Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Bismarck alleges water treatment chemical price fixing conspiracy, (Mar 3, 2016)

By Greg Hammond, J.D.

The leading ferric chloride manufacturers in the United States have allegedly conspired to raise, fix, stabilize, or maintain prices, and to allocate customers in the ferric chloride market, in violation of Section 1 of the Sherman Act, according to a class action complaint filed in the federal district court in Los Angeles by the City of Bismarck, North Dakota (City of Bismarck v. California Water Technologies, LLC, March 2, 2016).

Ferric chloride is a water treatment chemical used to remove impurities and other substances from potable water and to treat wastewater. Bismarck claims that California Water Technologies, LLC, PVS Chemicals, Inc., PVS Technologies, Inc., Kemira Chemicals, Inc., and Hawkins, Inc. conspired to fix prices and to allocate customers in the market for ferric chloride sold in the United States, from January 1, 2006, through October 31, 2015.

The five defendants account for approximately 90 percent of the market share, the complaint alleges. Bismarck further claims that the defendants: (1) agreed to stay away from each other’s historic customers; (2) tracked bid and pricing histories to determine which accounts were historic customers of each co-conspirator, in order to determine whether to pursue a particular contract or submit an intentionally losing bid; (3) submitted intentionally losing or throw-away bids or price quotations to each other’s historic ferric chloride customers; (4) withdrew inadvertently winning bids submitted to co-conspirators’ historic customers; and (5) engaged in compensating bidding practices where a co-conspirator could not withdraw its inadvertently winning bid, bidding to lose on one of its own customers.

As a result of the alleged conspiracy, Bismarck asserts that customers—which mostly consist of municipalities—were allocated among the defendants; price competition was restrained or eliminated with regard to ferric chloride; the prices of ferric chloride were fixed, raised, maintained, or stabilized at artificially inflated levels; and the defendants charged supra-competitive prices for ferric chloride.

The one-count complaint claims that the defendants violated Section 1 of the Sherman Act and seeks injunctive relief, treble damages, attorney fees, litigation expenses, court costs, and pre- and post-judgment interest.

The case is No. 16-cv-1448.

Attorneys: Laurence D. King (Kaplan Fox & Kilsheimer LLP) for City of Bismarck.

Companies: California Water Technologies, LLC; PVS Chemicals, Inc.; PVS Technologies, Inc.; Kemira Chemicals, Inc.; Hawkins, Inc.

News: Antitrust CaliforniaNews