By Sheri A. Wattles-Miller
To win preliminary approval of a proposed settlement, interior door purchasers told to resubmit settlement documents with expert reports in price fixing class action.
Direct and indirect purchasers of interior molded doors (IMDs) were required to resubmit proposed orders for preliminarily approval of settlements with manufacturers Jeld-Wen, Inc., and Masonite Corporation with expert reports that the defense sought to seal publicly available. A related September 3 unsealing order had been appealed to the U.S. Court of Appeals in Richmond, Virginia, and, although the court could not rule on the defendants’ motion to reconsider the order, it issued an indicative ruling stating that it stood by the unsealing order. In addition, because it did not have jurisdiction, it deferred ruling on motions to intervene filed by several IMD distributors (In Re: Interior Molded Doors Antitrust Litigation, December 10, 2020, Gibney, J.).
Background. Jeld-Wen and Masonite (the "defendants") sell most of the IMDs in the United States. Two groups of purchasers—direct purchasers consisting primarily of home improvement suppliers, and indirect purchasers that bought doors from wholesalers or home improvement suppliers—contended that the defendants' anti-competitive conduct drove up the prices they paid for IMDs. The purchasers noted a pattern of "lockstep" price increases on the part of the defendants.
In order to support class certification, the purchasers consulted expert witnesses who reported on the operation of the defendants' businesses, including historic pricing information. During discovery, the parties designated much of the information provided by the experts to be "confidential." Subsequently, defendants asked the court to seal the "confidential" parts of the expert witness reports. On September 3, the court largely denied the motions to seal.
Motions to reconsider unsealing order. In response to the September 3 unsealing order, the defendants filed motions to reconsider, which the court denied. Next, the defendants filed notices of appeal of the unsealing order, and the court stayed enforcement of the September 3 order. The defendants again filed motions to reconsider the order, narrowing the scope of the information it wished to seal to the expert reports and information related to pricing practices. Although the court could not actually rule on the motions to reconsider, it issued an indicative order, in which stood by its order to unseal the documents.
Unsealing expert reports and historic pricing information. Common law and the First Amendment of the U.S. Constitution give the public a right to access judicial records. Under common law, the interest of the party asking to seal records must "heavily outweigh" the public interest in access to the information. Under the First Amendment, "judicial records" are defined as being relevant to the performance of the judicial function and useful in the judicial process. Closure of records requires a compelling government interest, and denial of access to records must be narrowly tailored to serve that interest.
Here, the defendants' reason for requesting the information be sealed was self-interest, the court said. Moreover, for the court to grant preliminary approval of the settlement, it had to find probable cause that the proposal fell within the range of permissible settlements that meet the standards of fairness, reasonableness, and adequacy. This analysis would be based, in part, on the expert witness reports. Prospective class members also have an interest in the historical pricing information as they decide whether to join the class. Finally, sealing the expert reports would be contrary to the public interest of transparency in judicial proceedings.
Settlement approval. Although the court stated that some of the terms of the settlements were "hard to stomach," and cited to "credible evidence of misconduct" in the expert witness reports, the court preliminarily approved the settlements. However, noting that evidence in the reports included lockstep price hikes, multiple opportunities for collusion, and enormous damages, the court required that the proposed settlement documents be resubmitted with the expert reports available as part of the notification to potential class members.
The case is No. 3:18-cv-00718-JAG.
Attorneys: Christine A. Williams (DurretteCrump PLC) for Grubb Lumber Company, Inc. Anand Vijay Ramana (Vedder Price PC) and Oren Giskan (Giskan Solotaroff & Anderson LLP) for Huttig Building Products, Inc. Ryan Joseph Walsh (Eimer Stahl LLP) for Masonite Corp.
Companies: Masonite Corp.; Huttig Building Products, Inc.; Grubb Lumber Company, Inc.
MainStory: TopStory Antitrust VirginiaNews GCNNews
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