Blue Rhino, AmeriGas Hit With Fixed Propane Prices Class Action Lawsuit

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A price fixing class action lawsuit was filed Monday against two of the largest propane sellers in the United States alleging that the companies entered into an illegal agreement to fix the price of propane to increase their profit.

Blue Rhino and AmeriGas Partners LP are accused of changing the amount of propane they used to fill their tanks, from 17 pounds down to 15 pounds in 2008 without reducing the price they charged to fill a typical propane tank.

The lead plaintiff, a New Jersey based hardware store chain, Arrow Hardware, alleges in its complaint that this action caused the wholesale price of propane to increase and, “[a]s a result of defendants’ unlawful conduct, plaintiff and class members have paid artificially inflated prices for at least millions of pounds of propane gas.”

The class action lawsuit alleges that the companies, which make up the majority of the propane market, conspired to work together to push Wal-Mart, one of their largest purchasers, to agree to the fill-reduction.

“Both Defendants knew that the proposed fill reduction and effective price increase would not be successful absent the agreement of the other,” the fixed price class action lawsuit alleges, and , “[a]s a result of the need for both Defendants to agree in order to successfully implement this scheme, during the Spring and Summer of 2008, Defendants engaged in dozens of communications regarding the proposed fill reduction to coordinate and conspire to implement the fill reduction and price increase.”

The propane gas class action lawsuit alleges that “[t]o compete effectively [in the United States] for sales to national retailers, such as Walmart, the Home Depot, and Lowe’s, propane exchange tank manufacturers need access to refilling and refurbishing facilities throughout the country,” and “[p]ropane exchange tank suppliers that lack nationwide access to such assets are unable to constrain the prices of propane exchange tanks.”

“The high level of market concentration and Defendants’ exclusive nationwide distribution of propane exchange tanks facilitated the conspiracy,” Arrow Hardware alleges, and “because Defendants own and control approximately 80 percent of the propane exchange tank market, they collectively have the market power to impose and sustain the fill reduction and effective price increase.”

The plaintiff alleges that AmeriGas and Blue Rhino engaged in collusion and anticompetative conduct and violated antitrust laws as well as the Sherman Act.

The price fixing class action lawsuit also points out that the Federal Trade Commission (FTC) has taken an interest and filed and administrative complaint against AmeriGas and Blue Rhino.

“The FTC charges that the Defendants’ unlawful actions had the purpose capacity, tendency, and effect of restricting or eliminating competition in the wholesale sale of propane exchange tanks and had the effect of raining the price per pound of propane to Defendants’ customers” says the complaint.

The proposed Class consists of “[a]ll persons or entities that purchased or exchanged propane exchange tanks in the United States directly from or with any of the Defendants or their co-conspirators, their subsidiaries, affiliates or joint-ventures from July 21, 2008 through the present.”

The lead plaintiff, Arrow Hardware LLC, is represented by Bryan L. Clobes of Cafferty Clobes Meriwether & Sprengel LLP and Harris L. Pogust and Tobias L. Millrood of Pogust Braslow & Millrood LLC.

The Propane Price Fixing Scheme Class Action Lawsuit is Arrow Hardware LLC v. Amerigas Partners LP, et al., Case No. 2:14-cv-04132, in the U.S. District Court for the Eastern District of Pennsylvania.