E. John Steren, Member of the Firm, co-presents “Antitrust Remedies: Divestiture Actions Pre- and Post-Merger, Implications of Steves & Sons v. JELD-WEN,” a live CLE webinar hosted by Strafford.
This CLE webinar analyzes the recent Fourth Circuit Court decision in Steves & Sons Inc. v. JELD-WEN Inc. and its endorsement of divesture as a remedy in private antitrust actions. In addition, the panel discusses the previous use of divestiture as a remedy in government-initiated actions and how the case expands the remedy to private actions while also extending the timeframe after closing of a merger in which such actions may be pursued.
On Feb. 18, 2021, in Steves & Sons Inc. v. JELD-WEN Inc. (Steves), 988 F.3d 690 (4th Cir. 2021), the Fourth Circuit Court upheld an unprecedented divestiture order in an antitrust case brought by a private plaintiff. Because it is the first time the divesture remedy was granted in a private case, the case has significant implications for private antitrust as well as M&A practice going forward.
Divestiture is a customary form of relief in Clayton Act Section 7 enforcement actions brought by the FTC or the Antitrust Division of the DOJ. In Steves, the court reasoned those remedies would be inadequate. Instead, only divestiture of certain assets by JELD-WEN would solve the pricing duopoly resulting from its merger with CMI. While the facts of Steves are unique, the court’s reasoning could be applied in many other scenarios.
Steves is also notable because the action was filed four years after the transaction in question closed. The Fourth Circuit affirmed the trial court’s conclusion that JELD-WEN failed to establish unreasonable delay by the plaintiff in initiating the lawsuit or prejudice to the defendant. Hence, the required elements of a laches defense were not present. The court’s analysis could be applied to future public as well as private actions.
The panel discusses this ground-breaking decision and how it may affect private antitrust actions going forward.
- Why has divestiture historically been granted only in antitrust enforcement actions brought by government agencies?
- What remedies have traditionally been granted to private plaintiffs in antitrust actions?
- Why was divestiture deemed to be the only appropriate remedy in the Steves case?
- After Steves, what are the limitations on how long a private party can wait to bring an action contesting a merger?
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