IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF MISSOURI
`WESTERN DIVISION
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`
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`
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`IN RE: PRE-FILLED PROPANE TANK
`ANTITRUST LITIGATION
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`This Document Relates To:
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`Indirect Purchaser Actions
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`
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`MDL No. 2567
`CASE No. 14-md-02567
`
`
`Judge Gary A. Fenner
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`INDIRECT PURCHASERS’ FIRST AMENDED
`CONSOLIDATED CLASS ACTION COMPLAINT1
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`Plaintiffs Mario Ortiz, Stephen Morrison, Steven Tseffos, Troy Winters, Thomas Gane,
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`Mark I. Stevens, Richard Paradowski, John Gilbert, Gary Snow, William S. Vincent, Jr.,
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`Nicholas Pulli, Gary Sage, Kevin Dougherty, Josh Bartholow, and Allan Disbrow, on behalf of
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`themselves and all others similarly situated, upon knowledge with respect to their own acts and
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`upon information and belief and investigation by counsel with respect to all other matters, allege
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`as follows:
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`I.
`
`INTRODUCTION
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`1.
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`This action arises out of a conspiracy to fix fill levels of exchangeable portable
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`cylinder tanks containing propane gas commonly referred to as “propane exchange tanks.” The
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`conspirators are the two leading distributers of such tanks: Ferrellgas Partners, L.P and
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`Ferrellgas, L.P. (doing business as Blue Rhino) and AmeriGas Partners, L.P. (doing business as
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`AmeriGas Cylinder Exchange).
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`
`1 This First Amended Consolidated Class Action Complaint is filed as an administrative
`summary of claims and is not intended to supersede previous Complaints with the exception
`of the Consolidated Class Action Complaint (Doc. 105), and the pleadings in Ortiz et al v.
`FerrellGas Partners, et al. (Filed May 30, 2014, D. Kan.). See Doc. 143, at 4-5. Indirect
`Purchaser Plaintiffs specifically reserve all appeal rights relating to the Court’s order of July
`2, 2015 (Doc. 162) granting, in part, Defendants’ motion to dismiss the Consolidated Class
`Action Complaint.
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`2.
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`Blue Rhino and AmeriGas distribute their propane exchange tanks through tens of
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`thousands of retail partners across the United States, including grocery stores, convenience stores
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`and gas stations. Two of the largest retail partners are Walmart, Inc. (“Walmart”) and Lowe’s
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`Home Improvement Warehouse (“Lowe’s”).
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`3.
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`Tens of thousands of consumers in the United States purchase Defendants’
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`propane tanks to fuel barbeque grills and outdoor heaters.
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`4.
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`In the spring of 2008, Blue Rhino and AmeriGas took advantage of a spike in
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`propane prices to raise their margins. Specifically, Blue Rhino decided to increase margins by
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`reducing the amount of propane contained in its exchange tanks from 17 pounds to 15 pounds.
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`Blue Rhino planned to reduce the fill level in its exchange tanks without a corresponding
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`reduction in the wholesale price. This would have the effect of raising the price per pound of
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`propane to consumers.
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`5.
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`During spring and summer 2008, Blue Rhino unlawfully informed its direct
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`competitor AmeriGas that it intended to implement the fill reduction. AmeriGas then likewise
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`decided to reduce its exchange tanks from 17 pounds to 15 pounds without a corresponding price
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`decrease.
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`6.
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`In summer 2008, Blue Rhino and AmeriGas each began to implement the fill
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`reduction, but were met with stiff resistance from Walmart. Walmart refused to accept the fill
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`reduction, pointing out that it was effectively a price increase. Because of Walmart’s market
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`power and ability to purchase from either Blue Rhino or AmeriGas, neither company could
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`unilaterally implement the fill reduction without risking the loss of Walmart’s business.
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`7.
