The American Lawyer named Benjamin Horwich a runner-up as Litigator of the Week for his representation of Steves & Sons in a closely-watched matter that led to a precedent-setting victory on appeal in the Fourth Circuit for Munger Tolles and its client.
The case Steves & Sons, Inc. v. JELD-WEN has been closely watched by the antitrust bar for years because it was the very first time a court-ordered divestiture has resulted from a private merger challenge (as distinguished from challenges brought by government enforcers). As the Fourth Circuit itself noted, “private suits seeking divestiture are rare and, to our knowledge, no court had ever ordered divestiture in a private suit before this case.”
Following a groundbreaking decision on behalf of our client in a 2018 antitrust trial, Munger, Tolles & Olson served as lead appellate counsel in the Court of Appeals for the Fourth Circuit, defending the lower court’s ruling. In the district court, our client, family-owned door manufacturer Steves & Sons, prevailed against JELD-WEN, a supplier of building products.
The jury found that JELD-WEN violated Section 7 of the Clayton Act, which bans mergers that substantially lessen competition, by acquiring CraftMaster International in 2012. The jury in the district court in Virginia initially found in favor of Steves on all claims, and awarded Steves damages and future lost profits; after the jury trial, the district court announced its equitable ruling, which ordered JELD-WEN to divest a key factory in Pennsylvania, the primary asset acquired in JELD-WEN’s 2012 acquisition of CraftMaster. That ruling is believed to be the very first time that a U.S. court has permitted divestiture as a remedy in private litigation for a merger that has already closed. Munger, Tolles & Olson antitrust attorneys litigated the jury trial and equitable proceedings, with advice from appellate colleagues.
JELD-WEN appealed, bringing in former Solicitor General Paul Clement of Kirkland & Ellis as appellate counsel. At stake in the appeal was nothing less than Steves’ survival after 155 years in business, and the shape of the interior door industry. The case has also attracted significant attention from the United States Department of Justice, which filed an amicus brief supporting Steves & Sons).
On Feb. 18, 2021, the Fourth Circuit affirmed the district court’s first-of-its-kind divestiture order. The three-judge panel largely held against JELD-WEN, rejecting nearly every argument it raised on appeal, siding with JELD-WEN only on an issue relating to damages in the event divestiture does not occur, and on a procedural issue involving certain trade secret claims unrelated to the core antitrust issues. When implemented, the divestiture decision will restore competition to the industry, and allow the continued success of a family business that dates back to the Civil War era.
Read the American Lawyer’s Litigator of the Week series here.
The Munger, Tolles & Olson team which represented Steves & Sons in this matter include Benjamin Horwich, Glenn Pomerantz, Ted Dane, Kyle Mach, Kuruvilla Olasa, Emily Curran-Huberty and April Hu.
Co-counsel on this matter includes Lewis F. Powell III, John S. Martin, Maya M. Eckstein and R. Dennis Fairbanks of Hunton Andrews Kurth, LLP and Marvin G. Pipkin of Pipkin & Kloppe-Orton, LLP.
Law360, 4th Circ. Upholds Private Parties' Right To Challenge Mergers, published on Feb. 18 2021
Bloomberg Law, Divestiture OK’d in Private Antitrust Case in Novel Ruling, published on Feb. 18, 2021