Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Price fixing of commercial parking heaters alleged, (Apr 23, 2015)

By Linda O’Brien, J.D., LL.M.

A manufacturer of commercial climate control systems participated in a conspiracy to fix the prices of air parking heaters and related accessories sold in the aftermarket for use in commercial vehicles, according to a complaint filed in the federal district court in Brooklyn, New York (National Trucking Financial Reclamation Services, LLC v. Espar, Inc., April 22, 2015).

Espar manufactures air and coolant heater products for use in commercial vehicles and is one of the largest suppliers of parking heaters in North America. Parking heaters provide heat to the cabin of a commercial vehicle while the operators are resting and reduce the need for engine idling in the vehicle. Parking heaters are sold by manufacturers through dealers who have assigned territories in which they sell, install, and repair parking heaters.

National Trucking Financial Reclamation Services is a holding company that was assigned the claims of a trucking company that has purchased commercial parking heaters and related accessories.

The complaint states that there are three companies that control the market for heating systems: Espar, Webasto Products North America, and Marine Canada Acquisition Inc. The global market for parking heaters is highly concentrated, with Webasto alone accounting for 75 percent of the global parking heater market. Parking heaters are a distinct product market with unique features, since alternative technologies cost substantially more and are more complex to install. There are also high barriers to entry to the parking heater industry in the form of technology, manufacturing expertise, and access to distribution channels.

The U.S. Department of Justice Antitrust Division has investigated unlawful and anticompetitive conduct in the parking heater industry. As a result of the investigation, in March 2015, Espar pleaded guilty to a one count felony charge for its participation in a conspiracy to fix parking heater prices for commercial vehicles in violation of the Sherman Act, the complaint alleges.

According to the action, Espar entered into a plea agreement in which the company stated that it (1) participated in discussions to discuss aftermarket prices for parking heaters for commercial vehicles; (2) agreed to set a price floor for parking heater kits sold to aftermarket customers and coordinate the timing and amount of price increases for parking heaters; and (3) exchanged information for the purpose of monitoring and enforcing adherence to the agreements. Espar also agreed to pay a criminal fine of $14,970,000. Sentencing is scheduled for June 5.

The complaint also states that the plaintiff did not discover and could not have discovered through reasonable diligence that Espar conspired with other parking heater manufacturers to fix prices until March 2015, when a government investigation into the defendants’ misconduct and Espar’s guilty plea was publicly revealed. Espar and its co-conspirators fraudulently concealed their activities through methods designed to avoid detection. Due to Espar’s fraudulent concealment, any applicable statute of limitations has been tolled.

The plaintiff asserts claims for violations of the Section 1 of the Sherman Act. The action seeks declaratory and injunctive relief, treble damages, pre- and post-judgment interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 1:15-cv-02310.

Attorneys: Jonathan W. Cuneo and Taylor Asen (Cuneo Gilbert & Laduca, LLP), Michael L. Roberts (Roberts Law Firm, P.A.), Don Barrett (Don Barrett, P.A.), and Joseph C. Kohn (Kohn, Swift & Graf, P.C.) for National Trucking Financial Reclamation Services, LLC.

Companies: National Trucking Financial Reclamation Services, LLC; Espar Inc.; Espar Products Inc.

News: Antitrust NewYorkNews