Thursday, March 4, 2021
The 4th Circuit’s decision in Steves and Sons Inc. v. JELD-WEN Inc.
1 affirmed a district court’s order compelling an acquirer to divest the business of a competitor, which the court held had been acquired in violation of Section 7 of the Clayton Act.
2 The court described the case as the first instance in which a private party successfully compelled divestiture of a completed acquisition. Government antitrust enforcers commonly obtain divestiture orders in Section 7 cases. Private parties have previously succeeded in enjoining mergers before closing. Moreover, in California v. American Stores Co.,
3 the Supreme Court declared that private parties could obtain divestiture orders. However, private plaintiffs seeking divestitures have customarily been foreclosed by equitable defenses, such as (i) laches because of delays in initiating suit, (ii) the availability of damages or less-drastic equitable relief, or (iii) the greater damage dives
Tuesday, March 2, 2021
The recent decision of the U.S. Court of Appeals for the Fourth Circuit in Steves & Sons, Inc. v. JELD-WEN, Inc., 2021 WL 630521 (4th Cir. Feb. 18, 2021), is noteworthy for its affirmance of the trial court’s unusual grant of the equitable remedy of divestiture in a private antitrust suit brought by a customer challenging a merger of competing suppliers. That challenge was brought under Section 16 of the Clayton Act, 15 U.S.C. § 26, and followed a merger consummated four years before the plaintiff’s complaint.
While divestiture is a commonly sought remedy in government enforcement actions brought by the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ), the Fourth Circuit observed that “private suits seeking divestiture are rare and, to our knowledge, no court had ever ordered divestiture in a private suit before this case.” Steves & Sons, Inc., 2021 WL 630521, at 5; see also id. at