PoolCorp received another favorable ruling in its class-action antitrust lawsuit, and has been ordered to enter into mediation.
In 2011, a group of distributors, dealers and consumers filed a class-action suit against the Covington, La.-based distributor, claiming it engaged in anticompetitive behavior such as pressuring manufacturers not to do business with other distributors and purchasing competitors only to shut them down. Consumers involved in the case said the alleged behavior artificially boosted prices.
The so-called “Big Three” manufacturers — Hayward Pool Products of Elizabeth, N.J.; Pentair Aquatic Systems of Sanford, N.C.; and Zodiac Pool Systems of Vista, Calif. — were added to the case, accused of cooperating with PoolCorp. They have since settled.
PoolCorp and the two sets of plaintiffs — one group of industry firms, another of consumers — have been ordered to enter into mediation before trial begins. A trial date has not been set, so the mediation deadline is not yet known.
Such orders are fairly routine in these cases; however, PoolCorp continues to state its resolve to see the case through. “We are very vigorously defending this case and intend to keep on doing so,” said the distributor’s attorney, David Bamberger, a partner in Washington, D.C.-based DLA Piper.
In the meantime, PoolCorp was granted summary judgment on one of the claims against it. Among other things, the distributor was accused of engaging in vertical conspiracy with the Big Three. These are defined as agreements between companies positioned at different levels of the supply chain. Plaintiffs claimed certain arrangements between PoolCorp and the three manufacturers were meant to restrict competing distributors’ ability to purchase product or sell to PoolCorp customers. In requesting summary judgment, PoolCorp said the plaintiffs could not show that the alleged agreements hurt competition — a requisite for proving the conspiracy charges.
The judge ruled in favor of PoolCorp, in part because analysis from the plaintiff’s expert witness did not meet the legal standard for proving vertical conspiracy, and because the plaintiffs’ case partly relied on allegations that had already been thrown out. “It is undisputed that [PoolCorp] did not maintain an exclusive distributorship with any manufacturer defendant,” said Judge Sarah Vance of the U.S. District Court in Louisiana’s Eastern District. “[Plaintiffs’] own expert … confirms that the three manufacturer defendants conducted the majority of their business with entities other than [PoolCorp].”
She also agreed that damage could not be proved. “Without evidence that any of the alleged vertical conspiracies injured competition, [the plaintiffs] cannot prove the antitrust violation necessary to sustain their vertical conspiracy claims,” she said.
Three more summary judgment motions remain pending. This isn’t the first time Judge Vance has made such a ruling. In January, she granted a PoolCorp summary judgment motion regarding a horizontal conspiracy claim, in which plaintiffs accused all four companies of agreeing to raise the amount of purchase needed to earn free freight so buying groups would suffer a disadvantage. In that case, the judge said the evidence was circumstantial and not strong enough to eliminate the possibility that the Big Three firms chose to raise their prices on their own.