February 15, 2018

Steves & Sons Prevails in Groundbreaking Antitrust Jury Trial

Munger, Tolles & Olson won a federal jury trial on behalf of family-owned door manufacturer Steves & Sons on claims against JELD-WEN, a supplier of door manufacturing products. The jury found that JELD-WEN violated Section 7 of the Clayton Act, which bans mergers that substantially lessen competition, after its acquisition of CraftMaster in 2012.

The trial is believed to be the first jury trial applying Section 7 in the past 40 years. Following just three hours of deliberation, the U.S. District Court for the Eastern District of Virginia jury panel found on Feb. 15, 2018 in favor of Steves on all claims. The jury awarded Steves $12 million in past damages and $46.5 million in future lost profits. The verdict entitles Steves to recover three times its money damages, plus its reasonable attorneys’ fees and litigation costs. Also, it is possible that the court will order the divestiture of certain JELD-WEN assets. If that were to occur, it could affect the recovery of future lost profits.

Steves buys doorskins, an essential component for the manufacturing of certain interior doors, from JELD-WEN. Steves uses those doorskins to manufacture doors, and competes with JELD-WEN for the sale of doors to customers. Before the merger, Steves also bought doorskins from CraftMaster. Steves alleged in its complaint that after the merger, JELD-WEN began overcharging for doorskins and reducing doorskin quality, and that JELD-WEN’s notice of its intent to stop selling doorskins to Steves threatened Steves’ ability to make and sell doors. Steves sought not only monetary damages, but also injunctive relief sufficient to restore competition to its condition before the merger.

The trial team was led by Glenn D. Pomerantz and included Munger, Tolles & Olson attorneys Ted Dane, Kyle W. Mach, Kuruvilla J. Olasa, Joshua Patashnik and Emily C. Curran-Huberty; and co-counsel Hunton & Williams attorneys  Lewis F. Powell III, John S. Martin, Maya M. Eckstein, Alexandra L. Klein, Joshua P. Hanbury, Meghan A. Podolny and William H. Wright; and Marvin Pipkin and Kortney Kloppe-Orton of Pipkin Law. The opposing counsel was led by Margaret M. Zwisler, Alfred Carroll Pfeiffer Jr., Lawrence E. Buterman, Allyson McKenzie Maltas and Sarah Meyers Ray of Latham & Watkins LLP; and Harrison M. Gates, Craig Thomas Merritt and Michael W. Smith of Christian & Barton LLP.