood in both countries, the complaint said the same nonnative trees grows so fast in southern Brazil that the wood fiber's density is insufficient to meet U.S. strength standards.

"The difference between the quality of the fiber going into the plywood in the U.S. compared to that of Brazil is apples to oranges," Tyler Freres,  vice president of Freres Lumber Co., a coalition members in Oregon, said in a news release.

Plywood makers in Alabama, Georgia, Louisiana, Oregon and Washington are calling themselves the U.S. Structural Plywood Integrity Coalition to pursue the litigation filed by attorneys at Holland & Knight in Florida and Haglund Kelley in Portland, Oregon.

Defendants PFS Corp. of Wisconsin and Timber Products Inspection Inc. of Georgia certify Brazilian mills as meeting the voluntary PS 1-09 structural standard, said the complaint filed under the Lanham Act, the U.S. trademark law.

Co-defendant International Accreditation Service Inc., a California nonprofit that serves as the accrediting agency for the two companies, employs "shockingly weak certification procedures" that depend on Brazilian mills, government officials and subcontracted inspectors to verify performance standards, the complaint said.

Timber Products President Jay Moore responded by email Friday, calling the claims "both misleading and totally without legal merit." He said the company would address allegations in more depth next week but promised it would "defend itself vigorously." He said company "conduct and practices were in all respects consistent with its responsibilities and the standards applicable to this industry."

Asked for comment Friday, PFS released a statement Tuesday saying it would "vigorously defend" itself and Brazilian plywood meets the industry's PS 1 sheathing requirements.

International Accreditation did not respond to a request for comment.

The PS 1-09 standard has been written into U.S. building codes, which require an accreditation agency stamp on each panel identifying the production mill, the lawsuit said. The U.S. producers claim plywood shipped by 35 Brazilian plants failed to meet standards 75% to 100% of the time in tests conducted in 2018 and 2019.

The lawsuit focuses on the use of plywood in roofs, floors and walls as well as storm shutters. If Dorian hit Florida "with the force of winds that it had, a 4 or 5, there would be extremely high risk the storm shutters using this plywood would not have performed," Michael Haglund of Haglund Kelley said Friday.

The complaint seeks injunctions requiring the two certifying agencies to revoke the compliance certificates for the plywood plants operating in the Brazilian states of Parana and Santa Catarina.

In the United States, a dark, dense growth ring is produced in slow-growth cold weather, giving it the strength Brazilian wood lacks, the lawsuit said.

The nonprofit trade association APA, the Engineered Wood Association, obtain stamped Brazilian panels from nine mills, tested them and issued a product advisory in June 2018 reporting all of the panels failed bending stiffness strength and maximum deflection requirements.

Less than a month later, PFS and Timber Products rejected the findings and "strongly vouched for the quality of the Brazilian plywood bearing the PS 1-09 grade stamp," the complaint said.

Haglund said a Lanham Act claim was chosen because it's a strong federal law classically applied "when any product is being misrepresented in terms of its attributes."

The damages claim was based on simple math with coalition members producing 1.5 billion square feet of plywood a year and estimating $75 million in annual losses since the U.S. market peaked two years ago.

Brazilian plywood has taken over 15% of the U.S. market, and market penetration in Florida is over 50%, the complaint said.

The producers estimated 20% of the Brazilian imports in 2018 came through Florida, primarily Fort Lauderdale, and the top U.S. destinations for Brazilian plywood are Florida, New York and Puerto Rico. Haglund said Brazilian suppliers largely filled Puerto Rico's reconstruction needs after Hurricane Maria hit in 2017.

The litigation is like a before-and-after look at building-supply cases. Chinese drywall was used in U.S. construction after the recovery effort from Hurricane Katrina in 2005 gobbled up U.S. supplies. Years later, homeowners claimed the drywall emitted noxious gas that made them sick and corroded metal in appliances and wiring. A settlement notice filed Aug. 20 in New Orleans federal court would commit $248 million to property owners.

Other Haglund Kelley attorneys involved in the case are Michael Kelley, Eric Brickenstein and Christopher Griffith in Portland. Holland & Knight attorneys are Nathan Adams in Tallahassee and Lee Teichner in Miami.

Read the complaint: