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In re Interior Molded Doors Antitrust Litigation

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

March 6, 2019

IN RE INTERIOR MOLDED DOORS ANTITRUST LITIGATION IN RE INTERIOR MOLDED DOORS INDIRECT PURCHASER ANTITRUST LITIGATION

          OPINION

          JOHN A. GIBNEY, JR., UNITED STATES DISTRICT JUDGE

         In these consolidated class actions, the plaintiffs allege that the defendants, Masonite Corporation and Jeld-Wen, Inc., conspired to fix prices in the interior molded doors market in violation of federal and state antitrust laws. Masonite has moved to transfer venue pursuant to 28 U.S.C. § 1404(a) to the Middle District of Florida or alternatively the District of Delaware.[1]For the reasons that follow, the Court will deny the motion.

         I. BACKGROUND

         Masonite, a Delaware corporation with its principal place of business in Florida, and Jeld-Wen, a Delaware corporation with its principal place of business in North Carolina, manufacture interior molded doors ("IMDs") and "doorskins." Doorskins account for about 70 percent of the manufacturing cost of IMDs. In 2012, Jeld-Wen acquired Craftmaster International, Inc. ("CMI"), a major doorskin manufacturer. After the merger, the defendants collectively controlled 100 percent of the doorskin industry and roughly 85 percent of the IMD market in the United States. Because the manufacturers comprising the other 15 percent of the IMD market did not manufacture doorskins, they had to purchase doorskins from the defendants.

         In 2014, Jeld-Wen began raising doorskin prices to other IMD manufacturers, including those with whom Jeld-Wen had long-term supply agreements. One such manufacturer, Steves & Sons, Inc., refused to pay the increased costs and tried to find another supplier. Steves approached Masonite, the only other major doorskin manufacturer in North America, but Masonite refused to enter into a long-term supply agreement with Steves.[2] Shortly thereafter, Masonite publicly announced that it would no longer sell doorskins to other IMD manufacturers, leaving Jeld-Wen as the only major manufacturer of doorskins in North America and, consequently, Steves' and other IMD manufacturers' only option.

         In October, 2016, Steves sued Jeld-Wen in the Eastern District of Virginia, alleging that Jeld-Wen's acquisition of CMI violated section 7 of the Clayton Act because it substantially decreased competition in the residential door market.[3] In February, 2018, a jury awarded Steves $58 million ($175 million after trebling). The Court also ordered Jeld-Wen to completely divest CMI. Jeld-Wen has moved for a new trial-a motion currently pending.

         On the heels of the Steves verdict, two groups of plaintiffs[4] began filing these lawsuits in the Eastern District of Virginia against Masonite and Jeld-Wen. The direct purchaser plaintiffs[5]-those who purchased IMDs directly from the defendants-allege that Masonite and Jeld-Wen conspired with each other to adopt uniform price increases for IMDs after Jeld-Wen acquired CMI in violation of section 1 of the Sherman Act. Soon thereafter, the indirect purchaser plaintiffs[6]-those who purchased the defendants' IMDs through a third-party, such as a reseller-brought suit against the defendants. They also allege that the defendants violated section 1 of the Sherman Act. In addition, the indirect purchaser plaintiffs assert violations of various state antitrust laws, consumer protection laws, and unjust enrichment laws.

         Masonite has moved to transfer venue to the Middle District of Florida or alternatively the District of Delaware. The plaintiffs ask the Court to keep these consolidated actions in the Eastern District of Virginia because of their close factual and legal relationship with Steves.

         II. DISCUSSION

         "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district... where it may have been brought." 28 U.S.C. § 1404(a). In deciding whether to transfer venue, a decision that "is committed to the district court's sound discretion," the Court makes two inquiries: "(1) whether the claims might have been brought in the transferee forum, and (2) whether the interest of justice and convenience of the parties and witnesses justify transfer to that forum." Koh v. Microtek Intern., Inc., 250 F.Supp.2d 627, 630 (E.D. Va. 2003). The moving party "bears the burden of showing that transfer is proper," JTH Tax, Inc. v. Lee, 482 F.Supp.2d 731, 736 (E.D. Va. 2007), and "must also demonstrate that transfer does more than merely 'shift the inconvenience' to the other party," id. (quoting DMP Corp. v. Fruehauf orp., 617 F.Supp. 76, 77 (W.D. N.C. 1985)).

         A. Proper Venues

         The Court must first determine whether the plaintiffs could have brought their claims in the Middle District of Florida or the District of Delaware. Because the Clayton Act provides special jurisdiction and venue requirements for private antitrust actions, including claims under the Sherman Act, the general venue provisions of 28 U.S.C. § 1391 do not apply here. See 15 U.S.C. § 22. Under the Clayton Act, a plaintiff may bring suit either "in the judicial district whereof [the defendant] is an inhabitant" or "in any district wherein [the defendant] may be found or transacts business." Id. "To be found in a district for the purposes of the venue section of the Clayton Act, a corporation must have duly authorized officers and agents carrying on the business of the corporation within the district." Reynolds Metals Co. v. Columbia Gas Sys., Inc., 669 F.Supp. 744, 747 (E.D. Va. 1987).

         Here, each defendant "may be found" and "transacts business" in the Middle District of Florida.[7] 15 U.S.C. § 22; see Reynolds Metals Co., 669 F.Supp. at 747. Thus, venue would have been proper in the Middle District of Florida. Furthermore, the defendants are both incorporated in Delaware and thus "inhabitants" of Delaware. See In re Automotive Reflnishing Paint Antitrust Litig., 358 F.3d 288, 293 n.6 (3d. Cir. 2004) ("Being an 'inhabitant' is held to mean incorporated under the laws of that jurisdiction."). Accordingly, venue also would have been proper in the District of Delaware. Because the plaintiffs could have brought their claims in either the Middle District of Florida or the District of Delaware, Masonite satisfied the first requirement under § 1404(a).

         B. Factors to ...


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