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`Blue Rhino’s customer Lowe’s accepted the fill reduction only on the condition
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`that all of Blue Rhino’s other customers – including Walmart – also accept the fill reduction
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`within a short period of time.
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`8.
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`Faced with resistance from Walmart, Blue Rhino and AmeriGas colluded by
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`secretly and illegally agreeing to maintain a united front to push their joint customer, Walmart, to
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`accept the fill reduction.
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`9.
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`This concerted action had the purpose and effect of raising the effective wholesale
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`prices at which Blue Rhino and AmeriGas sold propane exchange tanks to Walmart, as well as to
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`other customers in the United States.
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`10.
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`Defendants’ conduct has restrained price competition and led to higher prices for
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`sales of propane exchange tanks in the United States. As a result of Defendants’ conduct,
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`consumers were and continue to be cheated out of hundreds of thousands if not millions of
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`pounds of propane, and, therefore, effectively paid more than they otherwise would have for
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`propane contained in propane exchange tanks.
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`II.
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`JURISDICTION AND VENUE
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`11.
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`This Court has subject matter jurisdiction over this action pursuant to 15 U.S.C.
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`§§ 4 and 15 and 28 U.S.C. §§ 1331 and 1337, in that this action arises under the federal antitrust
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`laws. This Court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. §
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`1367(a).
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`12.
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`This Court has personal jurisdiction over Defendants because they conduct
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`sufficient business in this state to satisfy due process.
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`13.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) pursuant to the
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`October 16, 2014 Order of the United States Judicial Panel on Multidistrict Litigation
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`transferring multiple actions to this District for coordinated or consolidated pretrial proceedings.
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`14.
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`Venue is also proper in this judicial district under 28 U.S.C. §§ 1391(b)(1) and
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`1391(b)(2) because Defendants conduct business in this judicial district, and because a
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`substantial part of the acts or omissions giving rise to the claims set forth herein occurred in this
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`judicial district.
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`III.
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`PARTIES
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`Plaintiffs
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`Plaintiff Stephen Morrison is a resident of Frisco, Texas, and a consumer of
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`A.
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`15.
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`propane exchange tanks sold by Defendant Blue Rhino.
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`16.
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`Plaintiff Mario Ortiz is a resident of Phoenix, Arizona, and a consumer of propane
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`exchange tanks sold by Defendant AmeriGas.
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`17.
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`Plaintiff Steven Tseffos is a resident of Phoenix, Arizona, and a consumer of
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`propane exchange tanks sold by Defendants Blue Rhino and AmeriGas.
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`18.
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`Plaintiff Troy Winters is a resident of Superior, Wisconsin, and a consumer of
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`propane exchange tanks sold by Defendants Blue Rhino and AmeriGas.
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`19.
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`Plaintiff Thomas Gane is a resident of Menomonie, Wisconsin, and a consumer of
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`propane exchange tanks sold by Defendant Blue Rhino.
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`20.
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`Plaintiff Mark I. Stevens is a resident of Janesville, Wisconsin, and a consumer of
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`propane exchange tanks sold by Defendant AmeriGas.
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`21.
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`Plaintiff Richard Paradowski is a resident of St. Francis, Wisconsin, and a
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`consumer of propane exchange tanks sold by Defendants Blue Rhino and AmeriGas.
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`22.
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`Plaintiff John Gilbert is a resident of Oconomowoc, Wisconsin, and a consumer
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`of propane exchange tanks sold by Defendant Blue Rhino.
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`23.
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`Plaintiff Gary Snow is a resident of Farmington, Maine, and a consumer of
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`propane exchange tanks sold by Defendant Blue Rhino.
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`24.
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`Plaintiff William S. Vincent, Jr. is a resident of Bridgton, Maine, and a consumer
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`of propane exchange tanks sold by Defendant AmeriGas.
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`25.
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`Plaintiff Nicholas Pulli is a resident of Guildhall, Vermont, and a consumer of
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`propane exchange tanks sold by Defendants Blue Rhino and AmeriGas.
