AquaStar Pool Products of San Diego has filed a lawsuit accusing Hayward Industries of engaging in anticompetitive practices.
“The main charge is that they were going to punish anybody who dealt with AquaStar,” said Maxwell M. Blecher of Los Angeles-based Blecher & Collins, PC. “Since Hayward is basically a must-have product for pool distributors, the threat has had the effect of making the distributors unwilling to deal with [AquaStar]. ...
“We believe that, given their market share, those activities are unlawful under the antitrust laws.”
Hayward denies the allegations, but declined to comment on ongoing litigation. Its motion to dismiss the case was recently denied and the proceedings move into discovery.
The suit revolves around alleged activity subsequent to AquaStar’s entry into the suction-side pool cleaner market in 2009, when it introduced the StarzTruck line of cleaners and ProStar line of replacement parts made for Hayward’s Navigator, Pool Vac and Arneson brand cleaners.
The complaint, filed in the District Court for the Central District of California, stated that Hayward threatened to withhold selling to distributors who offered AquaStar pool cleaners and related products. It also alleges that discounts, rebates and other incentives were reserved for those who agreed not to purchase or distribute the AquaStar products.
“The way they accomplished this is to say either ‘we won’t deal with you’ or ‘we’re going to withdraw your rebates or allowances so you’re going to have to be punished, and you’ll wind up paying more if you deal with AquaStar than if you just stay with us,’” Blecher said.
In its court-filed response, Hayward stated, “On one occasion, [Hayward] exchanged certain Hayward products for certain AquaStar products from one of Hayward’s distributors.” Other than that, it denied the charges.
AquaStar accused Hayward of communicating anticompetitive threats and incentives in emails, letters, one-on-one conversations and in public addresses. Hayward denied that any such communications took place.
AquaStar also claimed that certain distributors had placed orders for products, but cancelled at the last minute because of threats from Hayward. Hayward denied leveling such threats and said it lacks the information to know whether or not distributors have cancelled orders or returned products to AquaStar.
Additionally, because of Hayward’s dominant position in the market, the complaint stated that the alleged threats hold serious consequences to distribution and retail customers, making it impossible for other manufacturers to exist in the market and limiting consumers’ choices.
“Absent action by this court to enjoin and preclude defendant Hayward from continuing its anticompetitive and exclusionary conduct, there is a dangerous probability that Hayward will succeed in obtaining a monopoly in the relevant market (or continue to monopolize), including the power to set prices, reduce
output or exclude competition in the market for automatic suction-side pool cleaners/replacement parts,” AquaStar said in its complaint.
Hayward denied engaging in anticompetitive behavior and said that it did not cause injury to AquaStar.
In addition to damages and compensation for legal fees, AquaStar is asking the court for a permanent injunction preventing Hayward from participating in the alleged actions.
This isn’t the first time these parties have gone to court over their pool cleaner products. Last year, the producers reached a confidential settlement after Hayward sued AquaStar, accusing the company of cyber-squatting, trademark and design patent infringement, unfair competition, and a number of other related charges.
In that complaint, Hayward said AquaStar’s replacement parts infringed on a Hayward design patent, and that the company intentionally marketed and packaged the parts so they would appear to be Hayward products.