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In re Pre -Filled Propane Tank Antitrust Litigation

United States Court of Appeals, Eighth Circuit

August 25, 2016

In re: Pre -Filled Propane Tank Antitrust Litigation
v.
Ferrellgas Partners, L.P. a limited partnership; Ferrellgas, L.P. a limited partnership, doing business as Blue Rhino; AmeriGas Partners, LP a limited partnership; UGI Corporation; AmeriGas Propane, Inc., doing business as AmeriGas Cylinder Exchange; AmeriGas Propane, LP Defendants-Appellees Hartig Drug Company; Jason Moore's Texaco, L.L.C., doing business as Moore's Texaco; Mario Ortiz; Stephen Morrison; Steven Tseffos; Glenville Shell, LLC; Zarco USA, Inc.; AQ Investments, LLC; LJax Enterprises, Inc.; J & V Management, LLC; Butch's Central Coastal, Inc.; Zerka's Party Store, Inc.; OM Commercial Neenah Oil, Inc.; CCLAS, Inc.; Hopewell Exxon, LLC; Tuban Petroleum, LLC; 33 and a Third, LLC; Tuban 610, LLC; Highway 182, LLC; West Main Street, LLC; Roth's Country Corner, Inc.; 1919 Airline Hwy., LLC; East Airline, LLC; Gramercy Cheap Smokes, LLC; Conti's Service Center, Inc.; Route 49 Gas & Go, Inc.; Surinder Kaur, Inc. Plaintiffs Morgan-Larson, LLC Plaintiff- Appellant Ashville General Store, Inc.; Sean Venezia; Michael S. Harvey; Gregory Ludvigsen; Arthur Hull; Alan Rockwell; James Halgerson; Thomas R. Clark; Bryce Mander; Alex Chernavsky; Arrow Hardware, LLC; Birdie's, Inc.; Alex Chernavsky; Lochraven Sunoco, Inc.; American Auto Repair Plaintiffs Johnson Auto Electric, Inc. Plaintiff- Appellant Cedar Holly Investments, LLC; Tuckerton Lumber Company; Ace High Auto Repair & Propane; CEFO Enterprise Corp.; Jon Wall, Inc.; RC Gasoline Plaintiffs Speed Stop 32, Inc. Plaintiff- Appellant Zarco USA, Inc.; Dunmore Oil Co., Inc.; JoJo Oil Co., Inc.; Ekonomy Enterprises, Inc. Plaintiffs Yocum Oil Company, Inc. Plaintiff- Appellant

          Submitted: March 16, 2016

         Appeal from United States District Court for the Western District of Missouri - Kansas City

          Before WOLLMAN, BENTON, and SHEPHERD, Circuit Judges.

          SHEPHERD, Circuit Judge.

         Plaintiffs Morgan-Larson, LLC, Johnson Auto Electric, Inc., Speed Stop 32, Inc., and Yocum Oil Company, Inc. (collectively "Plaintiffs" or "Plaintiff-Appellants") appeal the district court's[1] dismissal of their claims for damages in their action against Defendants Ferrellgas[2] and AmeriGas[3] under Section 1 of the Sherman Act, see 15 U.S.C. § 1. For the reasons stated below, we affirm the judgment of the district court.

         I.

         In the United States, Ferrellgas and AmeriGas (together, "Defendants") are the largest distributors of pre-filled propane exchange tanks, which are portable steel cylinders containing propane that are used primarily to power outdoor grills and heaters. The tanks come in a standard size and are capable of being filled with up to 20 pounds of propane. Before 2008, the tanks were filled with 17 pounds of propane. From 2006 to 2008, the cost of propane rose and in 2008, Defendants reduced the fill level of the tanks from 17 to 15 pounds of propane per tank while maintaining the same price per tank.