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`26.
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`Plaintiff Gary Sage is a resident of Searsburg, Vermont and a consumer of
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`propane exchange tanks sold by Defendant Blue Rhino.
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`27.
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`Plaintiff Kevin Dougherty is a resident of North Clarendon, Vermont and a
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`consumer of propane exchange tanks sold by Defendants Blue Rhino and AmeriGas.
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`28.
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`Plaintiff Josh Bartholow is a resident of Wilmington, North Carolina, and a
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`consumer of propane exchange tanks sold by Defendants Blue Rhino and AmeriGas.
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`29.
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`Plaintiff Allan Disbrow is a resident of Lockport, New York, and a consumer of
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`propane exchange tanks sold by Blue Rhino.
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`B.
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`30.
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`Defendants
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`Defendant Ferrellgas Partners, L.P., is a limited partnership organized, existing
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`and doing business under and by virtue of the laws of the State of Delaware, with its principal
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`place of business located at 7500 College Boulevard, Overland Park, Kansas. It maintains a
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`nearly complete interest in and conducts its business activities primarily through Defendant
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`Ferrellgas, L.P.
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`31.
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`Defendant Ferrellgas, L.P., is a limited partnership organized, existing and doing
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`business under and by virtue of the laws of the State of Delaware, with its principal place of
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`business located at 7500 College Boulevard, Overland Park, Kansas. Ferrellgas, L.P., doing
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`business as Blue Rhino, operates a national propane distribution business, and owns or has access
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`to distribution locations nationwide. Its business includes the filling, refilling, refurbishing, sale
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`and distribution of propane exchange tanks under the Blue Rhino name.
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`32.
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`For the purposes of this complaint, “Blue Rhino” shall refer to Ferrellgas Partners,
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`L.P., and Ferrellgas, L.P., collectively.
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`33.
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`Defendant AmeriGas Partners, L.P., is a publicly traded master limited
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`partnership, organized, existing, and doing business, under, and by virtue of, the laws of the State
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`of Delaware, with its office and principal place of business located at 460 North Gulph Road,
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`King of Prussia, Pennsylvania. AmeriGas Partners, L.P., operates a national propane distribution
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`business through its subsidiary, AmeriGas Propane, L.P.
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`34.
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`Defendant AmeriGas Partners, L.P., through AmeriGas Propane, L.P., is engaged
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`in the marketing and sale of propane and propane supply related services, including the
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`distribution and supply of bulk propane to residential, commercial, and agricultural customers,
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`and the preparing, filling, distributing, marketing, and sale of propane exchange tanks. AmeriGas
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`Propane, L.P. often does business as AmeriGas Cylinder Exchange when preparing, filling,
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`distributing, marketing, or selling propane exchange tanks.
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`IV. RELEVANT MARKET
`
`35.
`
`36.
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`The relevant market is the marketing and sale of propane exchange tanks.
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`There are no widely used substitutes for propane exchange tanks that provide a
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`similar ease of use. No other product significantly constrains the prices of propane exchange
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`tanks.
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`37.
`
`Prior to the introduction of propane exchange tanks, the only option for
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`consumers who needed to purchase propane for outdoor grills, patio heaters, or similar uses was
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`to purchase an empty cylinder and bring it to a filling location. In the 1990s, Defendants began
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`providing exchange tanks, allowing consumers to exchange their empty cylinders for prefilled
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`tanks, paying only for the propane. Propane exchange tanks quickly became popular due to the
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`convenience and safety benefits for retailers in dispensing with large on-site propane tanks and
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`training employees to perform refilling services, as well as the convenience and ease for
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`consumers of obtaining a fresh, refurbished tank rather than refilling an old cylinder. This has
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`led to a decline in the use of direct consumer refilling over the past ten years, such that that
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`form of refilling does not place a constraint on the price of propane exchange tanks.
