Antitrust Law Daily Wrap Up, ANTITRUST—E.D. La.: $6M settlement between direct purchasers, pool product makers receives final approval, (Jan 21, 2016)

By Linda O’Brien, J.D., LL.M.

The federal district court in New Orleans has given final approval to a $6 million settlement between pool product maker Pentair Water Pool and Spa and direct pool product purchasers. The settlement would resolve claims against Pentair over its alleged role in a conspiracy involving Pool Corporation—the country’s largest distributor of pool products—and other pool products manufacturers (In re Pool Products Distribution Market Antitrust Litigation, January 20, 2016, Vance, S.).

Pentair Water Pool and Spa, Inc., Hayward Industries, Inc., and Zodiac Pool Systems, Inc. are the three largest manufacturers of pool products in the United States. After an FTC investigation into Pool Corporation’s alleged unfair methods of competition resulted in a consent decree, pool product purchasers filed suit against the three manufacturers and Pool Corp., claiming that the defendants engaged in a price fixing conspiracy.

A nearly $10 million settlement between the purchasers, Hayward, and Zodiac received final approval in June 2015. Since then, Pentair and the purchasers reached a $6 million settlement, from which notice and administration costs, attorney fees and expenses of up to $2 million, incentive awards, class member benefits, and any remaining administration expenses and costs would be paid. Preliminary approval of the settlement was granted in August 2015. The purchasers sought final approval of the proposed settlement.

Settlement class. For purposes of the settlement, the court certified a class of direct purchasers from the defendants between November 22, 2007 and November 21, 2011. After considering evidence from the fairness hearing on January 8, the court found the settlement to be fair, reasonable, and adequate.

There was no evidence of fraud or collusion in the settlement negotiations, and agreement was reached after multiple formal mediation sessions with a mediator, as well as settlement conferences with the magistrate judge. The provision for Pentair’s release from all claims was not impermissibly broad and was consistent with other class action settlements. The court also noted that the settlement did not give preferential treatment to the class representatives or any segment of the class. No class members objected to the fairness of the settlement, the allocation plan, or the attorneys’ fee request for one-third of the settlement.

Additionally, the settlement avoids the risks and burdens of potentially protracted litigation, guarantees some recovery for class members, and occurred after extensive fact discovery, during which the parties obtained sufficient information to evaluate the merits of their positions. The settlement was pegged at a fair point in the range of potential recovery, taking into account the risks present in the litigation, the court determined.

Finally, the court concluded that the sum of one-third of the settlement fund for reimbursement of expenses requested by class counsel was fair. No class members objected, and the settlement was reached after fact and expert discovery and review of over four million documents was complete.

The case is No. 2:12-cv-02328-SSV.

Attorneys: Camilo Kossy Salas, III (Salas & Co., LC) and Russ M. Herman (Herman, Herman, Katz & Cotlar, LLP) for Direct Purchaser Plaintiffs' Liaison Counsel. Thomas J. H. Brill (Law Office of Thomas H. Brill) for Indirect Purchaser Plaintiffs' Liaison Counsel. Wayne J. Lee (Stone, Pigman, Walther, Wittmann, LLC) for Manufacturer Defendants' Liaison Counsel.

Companies: Pool Corporation; Hayward Industries, Inc.; Pentair Water Pool and Spa, Inc.; Zodiac Pool Systems, Inc.

Cases: Antitrust LouisianaNews