Academic journal article Missouri Law Review

When Cheating Is Good and Cooperation Is Bad: Conspiracies and the Continuing Violations Doctrine under the Sherman Act: In Re Pre-Filled Propane Tank Antitrust Litig

Academic journal article Missouri Law Review

When Cheating Is Good and Cooperation Is Bad: Conspiracies and the Continuing Violations Doctrine under the Sherman Act: In Re Pre-Filled Propane Tank Antitrust Litig

Article excerpt

I. INTRODUCTION

Courts have long recognized that statutes of limitation may be equitably adjusted under certain circumstances. (1) In other instances, courts have adjusted the statute of limitations not by making an equitable exception but by changing the definition of when the statute begins to run in the first instance. (2) In the antitrust context, courts have done the latter, occasionally invoking the continuing violations doctrine. (3) This doctrine allows a claimant to restart the limitations period if there is an overt act alone sufficient to be an antitrust violation. (4) The period restarts even if the overt act is performed under a pattern or course of prior violations that may have occurred outside of the limitations period. (5)

The Eighth Circuit considered the issue in In re Pre-filled Propane Tank Antitrust Litigation in the context of a price-fixing conspiracy among manufacturers of propane tanks. (6) This Note considers the framework employed by the majority and goes on to suggest ways to refine that framework to reduce error costs and protect competition. To do so, an appropriate continuing violations rule must advance two seldom-advised ends: encouraging cheating and discouraging communication.

II. FACTS AND HOLDING

In the wake of increasing propane costs between 2006 and 2008, the two largest distributors of pre-filled propane tanks reduced the fill level of their tanks from seventeen pounds to fifteen pounds. (7) At the time of the price increase, the two distributors, Ferrellgas and AmeriGas ("Defendants"), made up approximately eighty percent of the American market for pre-filled propane exchange tanks. (8) Pre-filled propane exchange tanks ("propane tanks") are used to power outdoor grills and heaters and can typically be filled with up to twenty pounds of propane. (9) In 2009, a class action was filed on behalf of a group of purchasers of propane tanks from retailers of the Defendants ("2009 Class"). (10) The 2009 Class alleged that Defendants had colluded to reduce the amount of propane in their tanks while maintaining the same price per tank, effectively increasing the price of the tanks. (11) The complaint alleged that colluding to increase prices violated section 1 of the Sherman Act in addition to state antitrust and consumer protection statutes. (12)

In its amended complaint, the 2009 Class, composed of indirect purchasers, (13) defined their class differently, referring to the class members' commonality as "persons who purchased a [p]ropane [t]ank sold, marketed, or distributed by any Defendant during the applicable limitations period." (14) Settlement negotiations ensued with both Defendants, and the 2009 Class moved for preliminary approval of the resulting settlement agreements in early December 2009. (15) Both settlement agreements defined the class slightly differently. The AmeriGas agreement defined the settlement class as "people who purchased or exchanged one or more of AmeriGas's pre-filled propane gas cylinders in the United States not for resale, between June 15, 2009[,] and November 30, 2009." (16) The Ferrellgas agreement defined the class as "people who purchased or exchanged one or more of Ferrellgas's pre-filled propane gas cylinders in the United States not for resale, between June 15, 2009[,] and the date of Preliminary Approval." (17) The district court (18) granted approval of the settlement agreements. (19)

Over three years later, the Federal Trade Commission ("FTC") issued a complaint alleging price fixing against the Defendants arising out of the effective price increase on their propane tanks in 2008. After several months, a group of both direct and indirect purchasers filed the suit at issue ("2014 Class"). (20) The complaint again alleged that the Defendants colluded to fix prices in violation of section 1 of the Sherman Act. (21)

The antitrust claims were all subject to a four-year statute of limitations. …

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