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`38.
`
`The relevant geographic market is the United States. Most propane is produced
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`in the Gulf Coast or Midwest, but can be sold nationwide due to the relative ease of
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`transportation. To compete effectively for sales to national retailers, including Walmart, The
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`Home Depot and Lowe’s, propane exchange tank manufacturers need access to refilling and
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`refurbishing facilities located throughout the United States. Propane exchange tank suppliers that
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`lack nationwide access to such assets are unable to constrain the prices of propane exchange
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`tanks. As Blue Rhino stated in its 2013 Form 10-K, there are “few propane distributors that can
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`competitively serve commercial and portable tank exchange customers on a nationwide basis. . .
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`. [I]nvestments in technology similar to ours require both a large scale and a national presence,
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`in order to generate sustainable operational savings to produce a sufficient return on
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`investment.”
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`39.
`
`At all times relevant to this complaint, Blue Rhino and AmeriGas were the two
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`largest suppliers of propane exchange tanks in the United States. Blue Rhino controlled
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`approximately 50 percent of the United States wholesale propane exchange tank market;
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`AmeriGas controlled approximately 30 percent of the market. No other competitor served more
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`than nine percent of the market. No other competitor was capable of servicing large national
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`retailers such as Walmart and Lowe’s, except on a limited basis.
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`40.
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`Beginning in or about 2006, Defendants entered into a series of “co-packing
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`agreements.” Pursuant to these agreements, each company agreed to refurbish and refill propane
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`exchange tanks for the other company at certain of each company’s facilities. Employees from
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`Blue Rhino and AmeriGas participated in regular calls to discuss their co-packing agreements,
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`presenting ample opportunities for conspiratorial communications.
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`41.
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` Today, each Defendant processes slightly less than ten percent of the other
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`company’s used, empty tanks pursuant to co-packing agreements. Blue Rhino refurbishes and
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`refills exchange tanks for AmeriGas at Blue Rhino facilities in Florida, Colorado, Washington
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`and Missouri. AmeriGas refurbishes and refills exchange tanks for Blue Rhino at AmeriGas
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`facilities in California and New Hampshire.
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`42.
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`These co-packing agreements
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`impose significant costs on consumers by
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`facilitating the exchange of pricing information between two direct competitors. The benefits of
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`the agreements are minimal and outweighed by the anticompetitive effects.
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`43.
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`Industry practice is to implement fill reductions at the same time in all retail
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`channels. This is because of the administrative difficulties of maintaining different fill levels at
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`different retailers and because Defendants’ customers will not accept lesser fill levels than their
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`competitors, going so far as to insert clauses into their contracts guaranteeing that their fill level
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`will be the same as their competitors. Therefore, the failure of a large customer, such as Walmart,
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`to accept a proposed fill reduction effectively prevents implementation of the reduced fill level at
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`other retailers.
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`V.
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`OVERVIEW OF THE MARKET
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`44.
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`Propane is a clean burning, colorless gas. Propane exchange tanks are commonly
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`used to operate gas grills, patio heaters, outdoor fireplaces and mosquito traps.
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`45.
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`Propane exchange tanks have a maximum capacity of 25 pounds, but pre-2002
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`safety regulations limited the filling of such tanks to 80 percent of their capacity, i.e., 20 pounds.
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`Beginning in 2002, the National Fire Protection Association modified its standards to require that
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`propane exchange tanks be equipped with an overfilling protection device (“OPD”). Defendants’
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`adoption of the OPD standard necessitated a further reduction in fill levels to approximately 17.5
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`pounds of propane.
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`46.
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`Propane exchange tanks sold in the United States are highly standardized products
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`consisting of a standardized tank and a standardized valve system. Propane and propane
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`exchange tanks are homogeneous products.
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`47.
