World News: 10:00 GMT Friday 15th March 2019. [Steves & Sons, Inc. via Businesswire via SPi World News]
On March 13, 2019, Judge Robert E. Payne of the federal district court for the Eastern District of Virginia denied motions by JELD-WEN, Inc., a wholly-owned subsidiary of JELD-WEN Holding, Inc. (NYSE: JELD), to overturn a landmark antitrust verdict against JELD-WEN and in favor of Steves & Sons, Inc. (www.StevesDoors.com).
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190315005082/en/
A jury previously found that JELD-WEN’s acquisition of its former competitor, CraftMaster (CMI), violated federal antitrust law by substantially reducing competition in the U.S. market for interior molded doorskins, and the jury awarded Steves $58.6 million in antitrust damages—automatically trebled to $175.8 million. The jury also found that JELD-WEN breached a Supply Agreement it had entered into with Steves. In rejecting JELD-WEN’s attempts to set aside the jury’s verdict, Judge Payne explained that “a review of the record shows that the evidence amply supported both the antitrust verdict and the breach of contract verdict,” that “every element of those claims was proved by a preponderance of the evidence” and that the “jury rightly returned a verdict in favor of Steves.”
The Court also issued an Amended Final Judgment that reiterates that, in order to restore competition in the market for interior molded doorskins, JELD-WEN will be required to sell its doorskin plant in Towanda, Pennsylvania, which it acquired as part of its acquisition of CMI. After the plant is sold, the new owner of the plant will be required to enter into a three-year Supply Agreement with Steves.
The Amended Final Judgment also contains important provisions that will protect competition and Steves during any appeal by JELD-WEN. If JELD-WEN’s appeal extends past September 10, 2021—the date the Supply Agreement between Steves and JELD-WEN is slated to expire—the Supply Agreement shall automatically “be extended for one year beyond the conclusion of the appeal.” Steves also has the right to request a longer extension during the appeal. During any appeal, JELD-WEN is required to “maintain the status quo at the Towanda facility.”
The Court has appointed a Special Master, the Honorable Lawrence F. Stengel, Retired Chief Judge for the United States District Court for the Eastern District of Pennsylvania, to supervise the divestiture of Towanda and JELD-WEN’s compliance with the Amended Final Judgment.
“The Judge’s Amended Final Judgment makes clear that, during any appeals process, Steves will continue to receive doorskins from JELD-WEN under its existing contract,” said Marvin Pipkin, attorney for Steves & Sons. “In lieu of receiving a significant portion of the jury’s damages award, Steves sought the divestiture by JELD-WEN of the unlawfully acquired Towanda plant, which can build well over 20 million doorskins per year,” he said. “For Steves, the stewardship of their company, and restoring competition and choice in the marketplace were infinitely more important than electing a significant cash award.”
Edward G. Steves, CEO of Steves & Sons, said, “Once again, our company has been vindicated in court. The jury decisively and unanimously agreed with Steves. Now the Court, in very clear terms, has rejected JELD-WEN’s arguments and has upheld the jury’s verdict. We are confident that the Court of Appeals will agree with Steves as well. We are moving forward at full speed.”
Sam Bell Steves II, President of Steves & Sons, said, “Our dedication to quality for more than 150 years has resulted in great, long-term partners who know they can rely on that quality and our reputation.”
Doorskins are a critical component used in manufacturing interior molded doors, which is the primary business of Steves & Sons, a sixth-generation family-owned company founded in 1866 and based in San Antonio, with other facilities in Richmond, VA and Lebanon, TN. The company employs some 1,100 people.
JELD-WEN is a multi-billion-dollar company which is one of the largest door manufacturers in the world. The company makes doorskins for its own door sales and also sells doorskins to other door manufacturers like Steves.
The Judge’s Amended Final Judgment concludes a series of events beginning with the unanimous jury decision on Steves’ antitrust and breach of contract claims. Steves then sought an order of divestiture that would require JELD-WEN to sell the doorskin plant in Towanda in order to restore competition in the doorskin marketplace for independent door manufacturers such as Steves.
In a lengthy, detailed opinion issued October 5, 2018, Judge Payne substantially agreed with Steves, noting that after JELD-WEN’s acquisition of CMI, “JELD-WEN felt free to disregard existing contract obligations respecting pricing and began to engage in bullying tactics to get increased prices even if that would kill off some of the Independents who were its customers.” JELD-WEN’s anticompetitive conduct was described by the Judge as “evasive, sharp, and deceptive” and as “general bullying conduct toward Steves,” making judicial intervention necessary to restore competition in the marketplace. The Judge’s opinion said the Court would order JELD-WEN to sell the Towanda facility in order to restore the competition that JELD-WEN had destroyed with its illegal merger.
Judge Payne, in his initial Final Judgment of December 14, 2018, detailed what the divestiture of the Towanda plant would entail and how it would be conducted – under Court supervision. He noted, “Without the divestiture and the related conduct remedies . . Steves will suffer irreparable injury.”
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. (www.StevesDoors.com)
Business Wire: 10:00 GMT Friday 15th March 2019
SPi News is published by Sector Publishing Intelligence Ltd.
© Sector Publishing Intelligence Ltd 2019. [Admin Only]
Sector Publishing Intelligence Ltd.
Agriculture House, Acland Road, DORCHESTER, Dorset DT1 1EF United Kingdom
Registered in England and Wales number 0751938.