Judge Denies Jeld-Wen’s Motion to Overturn Antitrust Verdict

March 29th, 2019 by Drew Vass, Executive Editor

The latest moves in a legal battle between door manufacturers Jeld-Wen and Steves and Sons Inc. (Steves) reached yet another conclusion this month, when a federal judge denied Jeld-Wen’s motion to overturn an antitrust verdict.

Steves was awarded $58.6 million in February 2018, after a federal court ruled that Jeld-Wen was overcharging the company for molded door skins. The case began nearly two years earlier, in June 2016, when Steves filed suit, claiming that Jeld-Wen inflicted damages by violating a supply agreement between the two companies, after  purchasing Chicago-based CMI. Steves had a supply contract with Jeld-Wen before the purchase, which was one of just two door skin companies in competition with Jeld-Wen at the time.

An initial trial-by-jury ruling in Steve’s favor upheld an award of $58.6 million in antitrust damages, which, when trebled, came to $175.8 million. That ruling was later upheld by Federal Judge Robert E. Payne, further requiring Jeld-Wen to divest its Towanda, Pa.-based manufacturing plant in order to restore competition.

In a memorandum of opposition filed January 30, officials for Steves urged the court to move forward as quickly as possible with the actions required by judgment, lest their company, they argued, could face closure. The court responded on February 11, by appointing the Honorable Lawrence F. Stengel, retired Chief Judge for the United States District Court for the Eastern District of Pennsylvania, as a Special Master—overseeing execution of original court orders.

Jeld-Wen followed suit by filing a motion to overturn the original December ruling. That motion was officially denied recently, by Judge Payne, requiring the company to continue with divesture of its Towanda, Penn.-based plant, while paying for damages related to antitrust violations.

Jeld-Wen argues in conclusory fashion, with no citation of authority, that somehow the dismissal of Jeld-Wen’s breach of contract counterclaims in the court’s Memorandum Opinion … prejudiced its ability to defend against Steves’ breach of contract claims,” states a memorandum of opinion filed by the court on March 13. “The argument made by Jeld-Wen is unfathomable, and, in any event, it is irrelevant,” the memo declares.

According to official court documents, Jeld-Wen failed to explain how it was prejudiced in defending Steve’s breach of contract claims.

Jeld-Wen erroneously argues that the court excluded wholesale evidence of Steves’ theft of Jeld-Wen’s trade secrets. That simply is incorrect,” court documents state.

While representation for Jeld-Wen questions the inadmissibility of evidence relating to the issue of CMI’s financial condition, the court maintains that any such suggestion was “thoroughly dealt with” in a prior opinion entered February 6, 2018. No further arguments, the memo suggests, would require the court to reconsider its opinion.

Given that the evidence about CMI’s financial condition would not support a weakened competitor defense or a failing firm defense, and that Jeld-Wen stated that it was not asserting such defenses, it would have been prejudicial to allow evidence of CMI’s financial condition because it would have been impossible to instruct the jury on how it could consider such evidence,” the judge’s memorandum of opinion states.

The memo delivers a total of six evidentiary rulings, ultimately denying Jeld-Wen’s motion for a new trial. An amended final judgment order was filed the same day, upholding prior orders. The judgment states that—if not completed by September 2021—Jeld-Wen must extend a supply agreement with Steves for one year beyond the conclusion of an appeal. The current supply agreement between the two companies is slated to expire on that date.

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