Nixon Peabody LLP

  • People
  • Capabilities
  • Insights
  • About

Trending Topics

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni

    Practices

    View All

    • Affordable Housing
    • Community Development Finance
    • Corporate & Finance
    • Cybersecurity & Privacy
    • Environmental
    • Franchising & Distribution
    • Government Investigations & White Collar Defense
    • Healthcare
    • Intellectual Property
    • International Services
    • Labor & Employment
    • Litigation
    • Private Wealth & Advisory
    • Project Finance
    • Public Finance
    • Real Estate
    • Regulatory & Government Relations

    Industries

    View All

    • Cannabis
    • Consumer
    • Energy
    • Entertainment
    • Financial Services
    • Healthcare
    • Higher Education
    • Infrastructure
    • Manufacturing
    • Non Profit
    • Real Estate
    • Technology

    Value-Added Services

    View All

    • Alternative Fee Arrangements

      Developing innovative pricing structures and alternative fee agreement models that deliver additional value for our clients.

    • Continuing Education

      Advancing professional knowledge and offering credits for attorneys, staff and other professionals.

    • Crisis Advisory

      Helping clients respond correctly when a crisis occurs.

    • DEI Strategic Services

      Providing our clients with legal, strategic, and practical advice to make transformational changes in their organizations.

    • eDiscovery

      Leveraging law and technology to deliver sound solutions.

    • Global Services

      Delivering seamless service through partnerships across the globe.

    • Innovation

      Leveraging leading-edge technology to guide change and create seamless, collaborative experiences for clients and attorneys.

    • IPED

      Industry-leading conferences focused on affordable housing, tax credits, and more.

    • Legal Project Management

      Providing actionable information to support strategic decision-making.

    • Legally Green

      Teaming with clients to advance sustainable projects, mitigate the effects of climate change, and protect our planet.

    • Nixon Peabody Trust Company

      Offering a range of investment management and fiduciary services.

    • NP Capital Connector

      Bringing together companies and investors for tomorrow’s new deals.

    • NP Second Opinion

      Offering fresh insights on cases that are delayed, over budget, or off-target from the desired resolution.

    • NP Trial

      Courtroom-ready lawyers who can resolve disputes early on clients’ terms or prevail at trial before a judge or jury.

    • Social Impact

      Creating positive impact in our communities through increasing equity, access, and opportunity.

    1. Home
    2. Insights
    3. Alerts
    4. It’s not over until it’s over: Fourth Circuit upholds divestiture order in private party’s antitrust challenge to long-consummated mergerAlerts

    Alert / Antitrust Alert

    It’s not over until it’s over: Fourth Circuit upholds divestiture order in private party’s antitrust challenge to long-consummated merger

    Feb 23, 2021

    Share

    By Gordon Lang

    The United States Court of Appeals for the Fourth Circuit has held in a private antitrust case that a defendant must divest assets it obtained in a merger that violated Section 7 of the Clayton Act—the first divestiture order, the court said, imposed in a merger case brought by a private plaintiff.[1]

    Jeld-Wen, CMI, and another competitor, were the three makers of “doorskins,” an outer layer for molded doors. The three firms sold the doorskins to independent door makers—such as Steves—and also to finish their own molded doors. In October 2012, following the closing of a U.S. Department of Justice investigation, Jeld-Wen and CMI merged. The Department of Justice investigated the merger again in early 2016, and again took no action. In July 2016, almost four years after the merger, Steves sued Jeld-Wen, contending the merger violated Section 7 of the Clayton Act, 15 U.S.C. § 18. A jury subsequently found for Steves, and the district court, among other things, ordered Jeld-Wen to divest the doorskins plant it had acquired from CMI.

    On appeal, the Fourth Circuit addressed a number of issues, and most importantly here, upheld the order requiring Jeld-Wen to sell the former CMI plant at auction. Jeld-Wen argued that divestiture was improper because, among other things, Steves had waited too long to bring its case, any potential future harm to Steve’s could be remedied by requiring Jeld-wen to sell doorskins to Steves, and that Steves might buy the plant at auction. The court disagreed and found the delay was reasonable: Steves would not have known about any damage to it until 2014, and it had then pursued alternate dispute mechanisms and sought and cooperated with a DOJ investigation before bringing suit. The court rejected the notion that requiring Jeld-Wen to sell doorskins to Steves was sufficient relief—it found that it was a short-term solution and would not remedy harm to the public and door makers other than Steves. Finally, although the court wrote that a divestiture to Steves, as opposed to a firm that was not a door maker was not ideal, it concluded that even three vertically integrated doorskin makers was better than two. The merger was thus, according to the court, a “poster child for divestiture.”

    There have, of course, been other challenges against consummated mergers by private parties, as well as state attorneys general and the FTC and DOJ. But, Jeld-Wen is the first case to order divestiture at the behest of a private plaintiff—and it is notable that the court did so when the merger at issue closed almost nine years ago. It will be interesting to see how other courts will address private party divestiture requests. Jeld-Wen says it will appeal the court’s decision. In the meantime, Jeld-Wen is a reminder that sometimes it really isn’t over until it’s over.


    1. Steves & Sons, Inc. v. Jeld-Wen, Inc., No. 19-1397, 2021 U.S. App. LEXIS 4733 (4th Cir. Feb. 18, 2021).
      [Back to reference]

    Practices

    M&A and Corporate TransactionsPrivate Equity & Investment FundsSecurities & Capital MarketsGovernment Investigations & White Collar DefenseAntitrust

    Insights And Happenings

    • Alert

      SEC staff limits ability of public companies to exclude shareholder proposals

      Nov 24, 2021
    • Alert

      The SEC plans more aggressive enforcement-securities-fraud strategy

      Nov 12, 2021
    • Alert

      Senator Grassley’s proposed amendments to the False Claims Act address Escobar and DOJ’s “Granston Memo”

      July 29, 2021

    Subscribe to stay informed of the latest legal news, alerts, and business trends.Subscribe

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    • © 2023 Nixon Peabody. All rights reserved
    • Privacy Policy
    • Terms of Use
    • Statement of Client Rights
    • Supplier Diversity Program
    • Nixon Peabody International LLC
    • PAL