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`Propane exchange tanks are typically sold to consumers through home
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`improvement stores, hardware stores, mass merchandisers, supermarkets, convenience stores and
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`gas stations. Retailers who sell propane exchange tanks usually offer consumers the option of
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`purchasing a prefilled tank in exchange for an empty tank, or, for a higher price, a prefilled tank
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`without returning an empty tank.
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`48.
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`Propane exchange
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`tanks sold
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`in
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`the United States are
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`functionally
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`interchangeable, and Defendants, their competitors and the retailers who sell them treat them as
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`such. Consumers can exchange any propane exchange tank at any store that carries propane
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`exchange tanks without regard for which company supplied the tank to be exchanged.
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`49.
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`To serve retail outlets that sell propane exchange tanks, Defendants and their
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`competitors need access to refurbishing and refilling facilities, where empty tanks can be
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`cleaned, refurbished, repainted and refilled. As discussed above, pursuant to co-packing
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`agreements, Defendants may refurbish and refill each other’s tanks at some facilities.
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`VI. ANTICOMPETITIVE CONDUCT
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`50.
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`In early 2008, Defendants faced a spike in propane exchange tank input costs,
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`including the price of propane.
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`51.
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`In or about January 2008, Defendant AmeriGas considered a plan to recoup its
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`rising input costs by reducing the fill level in its propane exchange tanks. AmeriGas decided not
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`to pursue the fill reduction plan because, among other reasons, AmeriGas believed it could be
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`competitively disadvantaged if other companies in the industry did not follow AmeriGas’s lead
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`by also reducing the fill level in their propane exchange tanks.
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`52.
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`In April 2008, Blue Rhino management approved a proposal to reduce the fill
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`level in the company’s propane exchange tanks from the then-standard 17 pounds to 15 pounds,
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`without a corresponding price reduction, to offset the increased input costs. The Blue Rhino
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`proposal included a plan to inform AmeriGas in advance of the proposed fill reduction.
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`53.
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` Blue Rhino understood that unilaterally reducing the fill level in its exchange
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`tanks risked putting the company at a competitive disadvantage if its principal competitor,
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`AmeriGas, did not also reduce fill levels. Blue Rhino was particularly concerned about its
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`competitive standing with its second largest customer, Walmart, because Walmart purchased
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`tanks from both Blue Rhino and AmeriGas.
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`54. Walmart is the largest propane exchange tank retailer in the United States. Blue
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`Rhino services approximately 60 percent of the Walmart locations nationwide, while AmeriGas
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`services approximately 35 percent. Ozark Mountain Propane Company (“Ozark’), a smaller
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`regional propane supplier, services the remaining Walmart locations.
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`55.
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`The Blue Rhino Director of Strategic Accounts responsible for Walmart reported
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`to his manager that the fill reduction could put Blue Rhino at a competitive disadvantage to
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`AmeriGas. He stated: “[I]n my mind the ‘watch out’ is the competitive difference between
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`[Blue Rhino, AmeriGas] and Ozark. We are offering less product vs. [Walmart’s] other 2
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`suppliers. . . . Once we explain this is a done deal (and that we are not asking for [Walmart’s]
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`input or letting him decide), he may become resentful and threaten to take states. . . . Then, we
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`need to pray that [AmeriGas] takes a similar move as soon as possible. If [AmeriGas] doesn’t
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`move, we will have a BIG issue.” He elaborated: “The only thing that can make this go away is
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`if AmeriGas goes to 15 as well, but it has to happen very soon after us to legitimize our move.”
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`56.
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`On or about April 22, 2008, Blue Rhino decided to inform Walmart of its fill
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`reduction plan.
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`57.
