Steves and Sons Doors Lawsuit: Verdict, Appeal, and Divestiture

The Steves and Sons doors lawsuit against JELD-WEN was a private antitrust case in which a family-owned Texas door manufacturer challenged JELD-WEN’s 2012 acquisition of a competing doorskin supplier and won the first-ever court-ordered divestiture in a private merger challenge under Section 7 of the Clayton Act. Filed in 2016 in the U.S. District Court for the Eastern District of Virginia, the case produced a jury verdict against JELD-WEN, an order forcing it to sell the Towanda, Pennsylvania, plant it had bought, and eventually a $115 million sale of that facility to Woodgrain Inc. in January 2025.¹

Why Steves Sued

Steves and Sons is a sixth-generation, family-owned door manufacturer headquartered in San Antonio, Texas, and one of the largest independent door makers in the country.² Like other independents, Steves did not make its own doorskins, the thin molded panels that form the front and back of an interior door. It bought them from suppliers that also competed with Steves in finished doors.

For years, three companies made doorskins in the United States: Masonite, with about 46 percent of the market; JELD-WEN, with about 38 percent; and CraftMaster Manufacturing (CMI), with about 16 percent.³ In October 2012, JELD-WEN bought CMI, cutting the suppliers from three to two. The Department of Justice opened a preliminary investigation but closed it in September 2012 without action, and Steves did not initially object because its supply contract included price protections tied to raw material costs.⁴

The relationship deteriorated quickly. Beginning in 2012, Steves reported quality problems with JELD-WEN’s doorskins, and internal JELD-WEN records showed other independents were complaining too. JELD-WEN raised doorskin prices for Steves in 2013, 2014, and 2015 while its own costs were falling; Steves’ expert estimated the overcharges came to nearly 8 percent.⁵ In 2014, JELD-WEN also stopped reimbursing customers for the full cost of unsellable doors made with defective skins, refunding only the cost of the skin itself.³

Then, in May 2014, Masonite announced it would stop selling doorskins to independent door makers. A Masonite executive publicly described the move as “the right strategic call” to “make sure that there are some effective barriers to entry” in the molded-door business.⁶ Independent manufacturers now had one source for doorskins: JELD-WEN. Internal JELD-WEN documents acknowledged that the CMI deal left it and Masonite as “the only two manufacturers of facings in North America,” which “over time will improve our pricing power.”³

On June 29, 2016, shortly before the four-year antitrust statute of limitations would have expired, Steves filed suit in the Eastern District of Virginia, alleging the CMI acquisition violated Section 7 of the Clayton Act.⁷ Using the Herfindahl-Hirschman Index, the merger raised market concentration from roughly 3,820 to about 5,000, an increase six times the threshold at which federal enforcers presume a merger is illegal.³

The 2018 Verdict and Divestiture Order

The case went to a twelve-day jury trial in February 2018 before Senior Judge Robert E. Payne. The jury found that the merger violated the Clayton Act and awarded Steves $12.1 million in past damages and $46.4 million in future lost profits. Under the Clayton Act, antitrust damages are automatically trebled, bringing the totals to $36.4 million and $139.4 million, for a combined judgment of roughly $175.8 million.³

After a separate remedies hearing, Judge Payne issued the ruling that made the case a landmark. In October 2018, he ordered JELD-WEN to divest the Towanda, Pennsylvania, doorskin plant it had acquired from CMI, then the second-largest doorskin facility in the world.⁸ Applying the four-factor equitable test from eBay Inc. v. MercExchange, the court found Steves would likely go out of business by September 2021 without the remedy, that monetary damages could not repair the permanent loss of the company, and that restoring a third competitor to the doorskin market served the public interest.⁹ The court characterized JELD-WEN’s conduct as “evasive, sharp, and deceptive” and found that JELD-WEN “regarded Steves, a significant player in the interior door market, to be an independent to be killed off.”

To reduce the impact on JELD-WEN, the court required the eventual buyer of Towanda to supply JELD-WEN with doorskins for two years after the sale, with the auction supervised by a court-appointed special master.⁹

The Department of Justice, which had declined to challenge the merger itself, filed a Statement of Interest in June 2018 supporting Steves and affirming that divestiture is “normally the best way to preserve and restore competition” following an anticompetitive merger.¹⁰

JELD-WEN had counterclaimed that Steves misappropriated 67 of its trade secrets after Steves hired a former JELD-WEN executive as a consultant. A separate jury found only 8 of the alleged secrets were protectable and misappropriated, and awarded JELD-WEN $1.2 million.¹¹

The Fourth Circuit Appeal

JELD-WEN appealed. On February 18, 2021, a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit largely sided with Steves.³ The panel rejected JELD-WEN’s argument that Steves was “dressing up a contract claim in antitrust garb,” finding that without the merger Steves would have bought doorskins in a competitive market, and that the merger produced higher prices, lower quality, and reduced defect reimbursements.¹²

