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

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

March 13, 2019

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 JELD-WEN, INC.'S RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW AGAINST STEVES & SONS, INC. (ECF No. 1821) (the "Motion") . For the following reasons, the Motion will be denied.

         BACKGROUND

         The factual and procedural background underlying this dispute has been addressed in detail in previous opinions. See First Summary Judgment Op. (ECF No. 1424) at 2-16; Second Summary Judgment Op. (ECF No. 1581) at 2-3. Thus, it is necessary only to provide a brief summary of the history for context.

         Steves and Sons, Inc. ("Steves") is an independent manufacturer of interior molded doors, and it relies primarily on JELD-WEN, Inc. ("JELD-WEN") to supply it with doorskins, which are used to make the doors. In 2012, JELD-WEN acquired CraftMaster Manufacturing, Inc. ("CMI"). The proof about the doorskin market before the acquisition, and the substantial lessening of competition in the doorskin market that the acquisition caused is set forth in the divestiture opinion. See generally Memorandum Opinion (ECF Nos. 1783 [redacted] and 1784 [under seal]). That Memorandum Opinion is incorporated herein by reference.

         In 2016, Steves filed an action against JELD-WEN alleging, among other claims, a federal antitrust claim and several breach of contract claims. Those claims were tried to a jury in January 2018. The jury returned a verdict in favor of Steves on the antitrust and breach of contract claims. The Motion is directed only to the antitrust claims.[1]

         DISCUSSION

         Motions for judgment as a matter of law are governed by Fed.R.Civ.P. 50. The question is whether a reasonable jury has "a legally sufficient evidentiary basis" to find in favor of the nonmoving party. Fed.R.Civ.P. 50(a). After a jury verdict has been returned, judgment as a matter of law shall be granted only when there is no legally sufficient evidentiary basis for a reasonable jury to find in favor of the nonmoving party. See Weisgram v. Marley Co., 528 U.S. 440, 453-54 (2000); Int'l Ground Transp. v. Mayor of Ocean City, 475 F.3d 214, 218 (4th Cir. 2007); 9B Fed. Prac. & Proc. Civ. § 2524 (3d ed.) . The Court views all evidence in a light most favorable to the nonmoving party, drawing all legitimate inferences in that party's favor and in support of the jury's verdict. Mayor of Ocean City, 475 F.3d at 218. JELD-WEN presents three reasons[2] why judgment as a matter of law should be entered in its favor. They are:

I. JELD-WEN is entitled to judgment on Steves' antitrust claim because the evidence presented did not allow the jury to conclude that the 2012 acquisition caused Steves' claimed injury or provide a legally sufficient basis for measuring damages;
II. JELD-WEN is entitled to judgment as a matter of law on Steves' Section 4 antitrust claim because Steves did not prove the required element of antitrust injury; and
III. Steves has not established a proper antitrust market, any injury to competition, or that any competitive harms outweighed the efficiencies from the acquisition.

         Each will be considered in turn.

         I. Steves Proved that the 2012 Acquisition of CMI Caused Steves' Claimed Injury and Provided a Legally Sufficient Basis for Measuring the Damages Sought by Steves

          The ORDER (ECF No. 1042), by denying the arguments presented by JELD-WEN in JELD-WEN, INC.'S MOTION FOR JUDGMENT AS A MATTER OF LAW AGAINST STEVES & SONS, INC. (ECF No. 968), held that: (1) Steves had presented sufficient evidence from which a jury could find that the acquisition of CMI in 2012 by JELD-WEN caused the injuries asserted by Steves; and (2) Steves' evidence had provided a legally sufficient basis for measuring damages. Having considered the entire record and the briefs addressed to the Motion on the resurrection of that argument, the Court remains of the view that Steves' proved both antitrust injury and its damages by a preponderance of the evidence.

         Steves presented substantial evidence that JELD-WEN doorskin prices increased after the merger, which included prices charged to Steves.[3] Steves also showed convincingly that JELD-WEN, Masonite, and CMI competed aggressively for Steves' business before the merger[4] and that the pre-merger competition ended after the merger.[5] Additionally, Steves proved that JELD-WEN's price increases were not caused by higher costs or by capacity shortages.[6] The evidence offered by Steves included internal documents showing that JELD-WEN fully understood how the acquisition had given it significant market power over its customers.[7] In a memorandum from Onex, the investment bank that owned JELD-WEN, Onex observed that the "acquisition of CM I made [JELD-WEN] and Masonite the only two manufacturers of [doorskins] in North America, which over time will improve our pricing power." PTX-206 at ONEX66413. An email exchange between JELD-WEN officials explained that, after the merger, JELD-WEN's customers had "few options." PTX-250.

         JELD-WEN contends that Steves did not offer evidence of doorskin prices that it would have paid or the reimbursements that it would have received "but-for" the 2001 acquisition of CMI. That is incorrect. Professor Shapiro analyzed the way competition worked before the merger to identify a baseline against which the observed effects in the market could be judged. He explained fully how competition had occurred in the market before the merger, including price competition among JELD-WEN, CMI, and Masonite.

         Professor Shapiro then explained JELD-WEN's acquisition of CMI had affected competition. He began by analyzing the relevant market shares and market concentration information traditionally used by economists to compare the actual world (the world with the merger) to the "but-for" world (the world without the merger). Trial Tr. 2390:17-2391:4 (ECF No. 1036). He opined that the merger's effects on market shares and market concentration provided the ...


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