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`On or about April 28, 2008, Blue Rhino’s Director of Strategic Accounts met with
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`the Walmart buyer and announced Blue Rhino’s intention to reduce the fill in its propane
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`exchange tanks. Walmart rejected the proposed fill reduction. Walmart’s buyer told the Blue
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`Rhino Director of Strategic Accounts that the fill reduction was a price increase to which
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`Walmart would not agree. He also told Blue Rhino’s Director of Strategic Accounts that
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`Walmart did not want to carry propane exchange tanks with different fill levels—that is, tanks at
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`15 pounds in stores serviced by Blue Rhino and tanks at 17 pounds in stores serviced by
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`AmeriGas and Ozark.
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`58.
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`On or about April 29, 2008, a senior Blue Rhino manager ordered production
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`managers to “stand down” on implementation of the fill reduction because “[t]he call with
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`WalMart did not go according to plan.”
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`59.
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`Starting with Blue Rhino’s communication plan in April 2008, which revealed
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`Blue Rhino’s intention to let AmeriGas know “well in advance” about the fill reduction, and
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`continuing through a series of communications through June 2008, Blue Rhino informed
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`AmeriGas of its plan to raise prices by reducing the fill level in Blue Rhino’s exchange tanks
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`from 17 to 15 pounds without a corresponding price decrease.
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`60.
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`On or about May 23, 2008, Blue Rhino’s Vice President of Operations, Jay
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`Werner, met with AmeriGas’s vice president responsible for the propane exchange tank business.
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`The meeting was allegedly to discuss additional opportunities to refurbish, wash, and fill each
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`other’s tanks; however, the executives toured each other’s facilities and discussed the fixed costs
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`of the facilities. At the end of the meeting, Werner brought up the idea of reducing the propane
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`in Blue Rhino’s tanks from 17 to 15 lbs.
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`61.
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`At the same meeting, Werner and AmeriGas’s vice president discussed Werner’s
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`communications with Kosan Crisplant, a distributor and operator of propane filling equipment.
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`Kosan Crisplant could build and operate propane wash and fill facilities. Werner told Kosan
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`Crisplant that if it built a plant in the Northeast United States, it could wash and fill tanks for
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`Blue Rhino and AmeriGas. However, Blue Rhino and AmeriGas would not allow Kosan
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`Crisplant to wash and fill tanks for Heritage Propane, a small but aggressive competitor of Blue
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`Rhino and AmeriGas.
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`62.
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`On May 29, 2008, Blue Rhino proposed the fill reduction to Lowe’s, Blue
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`Rhino’s largest retail customer. Approximately two weeks later, Lowe’s agreed to accept 15-
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`pound exchange tanks on the condition that Blue Rhino convert all of its customers, including
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`Walmart, to 15-pound tanks within 30 days.
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`63.
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`On June 18, 2008, Blue Rhino’s President, Tod Brown, telephoned AmeriGas’s
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`Director of National Accounts, Ken Janish. The two men called each other six more times over
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`the next 30 hours. The following day, Blue Rhino account executives again discussed the fill
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`reduction with Walmart. Following the last of these calls, Brown reported, “I’ve continued to
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`have a lot of inquiries from [AmeriGas] regarding the lower fuel fill due to their need to adjust
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`production. I’ve been told that it would be very challenging to produce two different size
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`products long-term. . . once again, messaging that they’ll follow closely behind us in the market.”
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`Janish had similar conversations with employees of Blue Rhino on numerous occasions from at
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`least as early as 2007 until at least late 2010.
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`64.
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`Other AmeriGas executives were aware of and condoned Janish’s unlawful
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`conversations with Blue Rhino, as those conversations were frequently mentioned during
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`AmeriGas business meetings and bi-weekly sales and operations conference calls. The
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`AmeriGas executives who participated in these calls and were aware of Janish’s discussions
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`with Blue Rhino included President and CEO Gene Bissell, Director of Operations Bo Cornall,
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`Vice President Carey Monaghan, Vice President Joe Powers, National Account Manager
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`Michele McMahon, and National Account Manager Randy Doub.
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`65.