On the remedy, the Fourth Circuit called the case a “poster child” for divestiture. Even if Steves itself acquired Towanda, the court said, “three vertically integrated doorskin manufacturers would be better than two.” The panel agreed that divestiture was actually less intrusive than behavioral alternatives such as ordering JELD-WEN to sell doorskins at a set price for years, which would demand ongoing court supervision.¹² The court also held that the limitations clock did not begin at the merger’s closing in 2012 but in 2014, when Masonite’s exit from the supply market made the injury irreparable.⁹

JELD-WEN’s one significant win on appeal was the vacatur of the $139.4 million future lost profits award. The Fourth Circuit ruled the claim was not ripe because the projected losses would not begin until after September 2021, and the Clayton Act requires “actual injury” before damages can be collected.³

What Steves Received

In August 2021, JELD-WEN announced it would not seek further review and would cooperate with the special master to complete the divestiture. Steves chose to forgo the vacated $139 million future lost profits award and pursue the plant sale instead.¹³

JELD-WEN paid Steves approximately $40 million, made up of the $36.4 million trebled past-damages award plus interest and reimbursement of Steves’ attorney fees. The parties’ existing doorskin supply agreement was extended through the divestiture process, and the eventual buyer of the Towanda plant was required to negotiate a supply agreement with Steves.¹³ Steves was separately ordered to pay JELD-WEN $1.2 million on the trade secrets counterclaim.¹⁴

The Sale of the Towanda Plant

Selling Towanda took longer than anyone expected. Three rounds of bidding stretched from 2021 to 2024, complicated in May 2024 when JELD-WEN asked the court to eliminate the divestiture requirement entirely, arguing that changed market conditions had made the sale unnecessary.¹⁵

JELD-WEN’s argument rested on Steves’ own entry into doorskin manufacturing through a new 400,000-square-foot plant under construction in Athens, Georgia. In a December 19, 2024, opinion, Judge Payne denied the motion. The court found that Steves expected to produce only about one million doorskins in the plant’s first year, rising to roughly 2.1 million by 2027, while the company needs about three million annually. Steves would remain a net buyer of doorskins through at least 2028 and would have no capacity to supply other independents. Without the divestiture, the court concluded, the market would stay a duopoly and JELD-WEN would keep both the incentive and the ability to squeeze independent competitors.¹⁵

On December 13, 2024, Judge Payne overruled JELD-WEN’s objections and adopted the special master’s recommendation to sell Towanda to Woodgrain Inc., a millwork manufacturer that had previously owned the plant.¹⁶ Woodgrain completed the acquisition on January 17, 2025, paying $115 million.¹ The facility is now operating under Woodgrain’s ownership.¹⁷

Why the Case Matters

Before this lawsuit, no private plaintiff had ever obtained a court-ordered divestiture to unwind a completed merger.¹⁸ The rulings set out several points that will shape future private merger challenges. A government decision not to challenge a merger does not shield the deal from a later private suit; the DOJ investigated the JELD-WEN/CMI acquisition twice and walked away, and the court found that irrelevant to the merger’s legality.⁷ The Fourth Circuit confirmed that divestiture is available to private plaintiffs as an equitable remedy under Section 16 of the Clayton Act, even years after a merger closes. And the laches clock does not necessarily start when the merger closes; it may start when the plaintiff first discovers the threatened injury.⁹

Steves used the settlement proceeds to invest in vertical integration. Its Athens, Georgia, doorskin facility is expected to be fully operational in 2026, giving the company the ability to produce its own doorskins for the first time in its history.²

1
JELD-WEN. JELD-WEN Completes Divestiture of Towanda Facility
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GlobeNewsWire. Steves and Sons Celebrates 160 Years of Operation and Legacy
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vLex. Steves and Sons Inc. v. JELD-WEN Inc.
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Jones Day. Antitrust Alert: First Successful Private Antitrust Challenge
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Mintz. Fourth Circuit Affirms District Court’s First-of-Its-Kind Divestiture
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MoloLamken. 4th Circuit Opens Door to New Private Merger Enforcement Era
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IWF Atlanta. Steves and Sons Doors Gets $40M From JELD-WEN in Antitrust Win
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Pietragallo. Poster Child for Divestiture
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Virginia Lawyers Weekly. Steves and Sons Inc. v. JELD-WEN Inc. Memorandum Opinion
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A&O Shearman. Eastern District of Virginia Overrules Objections
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Woodgrain. Woodgrain Completes JELD-WEN Towanda Plant Acquisition
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Faegre Drinker. Groundbreaking Fourth Circuit Decision Upholds Private Plaintiff’s Successful Effort