Hartig Drug Co. v. Ferrellgas Partners, L.P.
2017 U.S. App. LEXIS 11260
| 8th Cir. | 2017Background
- Ferrellgas (Blue Rhino) and AmeriGas reduced propane tank fill from 17 to 15 pounds in 2008 but kept the same retail price, effectively raising per‑pound price.
- Indirect‑purchaser class settled claims against defendants in 2010 alleging collusion over fill reduction and prices; FTC later brought and settled its own complaint.
- Direct purchasers (plaintiffs here) sued in 2014 under Section 1 of the Sherman Act alleging an ongoing price‑fixing conspiracy and that sales during the class period were at supracompetitive per‑pound prices.
- District court dismissed as time‑barred under the four‑year antitrust statute of limitations; panel affirmed but the en banc Eighth Circuit reversed.
- Central legal question: whether repeated sales at inflated prices during the limitations period are overt acts restarting the limitations period under the continuing‑violation doctrine.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether repeated sales at supracompetitive prices are overt acts that restart the 4‑year statute of limitations under the continuing‑violation doctrine | Sales during the class period are new overt acts; each sale restarts the limitations period per Klehr | Klehr is dicta from a RICO case and inapplicable; sales alone do not restart limitations absent a live, ongoing conspiracy | Reversed: under Klehr and precedent, each sale in a price‑fixing conspiracy is an overt act that restarts the limitations period |
| Whether the amended complaint plausibly alleges a continuing price‑fixing conspiracy into the limitations period | Complaint alleges coordinated communications, specific conversations, market monitoring, and repeated purchases at inflated per‑pound prices during the class period | Allegations are largely pre‑limitation, conclusory, or mere parallel conduct and fail Twombly/Iqbal plausibility | Complaint plausibly alleges: named meetings/calls, communications through 2010, continued sales at inflated per‑pound prices — sufficient to plead a continuing violation at the motion‑to‑dismiss stage |
| Whether knowledge of the illegality affects accrual for continuing violations | Knowledge irrelevant; each overt act starts the period regardless of plaintiff’s earlier knowledge | Plaintiffs should not be allowed to ‘sleep on their rights’; live conspiracy must be shown | Court rejects knowledge requirement; under Klehr knowledge does not negate that each sale restarts the clock |
| Applicability of the “unabated inertial consequences” rule (Varner) to horizontal price‑fixing | Not applicable; horizontal per se price‑fixing differs from the vertical/tying context in Varner | Varner bars treating ongoing consequences of a single past act as restarting limitations | Court distinguishes Varner and similar merger/§7 cases; continuing horizontal price‑fixing qualifies for Klehr rule |
Key Cases Cited
- Klehr v. A.O. Smith Corp., 521 U.S. 179 (1997) (each overt act in a continuing violation restarts the limitations period)
- Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (1968) (antitrust conduct constituting a continuing violation inflicts continuing and accumulating harm)
- Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971) (in a continuing conspiracy, each injurious act gives rise to a new cause of action)
- In re Wholesale Grocery Prod. Antitrust Litig., 752 F.3d 728 (8th Cir. 2014) (Eighth Circuit applying Klehr: sales in a price‑fixing conspiracy are overt acts restarting limitations)
- Varner v. Peterson Farms, 371 F.3d 1011 (8th Cir. 2004) (performance of anticompetitive contracts during the limitations period may be inertial consequences and not restart the period)
- Midwestern Mach. Co. v. Northwest Airlines, 392 F.3d 265 (8th Cir. 2004) (merger claims are discrete acts; continuing‑violation theory differs across antitrust contexts)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard: plausibility, not mere labels or parallel conduct)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (requirement that complaints contain factual content to permit reasonable inference of liability)
- Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039 (8th Cir. 2000) (recognizes continuing violations in ongoing conspiracies)
- Socony‑Vacuum Oil Co. v. United States, 310 U.S. 150 (1940) (sales can supply continuous cooperation necessary to keep a conspiracy alive)