Antitrust Law Daily Wrap Up, TOP STORY—E.D. La.: Settlements between two pool product makers and purchasers get final approval, (Jun 3, 2015)

By Jeffrey May, J.D.

Two settlements totaling nearly $10 million have been given final approval by the federal district court in New Orleans to resolve price fixing claims brought by pool products purchasers against Hayward Industries, Inc. and Zodiac Pool Systems, Inc.—two of the largest U.S. manufacturers of pool products. Of the $9.95 million total settlement fund, one third was directed to class counsel for reimbursement of attorney fees and litigation expenses (In Re: Pool Products Distribution Market Antitrust Litigation, June 2, 2015, Vance, S.).

The settlement between the manufacturers and “direct purchaser plaintiffs” (DPPs) was found to be fair, reasonable, and adequate. It resolves all of the DPPs' claims against Hayward and Zodiac over their role in an alleged conspiracy that also involved pool products manufacturer Pentair Water Pool and Spa, Inc. and Pool Corporation (PoolCorp)—the country’s largest distributor of pool products—to fix prices, among other anticompetitive conduct. The court preliminarily approved the $3.45 million DPP-Zodiac settlement and certified its settlement class in December 2014, just three months after approving a similar $6.5 million DPP-Hayward settlement. The settlement classes in the two settlements were identical—entities that purchased their pool products directly from PoolCorp.

The DPPs contended that their estimated damages during the class period between 2007 and 2011 were $266,846,301. In justifying approval of the seemingly small settlement, the court noted that the estimated damages of nearly $267 million “reflect[ed] a best case scenario for plaintiffs' actual damages” and did “not reflect the risks of nonrecovery or diminished recovery faced by plaintiffs.” The settlements come after two years of litigation. Despite the advanced stage of the dispute, the DPPs still faced the risks of surviving summary judgment, attaining class certification, and prevailing at trial and on appeal. Moreover, if the DPPs' claims were to proceed to trial against non-settling defendants, the class members could still recover the full damages to which they may be entitled, the court explained.

The court concluded that all of the six factors that the Fifth Circuit has identified for determining whether a settlement is fair, adequate, and reasonable were satisfied in this case: (1) evidence that the settlement was obtained by fraud or collusion; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the factual and legal obstacles to plaintiffs prevailing on the merits; (5) the range of possible recovery and certainty of damages; and (6) the opinions of class counsel, class representatives, and absent class members.

Expenses. In the notice sent to the class, class counsel had indicated that they would seek up to one-third of the settlement fund for attorney fees and/or for reimbursement of expenses. The amount paid and/or incurred by counsel on behalf of the class totaled $3,759,988, which was greater than one-third of the settlement. Class counsel’s request for one-third of the settlement fund for reimbursement of expenses ($3,316,667) was determined to be fair to the class, and that amount was approved.

This is MDL No. 2328.

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

Attorneys: Russ M. Herman (Herman, Herman, Katz & Cotlar, LLP) for Direct Purchaser Plaintiffs' Liaison Counsel. Arnold Levin (Levin, Fishbein, Sedran & Berman), Daniel W. Krasner (Wolf, Haldenstein, Adler, Freeman & Herz, LLP) and Douglas G. Thompson (Finkelstein Thompson LLP) for Plaintiffs' Steering Committee. Jay L. Himes (Labaton Sucharow, LLP), Robert N. Kaplan (Kaplan Fox & Kilsheimer LLP), and Ronald J. Aranoff (Bernstein Liebhard LLP) for Plaintiffs' Executive Committee. William Bernard Gaudet (Adams & Reese, LLP) for Defendants' Liaison Counsel. David H. Bamberger (DLA Piper, LLP) for Defendants' Lead Counsel. Wayne J. Lee (Stone, Pigman, Walther, Wittmann, LLC) for Manufacturer Defendants' Liaison Counsel.

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