Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Arkansas municipal system alleges water treatment chemicals price fixing conspiracy, (Nov 3, 2015)

By Edward L. Puzzo, J.D.

Municipal water system Central Arkansas Water has filed a class action lawsuit against water treatment chemical manufacturer General Chemical Corporation, its former executive Frank A. Reichl, and unidentified co-conspirators, alleging their involvement a price fixing and bid rigging conspiracy in the market for liquid aluminum sulfate (LAS), a coagulant used by municipal water treatment facilities to treat drinking and waste water (Central Arkansas Water v. Reichl, October 31, 2015).

The lawsuit, filed in the federal district court in Newark, New Jersey, follows last week’s announcement by the Department of Justice that Frank A. Reichl has pleaded guilty for his role in a 13-year long conspiracy to eliminate competition in the LAS market by fixing prices, rigging bids, agreeing not to compete for contracts, and allocating customers.

Chemtrade Logistics, Inc., the current owner of General Chemical, controls and shares a majority of the North American market for LAS, the complaint alleges. “Due to the commodity characteristics of LAS, a highly saturated market and high barriers to market entry, the LAS market is conducive to anticompetitive collusion by competitors,” the complaint states. The defendants are accused of engaging in a conspiracy in restraint of trade; making them per se liable under Section 1 of the Sherman Act. The defendants are accused of participating in secret communications to discuss LAS business, agreeing to avoid soliciting business from each other’s “historical” LAS customers, and submitting intentionally losing bids to those customers. As a result of the conspiracy, the defendants reaped exorbitant profits from their supra-competitive pricing of LAS.

Central Arkansas Water alleges that, as a result of the conspiracy, it and other direct purchasers of LAS were overcharged millions of dollars in collusive and non-competitive prices. The complaint seeks a judgment for relief including treble damages.

The case is Civil Action No. 2:15-cv-07827-SRC-CLW.

Attorneys: Dianne M. Nast and Erin C. Burns (NastLaw LLC), Michael L. Roberts (Roberts Law Firm, P.A.), Don Barrett (Don Barrett, P.A.), William E. Hoese (Kohn, Swift & Graf, P.C.), Michael Fishbein (Levin, Fishbein, Sedran & Berman), C. Tad Bohannon for Central Arkansas Water.

Companies: Central Arkansas Water; General Chemical Corporation; General Chemical Performance Products, LLC; Gentek, Inc.; Chemtrade Logistics, Inc.

News: Antitrust NewJerseyNews