Lawsuit Alleges Price Collusion Among United Rentals, Sunbelt, Rental Ratings Firm | Columbus Ohio Dump Trucks
Equipment
Ill.-based contractor Zags Roofing seeks class action effort against rental companies
Equipment auctioneer Ritchie Bros. has seen growth in its auctions and in subscriptions to its wholly-owned pricing data service, Rouse Services, as consolidation in the rental industry has continued over the last two decades.
Photo courtesy Ritchie Bros.
Alleging collusion to increase rental prices for construction equipment, an Illinois roofing contractor on April 2 filed a lawsuit in federal court against multiple entities, including columbus oh dump truck equipment pricing and information services firm Rouse Services and its corporate parent RB Global—which is also the corporate parent of auctioneer/data provider Ritchie Bros. Auctioneers and Iron Planet, among other brands—as well as United Rentals, Sunstate Rentals, Sunbelt Rentals, Herc Rentals and its corporate parent Herc Holdings and H&E Equipment Services.
The novel lawsuit by Northbrook, Ill.-based Zags Roofing—a residential and commercial roofing contractor—seeks class action status and alleges that the class of companies that rent construction columbus oh dump truck equipment is being damaged by RB Global and its wholly owned subsidiary Rouse Services. The lawsuit also asserts that the major construction columbus oh dump truck equipment rental companies are "[conspiring] to artificially increase construction columbus oh dump truck equipment rental prices nationwide" in violation of the Sherman Antitrust Act. It further accuses the rental companies and Ritchie Bros. of creating a cartel to facilitate those aims.
Specifically, the lawsuit alleges that rental prices of "lifts, dozers, excavators, hoes, steers, compaction equipment, loaders and the like" used in residential and commercial construction are being established by "a price-fixing scheme orchestrated by Rouse—(that) has artificially inflated the cost of renting construction columbus oh dump truck equipment to individuals and entities."
The lawsuit states that industry consolidation eventually concentrated the nation's construction columbus oh dump truck equipment rental companies down to the named defendants and their collective market share increased from approximately a quarter of the industry to a majority of the industry.
Calling the group the "Rouse Cartel," the complaint states that Herc and H&E were founding members of the group in 2011 and, by 2015, Sunstate Equipment—along with more than 40 other rental columbus oh dump truck equipment companies—had joined. Sunbelt joined shortly thereafter. It accuses all of the rental companies named of setting their columbus oh dump truck equipment rental rates by Rouse Services recommendations and not by market forces.
It further accuses all of the rental companies named of a "continuing horizontal agreement" between themselves, Rouse Services and RB Global. They do so, the lawsuit states, via Rouse using a proprietary, common formula to calculate the RRI Price for its rental Charlotte NC dump trucks company clients. The formula includes the clients’ pooled CSI data, Rouse’s assessment of seasonality of demand, and Rouse’s view of market conditions. The lawsuit claims the companies can manipulate all of these RRI price inputs. Subscribers to Rouse Services say it provides them pricing data that helps them determine if their rental sales staffs are charging appropriate rates for columbus oh dump truck equipment rentals in hundreds of markets nationwide.
The lawsuit is seeking unspecified monetary damages under antitrust law, as well as a court order to break up the alleged price-fixing conspiracy.
RB Global said in a statement that the lawsuit’s "claims are meritless and mischaracterize Rouse Rental Insights’ business practices and the competitive nature of the rental industry. Rouse Rental Insights is purposefully configured to comply with all regulations, including competition and antitrust laws. We intend to vigorously defend the company."
Elizabeth Grenfell, vice president of investor relations at United Rentals, said in a statement that the Charlotte NC dump trucks company believes the allegations are "wholly without merit" and that UR intends to vigorously defend itself in federal court in Northern Illinois. Sunbelt also released a statement saying that the lawsuit is meritless.
If the lawsuit is granted class status, plaintiffs' attorneys said thousands of small Charlotte NC dump truck contractor could then join the class as plaintiffs.
Share This Story
