Steves and Sons Opposes Buyer in Court-Ordered Jeld-Wen Plant Sale

March 28th, 2022 by Brigid O'Leary

The lawsuit between Steves and Sons Inc. and Jeld-Wen continues with Steves and Sons filing an objection to the report and recommendation for the sale of Jeld-Wen’s Towanda, Pa.-manufacturing plant.

Lawyers for Steves and Sons did not mince words, opening the objection with the statement that, “Steves and Sons, Inc. didn’t fight this battle for 5 years—and obtain a first-ever divestiture order by a private party—just so that it could face a monopoly supplier and try to protect itself only by contract. As this Court is well aware, that very scenario arose from JELDWEN’s illegal acquisition of Craftmaster, and emboldened JELD-WEN’s campaign to ‘kill off’ Steves. Yet this is precisely the situation envisioned by the Special Master in his Report and Recommendation.”

Filed Thursday, March 24, the document recaps the Special Master Report and Recommendation, which “envisions” a specific buyer for the Towanda plant. Public copies of the objection are redacted, including the name of the suggested plant buyer. Steves and Sons lawyers point out that the Report and Recommendation surmises that both Jeld-Wen and Masonite will not sell to Steves and Sons “or any other independent even after divestiture assures that those independents will receive doorskins from elsewhere,” and that it’s unlikely a new doorskin maker will enter the market any time soon. They surmise “the Report and Recommendation assumes that Steves and the other independents can only buy doorskins” from the potential plant buyer, which they argue “will be a monopolist selling doorskins to them.”

Further, the Steves and Sons lawyers point out that “[b]y relying on a number of incorrect factual conclusions—some directly contradicting this Court’s own findings—the Special Master transmuted the unique pro-competitive benefits … reaching the puzzling result that Steves and the other independents should settle for limited-term contractual supply rights from a presumed monopolist. But the key pillars holding up that conclusion are flat wrong.”

Taking on those key pillars of argument, Steves’ lawyers wrote, “the Report and Recommendation recognizes that those efficiency advantages manifest in reduced doorskin prices, benefits which are not just within the relevant market, but exactly the market dynamic that motivated the jury verdict and divestiture remedy in the first place. Similarly, the Report and Recommendation rests on the notion that JELD-WEN will never compete to sell doorskins to independents—displaying no awareness that this Court has already found exactly the opposite in its equitable order, and ignoring the market dynamic that existed before JELD-WEN’s unlawful acquisition … This conclusion again ignores the incentives created by vertical integration.”

Plaintiff’s lawyers don’t let up, calling out the Report and Recommendation’s suggestions.

“Its differing incentives are obvious; indeed, the absolute worst case scenario for restoring competition is to sell Towanda to a buyer that has the incentive to stay in the doorskin business for only a few years (to satisfy its court-ordered supply commitment to Steves),” they wrote. “Such errors are enough to reject the Report and Recommendation outright.”

They also reiterate that they feel the Special Master did not understand or apply the previous court decisions when making the report and recommendations.

“The Report and Recommendation contain key errors of fact and misapplication of economic principles. These led the Special Master to reach an exactly backwards conclusion,” they state in the objection. “After years of litigation, there is no reason that Steves or others in the marketplace should settle for the result recommended by the Special Master.”

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