Jeld-Wen ordered to divest Pennsylvania plant to restore competition
Federal Judge Robert Payne has ordered Jeld-Wen, a wholly-owned subsidiary of Jeld-Wen to divest itself of its Towanda, Pennsylvania, interior molded doorskin-manufacturing plant, to preserve and maintain the plant through divestiture to another company, and to enter a series of contracts designed to ensure that the divestiture results in a viable supplier of molded doorskins going forward. Judge Payne also ordered that a Special Master - to be appointed by the Court - will oversee the divestiture process, including sale of the plant. Jeld-Wen will be responsible for the cost of that Special Master. The Judge's order finalizes the opinion he released October 5, which detailed actions to follow a unanimous February 15, 2018 jury decision in his Richmond, Virginia court agreeing with Steves' assertion that Jeld-Wen violated federal antitrust law - specifically, the Clayton Act - by substantially reducing competition in the market for interior molded doorskins in the U.S. through its acquisition of its former competitor, CMI. The jury also sided with Steves in finding that Jeld-Wen had breached its long-term doorskin supply agreement with Steves. After winning that jury verdict, 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 divestiture would restore competition in the market for interior molded doorskins in the U.S., to the benefit of competition and independent door manufacturers, including Steves. Jeld-Wen insisted that an order of divestiture would be a "disaster" for Jeld-Wen's own operations, and resisted divestiture on a variety of other grounds. In a lengthy and detailed October opinion, the Court substantially agreed with Steves. The Court observed Jeld-Wen's conduct after the merger, including the fact that "Jeld-Wen felt free to disregard existing contract obligations respecting pricing and to engage in bullying tactics to get increased prices even if that would kill off some of the Independents who were its customers." The Court then said that it 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 detailed what the divestiture of the Towanda plant would entail - to include everything from the plant itself to inventory, materials, office furniture, computer systems, licenses, permits, contracts, certifications, customer lists and supply agreements, repair and maintenance records, patents, other intellectual property, trade secrets, operational manuals and many other items. The judge also ordered Jeld-Wen not to hire any of the plant's employees for at least two years following the divestiture. The judgment also included an award of declaratory relief, again in favor of Steves, which requires that Jeld-Wen follow certain terms of its contract with Steves for the remainder of its term. Jeld-Wen must honor the contract it signed. The judgment also resolves outstanding remnants of Jeld-Wen's failed trade secrets campaign against Steves. Jeld-Wen had filed a counterclaim in response to Steves' original Clayton Act antitrust suit, alleging that Steves had misappropriated purported trade secrets in violation of the Texas Uniform Trade Secrets Act and the Federal Defense of Trade Secrets Act. The counterclaim was separated from the Steves' antitrust claims for a separate trial.