On February 9th, 2024, in the United States Northern District of California, Walmart and Energizer Holdings’ motion to dismiss three potential class actions against over allegations they colluded to raise and fix battery prices was denied.

Schneider Wallace is a national plaintiff and consumer law firm representing those injured after anticompetitive behavior, and represents plaintiffs here against Walmart and Energizer. If you believe you have been affected by an anticompetitive action, schedule an appointment with our legal team to learn more about filing an antitrust class action lawsuit.

California and Federal Antitrust Laws 

California and federal law both have antitrust laws and prohibit anticompetitive behavior.

Federal:

The Sherman Antitrust Act, originally passed in 1907, contains multiple sections detailing limits of corporate behavior regarding anticompetitive actions. Price fixing, vertical corporate relationships, the formation of monopolies or monopoly like behavior via exclusive contracts, tie-ins, or predatory pricing are all actions covered by federal law.

Regarding this litigation, the Sherman Antitrust Act first and third acts prohibit the alleged behavior:

Section 1: The first section of the Sherman Antitrust Act prohibits monopolization attempts, monopolies, or conspiracies to monopolize a market. It covers multiple types of actions including exclusive dealing contracts and predatory pricing.

Section 3: Extends the reach of the Act.

California:

California, through the Cartwright Act and other laws, largely copies and extends federal law. The Cartwright Act contains multiple sections, including: 

Section 16720:  Defines a “trust” as any group (two or more) that engage in the following behavior:

1. Create or carry out restrictions on trade.
2. Limit production of or increase the price of merchandise.
3. Prevent competition in purchase, sale, transport, or manufacturing of a product.
4. Price fixing.
5. Entering into contracts, agreements or obligations enforcing or allowing the actions listed above.

Section 16721: Defines monopoly. 

Section 16722: Prohibits monopolies and trusts. 

Section 16726: Creates a felony for attempts or conspiracy to form a monopoly or trust. 

Section 16750: Allows for recovery of damages through lawsuits.

Section 16760: Prohibits mergers that would reduce competition.

Alleged Anticompetitive Scheme to Inflate Battery Prices

The Complaint alleges that a scheme by Walmart and Energizer consisted of the following alleged actions:

1. Energizer agreed to inflate wholesale pricing above competitive levels to direct customers other than Walmart.
2. Energized agreed to have their direct purchasers charge no less than Walmart pricing, even if Walmart charged a large margin above wholesale pricing.
3. Energizer internally policed direct purchasers retail pricing to ensure Walmart pricing was not undercut. If resellers were not compliant with the scheme, Energizer raised wholesale prices on the customer offering low prices until they could no longer do so.
4. The alleged scheme was overall facilitated by the market share of Energizer, over 50%, combined with a duopoly in the market with only one main competitor (Duracell).
5. Walmart maintained high pricing for Duracell to remove competition for pricing from the one main competitor.
6. Price rose by 30% while Energizer products decreased.

A full read of the allegations in the complaint can be found here.  Todd Schneider, Jason Kim, Matt Weiler, and Mahzad Hite are the named attorneys from Schneider Wallace representing plaintiffs.

 Court Analysis of Plaintiff’s Complaints

The court denied the defendant’s motion to dismiss, stating Plaintiffs had adequately pleaded their allegations of violations of federal and California antitrust and consumer protection laws.

From the analysis section of the order denying dismissal:

1. “Plaintiffs Have Adequately Pleaded a Violation of the Sherman Act”
2. “Plaintiffs Plausibly Allege that Defendants Had an Agreement”
3. “Plaintiffs Plausibly Allege that the Agreement is Unreasonable”
4. “All Three Sets of Plaintiffs Have Antitrust Standing”
5. “Plaintiffs Have Adequately Pleaded Their State Law Claims”
6. “Plaintiffs Have Article III Standing to Pursue Their State Law Claims”
7. “Plaintiffs Have Adequately Pleaded State Antitrust Claims”
8. “Plaintiffs Have Adequately Pleased State Consumer Protection Claims”.

  The court concluded by denying the motion to dismiss.

  Federal Antitrust Lawyers 

Regarding the denied to dismiss and continued litigation, as quoted by Reuters, partner Todd Schneider stated “We look forward to bringing this matter to trial”.

Our national trial firm maintains offices in Northern and Southern California, Texas, and Puerto Rico, and represent clients in many nationally and in many other states. We represent both businesses and consumers who have suffered damages due to anticompetitive conduct. If you believe you have been affected by an anticompetitive action, contact our antitrust team for a legal consultation. Schneider Wallace Cottrell Konecky LLP is a national law firm that represents consumers in a wide range of cases, contact us at 1-800-689-0024.