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`During calls and meetings with these and other AmeriGas executives, Janish
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`repeatedly dismissed concerns that Blue Rhino might undercut AmeriGas on price or fill levels
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`with words to the effect of, “I talked to Blue Rhino, and that’s not going to happen.”
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`66.
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`On June 20, 2008, AmeriGas management produced a draft budget with a plan for
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`reducing the fill level of AmeriGas’s exchange tanks from 17 to 15 pounds.
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`67.
`
`On or about June 25, 2008, Tod Brown and Senior Vice President of Sales and
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`Marketing for Ferrellgas, Inc. called AmeriGas’s president of sales and marketing to discuss the
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`fill reduction again. Also on June 25, 2008, Blue Rhino began notifying its customers of its plans
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`to reduce the fill level in its propane exchange tanks effective July 21, 2008.
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`68.
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`As alleged above, AmeriGas considered and rejected a plan to unilaterally reduce
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`the fill level in its propane exchange tanks. AmeriGas believed it could be competitively
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`disadvantaged if other companies in the industry did not also reduce the fill level in their propane
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`exchange tanks. After learning that Blue Rhino planned to reduce the fill level of its exchange
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`tanks, AmeriGas reconsidered its earlier decision.
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`69.
`
`On or about June 26, 2008, Jay Werner of Blue Rhino and an AmeriGas employee
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`discussed operational changes needed for the fill reduction. Representatives from the two
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`companies also discussed the timing of the first distribution of under-filled propane exchange
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`tanks to their customers.
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`70.
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`By the last week of June 2008, Blue Rhino and AmeriGas agreed on the fill
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`reduction. Blue Rhino would begin selling tanks with 15 pounds of propane on July 21, 2008.
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`AmeriGas would do the same on August 1, 2008.
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`71.
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`AmeriGas described the change in the propane tank exchange program to its
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`employees by a memorandum dated July 15, 2008: “In an attempt to offset some of these
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`expenses, achieve desired product margins, and maintain retail prices at an attractive level for
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`consumers, AmeriGas Cylinder Exchange and other national providers are transitioning to a 15
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`pound cylinder. This slight decrease from current 17 pound levels will quickly become the
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`industry standard . . . .” (Emphasis added.)
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`72.
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`In announcing the change to its production team, AmeriGas stated: “The
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`cylinders will be filled with 3.5 gallons of propane versus the current 4 gallons. . . . The major
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`competitors in cylinder exchange will also be moving to a 15 pound cylinder and as a result, it
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`will become the industry standard.” (Emphasis added.) The “other national providers” and
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`“major competitors” in the propane exchange industry referred to by AmeriGas include
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`primarily, if not solely, Blue Rhino.
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`73.
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`Blue Rhino was concerned that, if Walmart rejected the fill reduction, other major
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`retailers would also reject the fill reduction on the basis that they would be at a competitive
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`disadvantage if the propane exchange tanks they sold contained less fuel than otherwise identical
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`exchange tanks sold at Walmart.
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`74.
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`In particular, Lowe’s, Blue Rhino’s largest customer, agreed to accept the fill
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`reduction only on the express condition that all Blue Rhino customers would also convert to 15-
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`pound tanks within 30 days of Lowe’s converting to 15-pound tanks.
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`75.
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`For one or all of the reasons set forth above, Blue Rhino and AmeriGas
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`understood they could not sustain the fill reduction unless it was accepted by Walmart.
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`Therefore, when faced with resistance from Walmart, the two companies agreed that neither
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`would deviate from their proposal to Walmart. They worked together to take the steps necessary
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`to push Walmart to promptly accept the fill reduction.
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`76.
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`AmeriGas announced the existence of a united front with Blue Rhino by couching
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`its fill reduction plan as an “industry standard.” For example, on July 10, 2008, AmeriGas’s
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`Director of National Accounts emailed Walmart’s buyer to inform him that “the cylinder
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`exchange industry is planning a move to a standard weight of propane in a tank from 17 lbs. net
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`to 15 lbs. net.”
