What’s a doorskin? It’s a part of the most popular type of interior door sold in North America, the interior molded door. The complaint for this class action claims that Masonite Corporation and Jeld-Wen, Inc. violated antitrust laws despite a US Department of Justice (DOJ) effort to avoid this.
The class for this action is all persons or entities who bought interior molded door in the US, between at least October 24, 2012 and the present, directly from (1) either Masonite or Jen-Weld, their subsidiaries, affiliates or joint ventures (Subclass 1) or (2) Jen-Weld, its subsidiaries, affiliates, or joint ventures.
Interior molded doors are made by using a wood frame and a hollow or solid core between two “doorskins.” The doorskins are outer panels molded to look like solid wood. The doorskins are the most expensive part of an interior molded door.
The two defendants in this case, Masonite and Jen-Weld, make interior molded doors and control around 85% of the market. Even more importantly, the complaint claims they are the only two integrated makers of interior molded doors (companies that make the complete doors) and they are the only makers of doorskins in North America.
The DOJ wanted to avoid a lack of competition, the complaint says, so it allowed Premdor, Inc., a non-integrated maker of the doors, to acquire Masonite only if it gave up a doorskin plant that would become a separate doorskin maker called CMI. However, Jen-Weld acquired CMI in 2012. In the meantime, both Masonite and Jen-Weld had been acquiring other, smaller companies.
How did they try to corner the market and establish a monopoly? The complaint says that in 2014 Masonite stopped selling doorskins to other door makers, even though this was against its own interests. This left Jen-Weld as the only seller to other makers.
At the same time, the complaint says, “Jen-Weld began taking adverse actions against third-party door manufacturers with which it had long-term supply agreements for doorskins by, among other things, raising prices notwithstanding its own declining costs.” It also said it would terminate its agreement with another buyer, even though this violated the agreement.
These actions made it difficult for independent interior molded door makers to compete with the two companies. The complaint further alleges that the two “communicated regularly regarding their pricing intentions.” A Masonite vice-president told as much to a co-worker, the complaint says, saying further that Masonite never undercut Jen-Weld’s interior molded door prices. In the meantime, the complaint claims, Jen-Weld also gave up efforts to increase market share and concentrated on what it called “pricing optimization”—that is, price increases.
The complaint claims that the price increases can’t be explained by normal market forces, such as the costs of raw materials or energy. According to the complaint, the increases were the result of anticompetitive actions and customers paid more than they would have without the companies’ collusion.