Antitrust Law Daily Wrap Up, ANTITRUST—J.P.M.L.: Suits over alleged propane exchange tank collusion centralized, (Oct 21, 2014)

By Jeffrey May, J.D.

Actions against Ferrellgas Partners, L.P (doing business as Blue Rhino) and UGI Corporation and AmeriGas Partners, L.P. (doing business as AmeriGas Cylinder Exchange) for conspiring to fix the price of propane sold in exchange tanks have been consolidated in the federal district court in Kansas City, Missouri, for coordinated pretrial proceedings. The Judicial Panel on Multidistrict Litigation (JPML) assigned the litigation to Judge Gary A. Fenner, who had overseen now-settled multi-district litigation against the defendants over representations about the volume of propane in their tanks (In re: Pre-Filled Propane Tank Antitrust Litigation, October 16, 2014, Heyburn, J.).

A number of private actions were filed against the propane exchange tank distributors after the FTC issued an administrative complaint against AmeriGas and Blue Rhino. In its March 2014 complaint, the agency alleged that the firms colluded to force their joint customer, Walmart, to accept a reduction in the amount of propane contained in propane exchange tanks from 17 pounds to 15 pounds, without a corresponding reduction in the wholesale price. Walmart is said to be the largest U.S. propane exchange tank retailer. That matter has since been withdrawn from adjudication to allow the Commission to consider a settlement. However, no proposed consent order has yet been announced.

The JPML concluded that the private actions involved common questions of fact and that centralization in the Western Division of the Western District of Missouri would serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. Defendants AmeriGas and Blue Rhino supported centralization in the Western Division of the Western District of Missouri. Moreover, there were 13 actions pending in the Western District of Missouri, and Blue Rhino was headquartered in nearby Kansas City, Kansas. According to the JPML, the forum provided an easily accessible location for all parties and a judge who was familiar with the facts, issues, parties, and some of the counsel involved in the litigation.

Request to restrict litigation to Sherman Act claims. The JPML decided not to restrict the litigation to claims under the Sherman Act. Instead, it would leave to the transferee judge the manner and extent of coordination or consolidation of pretrial proceedings. The plaintiffs in a potential tag-along action had opposed inclusion of their action in centralized proceedings and requested that the MDL be limited to Sherman Antitrust Act claims. Because that action was not currently before the JPML, the plaintiffs in that case would have an opportunity to object to transfer once the action was placed on a conditional transfer order, it was noted.

A putative class action on behalf of consumers of propane exchange tanks pending in federal district court in Kansas and a putative class action on behalf of direct purchasers of propane in propane exchange tanks for resale pending in the Central Division of the Western District of Missouri were among the actions transferred to the Western District of Missouri.

The case is MDL No. 2567.

Attorneys: Barrett J. Vahle (Stueve Siegel Hanson LLP) for Mario Ortiz. Catesby A. Major (Bryan Cave LLP) for Ferrellgas Partners, LP, and Ferrellgas LP. Brandon J.B. Boulware (Rouse Hendricks German May) for AmeriGas Partners, LP, and UGI Corp. Anne E. Gepford Smith (Shaffer Lombardo Shurin PC) for Glenville Shell LLC. Brent W. Landau (Hausfeld LLP) for Hartig Drug Co., Inc. Chris Hellums (Pittman, Dutton & Hellums, PC), Jonathan M. Shaw (Seyfarth Shaw LLP), and Thomas V. Bender (Walters Bender Strohbehn & Vaughan, PC) for Jason Moore's Texaco, LLC.

Companies: Ferrellgas Partners, LP; Ferrellgas LP; AmeriGas Partners, LP; UGI Corp.; Glenville Shell LLC; Hartig Drug Co., Inc.; Jason Moore's Texaco, LLC

Cases: Antitrust