Kim Gale  |  December 4, 2018

Category: Consumer News

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Jeld-Wen doors and Masonite Corp. are facing a lawsuit alleging the companies have committed antitrust violations.

Plaintiff Grubb Lumber Co. Inc. accuses Jeld-Wen doors and Masonite of gobbling up smaller retailers and using their control of 85 percent of the market to fix prices.

Jeld-Wen and Masonite are the largest manufacturers of interior molded doors, which are made of composite wood covered by a “doorskin” that wraps around and gives the door the appearance of solid wood. Jeld-Wen and Masonite are the only makers of doorskins, which consist of high-density fibrous mats that are pressed into a raised panel design.

By using doorskins on pressed wood or hollow doors, the doors are much lighter, which makes them easier to ship.

In 2014, Masonite released a statement that it would stop selling doorskins to other door makers, alleges the antitrust violation lawsuit.

At that point, Jeld-Wen doors became the only doorskin manufacturer selling doorskins to other door makers. The antitrust violation lawsuit alleges Jeld-Wen promptly started to create cheaper doorskins, but raised its prices because no competition existed to stop them.

Jeld-Wen doors allegedly raised the prices of the doorskins even though Jeld-Wen’s own manufacturing costs had lowered.

“Defendants’ price increases alleged herein cannot rationally be explained by normal market forces, such as key input costs or supply and demand factors. The largest input cost of interior molded doors are interior molded doorskins. Since defendants are vertically integrated, they control those costs and their price increases have outpaced any increase to their raw material and other costs,” says Grubb Lumber’s complaint.

Jeld-Wen Doors and Masonite Met Behind Closed Doors

The antitrust violation lawsuit alleges top executives of Jeld-Wen and Masonite met and came to an agreement to fix prices back in 2012. The two companies purportedly took turns increasing prices and matching the other’s price increases over the years.

“In all instances, the price increase was quickly followed by an announcement from the other manufacturer matching the price increase,” alleges Grubb Lumber.

The alleged 2012 deal that violates antitrust laws was reached after Jeld-Wen and Masonite acquired a number of smaller manufacturers between 2001 and 2012.

Healthy competition of goods is needed to ensure companies create quality products at competitive prices. Retailers depend upon manufacturers to work independently of one another and not collude to rig the prices they must pay to fill their stores with goods for consumers.

For example, if a door costs $50 to make, the manufacturer might sell the door to a retailer for $60 to make a $10 profit. The retailer might shop around to make sure the $60 wholesale price is the best deal for the best craftsmanship. The retailer then might sell the door to consumers for $70 to make its own $10 profit.

However, let’s say a door costs $50 to make and the manufacturer tries to sell the door to a retailer for $100. The retailer shops around, but finds the only other place to buy such a door also sells the door for $100. The retailer is stuck paying a lot more than he would have to if the two manufacturers had any true competition. A retailer who pays $100 wholesale price for a door will have to charge the consumer more than $100 to turn any profit at all.

The Jeld-Wen Doors Lawsuit is Grubb Lumber Co. Inc. v. Masonite Corp., et al., Case No. 3:18-cv-00718, in the U.S. District Court for the Eastern District of Virginia.

Join a Free Interior Molded Doors Class Action Lawsuit Investigation

If you own or work for a company that sold Jeld-Wen and/or Masonite interior molded doors from October 2012 to the present or if you purchased the doors from a retailer, you may have been the victim of an antitrust price-fixing conspiracy. Legal help is available.

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