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`77.
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`On or about July 10, 2008, and continuing for three months thereafter, sales
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`executives from the two Defendants communicated repeatedly by telephone and email to apprise
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`each other of the status of their discussions with Walmart and to encourage each other to hold
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`firm to convince Walmart to accept the reduction in fill.
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`78.
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`On or about July 11, 2008, Blue Rhino’s Vice President of Sales called
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`AmeriGas’s Director of National Accounts. The two sales executives spoke at length by
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`telephone. Internal Blue Rhino documents confirm that AmeriGas and Blue Rhino sales
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`executives discussed Walmart’s rejection of AmeriGas’s proposal to begin shipping 15-pound
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`exchange tanks.
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`79.
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`On or about July 21 and 22, 2008, Blue Rhino’s Vice President of Sales and
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`AmeriGas’s Director of National Accounts spoke at length by telephone. Blue Rhino internal
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`documents confirm that the AmeriGas and Blue Rhino sales executives discussed AmeriGas’s
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`plans for responding to Walmart’s rejection of the fill reduction.
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`80.
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`On or about August 11, 2008, the AmeriGas Director of National Accounts, who
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`was responsible for dealing with Walmart, called Blue Rhino’s Vice President of Sales and told
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`him that he was having trouble getting in touch with Walmart to discuss the reduction in fill
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`levels.
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`81.
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`On or about August 13, 2008, the Blue Rhino sales executives responsible for
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`dealing with Walmart discussed plans for advising AmeriGas of the need to ensure that The
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`Home Depot, AmeriGas’s largest retail customer, was supplied with 15-pound, not 17-pound,
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`tanks, because Walmart would be more likely to accept the fill reduction if it knew that The
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`Home Depot had already accepted it.
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`82.
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`On August 21, 2008, the Blue Rhino and AmeriGas sales executives spoke several
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`times by telephone, and shortly after these communications, the AmeriGas sales executive and
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`AmeriGas’s operations manager directed their colleagues to ensure that The Home Depot store in
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`Rogers, Arkansas (near Walmart’s Bentonville headquarters) carried only 15-pound tanks.
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`83.
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`On September 2, 2008, Blue Rhino’s Vice President of Sales and AmeriGas
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`Director of National Accounts spoke by telephone again. They discussed the status of their
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`respective efforts to convert their customers to 15-pound tanks, as well as the current retail
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`pricing of tanks at Lowe’s.
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`84.
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`On September 12, 2008, Blue Rhino’s Vice President of Sales and AmeriGas’s
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`Director of National Accounts spoke by telephone again. They discussed the status of their
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`negotiations with Walmart. Expressing frustration at Walmart’s intransigence, AmeriGas’s
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`Director of National Accounts suggested that it was time to issue an ultimatum to Walmart. Blue
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`Rhino’s Vice President of Sales responded by telling him that Blue Rhino was continuing to
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`work with Walmart and that AmeriGas should “hang in there.”
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`85.
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`On September 15 and 22, 2008, Blue Rhino’s Vice President of Sales and
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`AmeriGas’ Director of National Accounts spoke again by telephone.
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`86.
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`On September 30, 2008, the AmeriGas Director of National Accounts emailed
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`Blue Rhino’s Vice President of Sales and informed him that Walmart management was meeting
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`the following day to discuss the proposed fill reduction.
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`87.
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`On October 6, 2008, the Lowe’s buyer emailed his Blue Rhino sales executive
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`with an ultimatum. Lowe’s had agreed to accept 15-pound tanks on the condition that all other
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`Blue Rhino customers would be converted within 30 days. Lowe’s observed that Walmart was
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`still selling 17-pound tanks and that Lowe’s was therefore at a competitive disadvantage. The
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`Lowe’s buyer demanded that either all of Blue Rhino’s customers must be at 15 pounds or
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`Lowe’s be converted back to 17-pou