HVAC manufacturers hit with two more price-fixing lawsuits

In March, a proposed federal class-action lawsuit rocked the HVAC industry, accusing major manufacturers of having conspired to raise prices since January 2020. 

What’s happening: Filed this week, two additional proposed class-action suits make similar claims against defendants Bosch, Carrier, Daikin, Lennox, Rheem, Trane, and AAON, as well as their subsidiaries. 

Why it matters: While the March lawsuit was filed by a consumer, this week’s suits were filed by contractors who purchased equipment either directly or indirectly for resale, opening the door for similarly situated contractors to join the litigation. 

• The plaintiff in the first suit, filed April 20, is a Florida contractor, Richard Isom, whose Air Tech Services operates in and around Manatee County, while the plaintiff in the second suit, filed April 22, is New York-based Safford’s Heating, Cooling, and Refrigeration.
• The latter suit states that the plaintiff class could include “many thousands” of resellers: “These businesses are primarily small, independent, businesses in every community across the country.” 

Catch up quick: Each of the three lawsuits contends that since 2020, manufacturers have coordinated price hikes — and monitored and communicated them through AHRI, ACHR News, and public statements. 

• The suits detail a series of such increases over the period and highlight the growth gap between HVAC-specific producer prices and broader consumer prices.
• Go deeper 

Of note: Isom’s suit describes HVAC distributor Watsco as a co-conspirator — but not a defendant — stating that the company’s gross profit nearly doubled from $1.22 billion in 2020 to over $2.03 billion in 2022. 

• The suit quotes Watsco’s executive team saying the company “collaborat[es] closely with [its] OEM partners on current and future pricing actions” — and executive vice president Barry Logan saying, “as we receive higher cost from OEMs and we move that product through to our customers, it is an opportunity for us to be a good merchant and realize some margin dollars.”

The big picture: “Between January 2020 and the present, HVAC Equipment prices rose by approximately 53.5%, far outpacing both general inflation and the price of comparable manufactured goods,” Isom’s filing says. 

• It contends that the defendants have “inflated HVAC Equipment prices by at least 8% above the levels that would have prevailed under competitive conditions.” 

What they’re saying: “For years, HVAC businesses have been told that the latest round of price increases was unavoidable — pandemic disruptions, refrigerant transitions, new efficiency standards,” Patrick McGahan, an attorney representing Isom, told Homepros via email. 

• “But when prices rise in lockstep across an entire industry, at a pace that far exceeds actual cost drivers, that explanation starts to strain credibility,” he added. 
• “This case is about whether the market was rigged. We look forward to pursuing that question on behalf of the contractors, distributors and supply houses who paid the price, and we’re happy to speak with anyone who wants to understand what this litigation may mean for them.”

The other side: “We are aware of the recent lawsuit filed against several HVAC equipment manufacturers, including Rheem,” a Rheem spokesperson told Homepros. “We deny the allegations in the complaint and look forward to defending ourselves through the legal process.”

• “We strongly dispute the allegations made in this lawsuit and intend to vigorously defend ourselves against these baseless claims,” a Trane spokesperson added. “Trane remains committed to operating with integrity, complying with applicable laws and regulations, and providing value to our customers through our sustainable, reliable solutions.” 
• Representatives for AHRI, ACHR News, Watsco, and the remaining defendants either declined to comment or didn’t return Homepros’ requests for comment.