Pentair Aquatic Systems has reached a settlement agreement with plaintiffs in a class-action anti-trust lawsuit involving it and three other companies. With settlements recently finalized for fellow Big 3 manufacturers Hayward Pool Products and Zodiac Pool Systems, this latest development likely will leave PoolCorp as the sole defendant, should the case go to trial.
The case began in 2011, when a group of distributors, dealers and consumers filed a class-action lawsuit against PoolCorp, accusing the Covington, La.-based megadistributor of anticompetitive behavior. The distributor and dealer plaintiffs said PoolCorp used its influence to convince manufacturers not to do business with its competitors, especially new firms. They also said PoolCorp would purchase competitors for the sole purpose of shutting them down. Consumers claimed that they were forced to pay higher prices because of the alleged anticompetitive behavior.
The following year, the plaintiffs added the Big 3 manufacturers to the case, alleging they cooperated with PoolCorp.
The plaintiffs consisted of two groups -- industry companies, called direct purchasers, and consumers, called indirect purchasers. Each filed its own lawsuit. The consumer lawsuit applies to those in Arizona, California, Florida and Missouri — the only states where consumers can sue for Sherman Act violations.
In June 2014, Hayward filed settlement agreements with both sets of plaintiffs for approximately $8 million. Last fall, Vista, Calif.-based Zodiac settled for almost $4 million. The manufacturers consolidated their settlements, which were approved and finalized as of July.
The proposed Pentair deal falls in between the other two. For the industry plaintiffs, Sanford, N.C.-based Pentair proposed a $6 million settlement plus interest earned. Attorneys’ fees of no more than $2 million would be collected from the amount. The settlement releases the manufacturer of all claims. Within 10 business days after the agreement receives preliminary approval from the court, the money will go into an escrow account and remain there until the court grants final approval.
If the settlement moves forward, the funds would be distributed to those who purchased pool products in the U.S. directly from PoolCorp between Nov. 22, 2007 and Nov. 21, 2011.
Pentair hopes to apply the same deadline for qualified plaintiffs to file claims or opt out – Dec. 11, 2015.
The proposed agreement named seven pool companies that will serve as the class representatives, who essentially stand in on behalf of all those who would qualify to collect.
On the consumer-plaintiff side, Pentair would pay $600,000. This would include attorneys’ fees and costs of administering the settlement.