Amicus Brief in Steves v. Jeld-Wen Finds Special Master’s Recommendations CorrectMay 10th, 2022 by Brigid O'Leary
Responding to Judge Robert E. Payne’s request for a Department of Jusice (DOJ) amicus curiae, or impartial opinion, in the Steves and Sons v. Jeld-Wen court case, the attorneys who weighed in found the Special Master correctly assessed the situation.
The amicus curiae brief reads, in part, “Because the purpose of the divestiture is to restore competition to the relevant market, the Special Master was correct to consider whether the acquisition of divested assets by particular bidders could harm competition.”
Noting that the “preferred remedy for an unlawful merger is to prevent it from happening in the first place,” the Court took a look at the Special Master’s Report and Recommendation from February, regarding the divestiture of Jeld-Wen’s Towanda, Pa., plant.
“Since it necessarily cannot result in relief as complete as ex ante prohibition, a divestiture remedy must be implemented with great care to fully restore as much as possible the competition that was lost as a result of the transaction,” the brief continues.
The Court opined that the Special Master evaluated potential bidders using “many of the same general principles the Antitrust Division would apply if faced with the need to evaluate a potential divestiture buyer” and that “To evaluate whether a proposed divestiture would suffice to restore competition rather than risk harm through vertical integration, the inquiry must evaluate the current market conditions, including market conditions that have already deteriorated as a result of the merger.”
The lawyers who weighed in on the amicus brief noted that while the Court, itself, “has not at this point undertaken an independent investigation and offers no conclusions as to the outcome of the analysis, the factors that the Special Master considered in evaluating the bidders—including the likelihood any particular buyer might diminish competition in the relevant market by, e.g., undermining independent distributors—were relevant to assessing the effectiveness of the remedy.”
Pointing out that both the Court and the Antitrust Division are “generally quite skeptical of claimed efficiencies in merger cases,” the lawyers opined that “The Special Master applied correct principles related to the anticompetitive potential of a vertical merger and was appropriately skeptical of the impact of potential efficiencies … In assessing the inherently risky process of divestiture, the Special Master appropriately considered the potential for additional competitive harm from vertical consolidation as a factor weighing against a divestiture that would raise those risks, and was appropriately skeptical of claimed efficiencies.”