         In 2009, a group of plaintiffs ("2009 Plaintiffs") filed a class action lawsuit against Defendants alleging that Defendants had acted in concert to reduce the amount of propane contained within the tanks while maintaining the same price per tank, and thus artificially increasing the price of the tanks. Amended Complaint at ¶¶ 1-4, In re Pre-Filled Propane Tank Mktg. & Sales Practices Litig., No. 09-2086, 2010 WL 2008837 (W.D. Mo. May 19, 2010) (hereinafter "In re Propane I"). The 2009 Plaintiffs claimed that the actions of Defendants violated Section 1 of the Sherman Act, as well as state antitrust and consumer protection laws. The named plaintiffs in In re Propane I were all indirect purchasers, individuals who purchased the pre-filled propane exchange tanks from companies to whom Defendants initially sold the tanks. However, in their amended complaint, the 2009 Plaintiffs defined their class as "[a]ll persons who purchased a Propane Tank sold, marketed, or distributed by any Defendant during the applicable limitations period."

         On December 8, 2009, the 2009 Plaintiffs moved for preliminary approval of settlement agreements. The class action settlement agreements were finally approved by the district court on October 6, 2010. The AmeriGas settlement agreement defined the settlement class as "all 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." The Ferrellgas settlement agreement defined the settlement class as "all 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." The date of preliminary approval was October 13, 2011.

         On March 27, 2014, the Federal Trade Commission ("FTC") issued a complaint against Defendants alleging that they had restrained price competition because of their 2008 decision to decrease the fill level of the propane tanks. Shortly thereafter, in October 2014, Plaintiffs and other direct and indirect purchasers filed the present suit. Plaintiff-Appellants are all direct purchasers, that is purchasers who purchased tanks directly from Defendants for resale. In their complaint, Plaintiffs allege that the 2008 reduction in fill level was the product of improper collusion between Defendants, and despite the settlement agreements, Defendants continue to conspire and maintain their illegally agreed upon fill levels in violation of Section 1 of the Sherman Act.

         The district court determined that Plaintiffs' claims are barred by the statute of limitations. The court concluded that none of the tolling theories advanced by Plaintiffs were sufficient to adjust or toll the statute of limitations. Accordingly, the district court granted Defendants' Motion to Dismiss Plaintiffs' claims for damages.[4]Plaintiffs timely appealed. On appeal, Plaintiffs argue that the district court erred in failing to find that the continuing violations theory, which has the effect of restarting the limitations period, prevented the dismissal of Plaintiffs' claims. No other issues are raised on appeal.

         II.

         "We review a district court's grant of a motion to dismiss de novo." Christiansen v. W. Branch Cmty. Sch. Dist., 674 F.3d 927, 933-34 (8th Cir. 2012). We take the facts alleged in the complaint as true. Bradley Timberland Resources v. Bradley Lumber Co., 712 F.3d 401, 406 (8th Cir. 2013). Whether a party's claim is barred by the statute of limitations is a question of law that we review de novo. McDonough v. Anoka Cnty., 799 F.3d 931, 939-40 (8th Cir. 2015).

         Actions brought under Section 1 of the Sherman Act must be filed within four years of the accrual of the cause of action or they are barred by the Sherman Act's statute of limitations. 15 U.S.C. § 15b. "Generally, a cause of action [under the Sherman Act] accrues and the statute begins to run when a defendant commits an act that injures a plaintiff's business." Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338 (1971) (citations omitted). Where a plaintiff's interests are repeatedly invaded, a continuing violation occurs. Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234, 237 (9th Cir. 1987) (citation omitted). "However, even when a plaintiff alleges a continuing violation, an overt act by the defendant is required to restart the statute of limitations and the statute runs from the last overt act." Varner v. Peterson Farms, 371 F.3d 1011, 1019 (8th Cir. 2004) (internal quotation marks and citation omitted). "An overt act has two elements: (1) it must be a new and independent act that is not merely a reaffirmation of a previous act, and (2) it must inflict new and accumulating injury on the plaintiff." Id. (citing Pace Indus., 813 F.2d at 238). "Acts that are merely unabated inertial consequences of a single act do not restart the statute of limitations." Id. (internal quotation marks and citation omitted).

         Plaintiffs have alleged two distinct types of overt acts that occurred within the limitations period: (1) Defendants' sales to Plaintiffs at artificially inflated prices; and (2) conspiratorial communications between Defendants regarding pricing and fill levels. Plaintiffs argue that either ...


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