Steves & Sons Wins Antitrust Decision as Federal Judge Orders JELD-WEN to Divest Towanda Plant
SAN ANTONIO – In a major antitrust decision, San Antonio-based door manufacturer Steves & Sons, Inc. (www.StevesDoors.com), today, won an order of divestiture against JELD-WEN, Inc., a wholly-owned subsidiary of JELD-WEN Holding, Inc. (NYSE: JELD), in the United States District Court for the Eastern District of Virginia, Richmond Division. JELD-WEN will be required to sell its doorskin plant in Towanda, Pennsylvania, under terms and conditions established by the Court. Judge Robert E. Payne’s decision is designed to restore competition in the marketplace.
Doorskins are a critical component used in manufacturing interior doors, which is the primary business of Steves & Sons.
The Towanda facility in Pennsylvania was originally part of International Paper and was sold to Premdor in 2000. In 2002, the US Department of Justice forced Premdor to divest the facility, and it was ultimately purchased by CraftMaster (CMI). The scale of the Towanda plant is significant, with its capacity making it the second largest doorskin facility in the world.
On February 15, 2018, a nine-person jury unanimously agreed with Steves that JELD-WEN’s acquisition of its former competitor, CMI, violated federal antitrust law, specifically the Clayton Act, by substantially reducing competition in the U.S. market for interior molded doorskins. The jury awarded Steves $12 million in past damages, plus $46.6 million in future lost profits, which is automatically trebled under the antitrust law for a total of $175.8 Million. The verdict also entitled Steves to recover its substantial attorneys’ fees, litigation expenses and interest. The jury additionally sided with Steves in finding that JELD-WEN had breached its long term doorskin supply agreement with Steves.
Subsequently, in April 2018, the Court held a multi-day hearing to consider whether to impose equitable remedies designed to restore competition in the doorskins market. At the hearing, Steves sought an order of divestiture that would require JELD-WEN to sell the doorskin plant in Towanda, Pennsylvania that it acquired as part of its unlawful acquisition of CMI. Steves argued that an order of divestiture would restore competition in the U.S. market for doorskins, to the benefit of competition and independent door manufacturers.
On page 74 of his opinion, Judge Payne wrote “…the Court finds that JELD-WEN’s conduct toward Steves shows that JELD-WEN regarded Steves, a significant player in the interior door market, to be an independent to be killed off.”
On that same page, he described JELD-WEN’s conduct toward Steves as “evasive, sharp, and deceptive” and referred to its “general bullying conduct toward Steves.”
Marvin G. Pipkin, attorney for Steves, said, “JELD-WEN couldn’t refute Steves’ claims that JELD-WEN deliberately attempted to freeze Steves out of the door business by controlling the means of doorskin production, subverting a long-term contract with Steves and lowering the quality of product it sold to Steves. They didn’t fool the jury and they didn’t fool the judge. The inherent value of competition was reaffirmed by the American justice system.”
“This decision is great news for our company, our industry and for competition in the American marketplace,” said Sam Bell Steves II, President of Steves & Sons. “For Steves & Sons, it clears the way forward for us to continue serving our customers with the quality products and attention to detail that have marked the success of this family-owned company since our founding in 1866.”
Edward G. Steves, CEO of Steves & Sons, said, “After divestiture, Towanda could ensure a continual source of molded doorskins for the foreseeable future. The future is bright for Steves & Sons and the 1,100 people who work with us.”
About Steves & Sons
With interior and exterior door plants in San Antonio, and interior door plants in Richmond, Virginia and Lebanon, Tennessee, Steves & Sons employs more than 1,100 associates. The company continues to build its business and reputation among builders and homeowners across the country with continued emphasis on quality materials, new technology and efficient distribution.
For more information contact Marvin Pipkin (Pipkin & Kloppe-Orton, L.L.P.) – 210-213-3378 or firstname.lastname@example.org
Link to the Memorandum Opinion