Steves Awarded $58.6 Million in Lawsuit Against Jeld-Wen

February 19th, 2018 by Trey Barrineau

Texas-based door manufacturer Steves & Sons was awarded $58.6 million last week in an antitrust lawsuit after  a federal court ruled that Jeld-Wen was overcharging the company for molded door skins.

The jury in the U.S. District Court for the Eastern District of Virginia in Richmond found that Jeld-Wen had violated its contract with Steves, as well as  Section 7 of the Clayton Act.

The Clayton Act, which was passed in 1914, bans some business practices that could lead to the formation of monopolies. Section 7 of the Clayton Act prohibits one company from buying another if the acquisition would reduce competition.

The case began in June 2016 when Steves sued the door-manufacturing giant, claiming Jeld-Wen violated its supply contract after  purchasing Chicago-based CMI. According to court documents, Steves had a supply contract with Jeld-Wen before the purchase of CMI, which at the time was one of just two door skin companies in competition with Jeld-Wen.

Steves claimed that the deal allowed Jeld-Wen to drastically reduce the national supply of door skins, boost prices and reduce product quality. Steves also claimed that Jeld-Wen’s purchase of CMI made it hard for competitors to enter the market. The jury agreed, and it awarded Steves $12.15 million for past damages and $46.5 million for the loss of future profits.

“We want to thank our employees, who stood strong with us,” said Edward G. Steves, Steves & Sons CEO, and Sam Bell Steves II, the company’s president, in a statement. “Our employees are the central core of our business and we consider them our family. We also want to thank our customers, the lifeblood of our business. We know they have a choice with whom they do business, and we are privileged to serve them.”

In a statement after the verdict, Jeld-Wen said “the facts underlying this dispute do not establish either a violation of the antitrust laws or a breach of contract,” noting that the Antitrust Division of the Department of Justice reviewed the company’s purchase of CMI and did not challenge it. However, Jeld-Wen added that it “does not believe that the ultimate outcome of this matter will have a material impact on its ability to operate in the ordinary course of business.”

The legal dispute between Jeld-Wen and Steves will continue in April with a trial related to the possible misappropriation of trade secrets.

According to court documents, during the process of litigating the recently resolved lawsuit between the two companies, Jeld-Wen filed a counterclaim against Steves “to address … Steves’ theft of Jeld-Wen trade secrets and confidential information.” Jeld-Wen claims in the countersuit that Steves and two former Jeld-Wen employees “had engaged in a conspiracy and had stolen trade secrets … respecting how to build and operate a doorskin plant that could produce products of the type that Steves was buying from Jeld-Wen.”

According to filings with the U.S. Securities and Exchange Commission, Jeld-Wen is No. 1 in net revenue for residential doors in the United States, Australia, Germany, Switzerland and Scandinavia. In 2015, Barron’s said the company controls about 40 percent of the U.S. market for residential doors.

Steves has about 850 employees at three facilities in the U.S. In 2013, DWM reported that the company had annual sales of about $120 million.

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