Masonite and Jeld-Wen Argue Against Big Boxes in Class Action Suit

June 2nd, 2020 by Drew Vass

In an ongoing lawsuit against them, door manufacturers Masonite Corp. and Jeld-Wen Inc. filed a memorandum of opposition recently, arguing that the case shouldn’t be allowed to achieve class certification with retail giants The Home Depot and Lowe’s listed as members. Spearheaded by Grubb Lumber Co. and a purchasing cooperative known as Philadelphia Reserve Supply Co., the suit was filed in 2018, alleging that Jeld-Wen and Masonite conspired to fix prices. Plaintiffs that bought interior molded doors indirectly through distributors are now seeking injunctive relief under the Sherman Act, as well as under various state antitrust and consumer protection laws.

In a court-provided copy of the memo, defendants argue that wholesale purchasers (plaintiffs) “cannot include two multi-billion-dollar retail enterprises,” on the grounds that plaintiffs “must prove that the entire class suffered the same injury.” The two big box retailers account for 41% of the defendants’ sales for interior molded doors between 2010 and 2018, the memo states. For this reason, “Big box retailers have tremendous bargaining leverage,” defendants suggest, leading them to frequently reject proposed price increases and often demanding price decreases, the memo states. Meanwhile, the named plaintiffs are wholesalers, which defendants suggest are “smaller, regional resellers that primarily serve a different set of customers and have very different price negotiations.” Legal representatives for Jeld-Wen and Masonite further allege that while the case hinges on a set of price-increase announcement letters sent to direct purchasers, big box retailers did not receive those letters.

In other arguments, defendants allege that some of the actions upheld as evidence for efforts to price fix, such as phone calls made between Masonite and Jeld-Wen executives, did not happen within the period of time suggested by the case.

Together, Jeld-Wen and Masonite are accused of conspiring to fix prices by allegedly holding approximately 85% of the market for certain interior doors. In the initial complaint, the plaintiffs asserted claims under the laws of twenty-five states where no named plaintiff lived or suffered harm—which the court said they lacked standing to pursue. In November 2019, the court granted a motion allowing plaintiffs to file a supplemental motion for leave to add additional plaintiffs to “revive several of the previously dismissed state law claims.” That motion was granted in part and denied in part in early May.

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