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Steves and Sons, Inc. v. Jeld-Wen, Inc.

United States District Court, E.D. Virginia, Richmond Division

December 18, 2017

STEVES AND SONS, INC., Plaintiff,
v.
JELD-WEN, INC., Defendant.

          MEMORANDUM OPINION

          Robert E. Payne, Senior United States District Judge

         This matter is before the Court on DEFENDANT/COUNTER-PLAINTIFF JELD-WEN, INC.'S MOTION TO VOLUNTARILY DISMISS COUNTERCLAIMS WITHOUT PREJUDICE (ECF No. 457). For the reasons set forth below, the motion was denied.

         BACKGROUND

         This action was filed on June 29, 2016 after the failure of a contractually mandated mediation process. Complaint (ECF No. 5) (Under Seal). Steves and Sons, Inc. ("Steves") alleged several claims against JELD-WEN, Inc. ("JELD-WEN"). In COUNT ONE, Steves alleged a violation of the Clayton Act, Section 7, 15 U.S.C. § 18. In COUNT TWO, Steves alleged a breach of contract arising out of a 2012 long-term doorskin supply agreement between Steves and JELD-WEN ("the Supply Agreement"). In COUNT THREE, Steves alleged a breach of warranty, both express and implied. In COUNT FOUR, Steves sought a declaratory judgment as to certain rights under the Supply Agreement and the putative termination of that contract. Id. ¶¶ 175-92.

         JELD-WEN filed a motion to dismiss COUNT ONE, which was denied and, on August 5, 2016, JELD-WEN filed its Answer to the Complaint. ECF Nos. 30 (Under Seal), 64. At a pretrial conference on October 19, 2016, the matter was set for trial to begin on June 12, 2017, and a detailed schedule for the conduct of pretrial proceedings was thereafter implemented. ECF No. 65. Pursuant to that schedule, the parties engaged in extensive discovery.

         On March 27, 2017, JELD-WEN sought leave to amend its Answer and to add counterclaims against Steves, which were asserted "to address JELD-WEN's recent discovery of Steves' theft of JELD-WEN trade secrets and confidential information, " the alleged theft of which had been discovered by virtue of documents produced during litigation. ECF No. 101 at 1-2. The counterclaims were predicated upon the assertion that Steves-through its principal officers, Edward Steves and Sam Steves II ("the Steves Brothers")-along with two former JELD-WEN employees, John Pierce ("Pierce") and John Ambruz ("Ambruz"), had engaged in a conspiracy and had stolen trade secrets from JELD-WEN respecting how to build and operate a doorskin plant that could produce products of the type that Steves was buying from JELD-WEN under the Supply Agreement.

         JELD-WEN asserted the following proposed counterclaims under federal and Texas law: FIRST COUNTERCLAIM FOR RELIEF, Violation of the Defend Trade Secrets Act, 18 U.S.C. § 1836; SECOND COUNTERCLAIM FOR RELIEF, Conspiracy to Violate Defend Trade Secrets Act, 18 U.S.C. § 1832(a)(5); THIRD COUNTERCLAIM FOR RELIEF, Violation of the Texas Uniform Trade Secret Act, Texas Civil Practice & Remedies Code Annotated §§ 134A.001 -134A.008; FOURTH COUNTERCLAIM FOR RELIEF, Tortious Interference with Contract Under Texas Common Law; FIFTH COUNTERCLAIM FOR RELIEF, Tortious Interference with Contract Under Texas Common Law; SIXTH COUNTERCLAIM FOR RELIEF, Breach of the Implied Covenant of Good Faith and Fair Dealing Under Delaware Law; and SEVENTH COUNTERCLAIM FOR RELIEF, Breach of Contract. Proposed Counterclaims (ECF No. 106) (Under Seal) ¶¶ 41-78.

         Steves vigorously opposed the addition of the counterclaims, arguing that the putative counterclaims should be brought in San Antonio, Texas where Steves, Pierce, and Ambruz could be sued. PLAINTIFF'S MEMORANDUM IN OPPOSITION TO DEFENDANT JELD-WEN, INC.'S MOTION FOR LEAVE TO AMEND ANSWER (ECF No. 117) at 14. At oral argument on the motion for leave to add the counterclaims, Steves continued to argue that the counterclaims should be pursued in Texas, not in this case. JELD-WEN continued to advocate zealously for prosecution of the counterclaims in this action.

         On May 17, 2017, the Court allowed JELD-WEN to proceed with the counterclaims in this forum.[1] At the same time, however, the Court ordered that the trade secrets counterclaims be tried separately from the antitrust claims. ECF Nos. 239-240. The parties subsequently continued with discovery and were asked to comment about the sequencing of Steves' antitrust and contract claims and JELD-WEN's counterclaims. Trial for the counterclaims was set to begin on February 12, 2018. ECF Nos. 259-261.

         Then, after briefing and argument on the topic, on September 13, 2017, Steves' motion to dismiss the Second, Sixth, and Seventh Counterclaims was granted. Those counterclaims were dismissed with prejudice. ECF Nos. 353-354.

         Shortly thereafter, counsel for Steves and counsel for JELD-WEN asked the Court to move the trial in the trade secrets case to April 2018 based on representations that the same lawyers would be involved extensively in the trial of the antitrust claims in January 2018, and could not adequately prepare for trial of the trade secrets counterclaims beginning on February 12, 2018. ECF No. 352. Because of these entreaties, and only because of these entreaties, the Court moved the trial of JELD-WEN's counterclaims to April 9, 2018. ECF No. 374.

         On September 26, 2017, JELD-WEN filed an action in Texas state court wherein it asserted its trade secret claims and certain related claims against the Steves Brothers and Pierce. That complaint contained the following claims under Texas law: COUNT ONE, Violation of the Texas Uniform Trade Secrets Act, CPRC § 134A, against all defendants; COUNT TWO, Conspiracy to Violate Texas Uniform Trade Secrets Act, CPRC § 134A, against all defendants; COUNT THREE, Breach of Contract, against Pierce; COUNT FOUR, Tortious Interference with Contract, against the Steves Brothers; COUNT FIVE, Tortious Interference, against Pierce; COUNT SIX, Breach of Fiduciary Duty, against Pierce; and COUNT SEVEN, Aiding and Abetting Breach of Fiduciary Duty, against the Steves Brothers. Texas Petition (ECF No. 403-1) ¶¶ 53-70.

         Then, on October 23, 2017, JELD-WEN voluntarily moved to dismiss its counterclaims in this case. ECF No. 457. After briefing on that motion had been completed, JELD-WEN filed an amended complaint in the Texas case that removed several claims from the original complaint: namely, Count One, Count ...


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