04.04.2025

Roofer sues major renters for price fixing

A class action lawsuit filed in the US district court for the northern district of Illinois – Eastern Division, in Chicago, by AXG Roofing and “on behalf of all others similarly situated”, claims that United Rentals has collaborated with at least four of its main competitors, including Sunbelt, Herc Rentals, Sunstate, and H&E Equipment to fix rental rates though data provided by Rouse analytics.

The lawsuit claims that the collaboration process was instigated by a statement that the late Dan Kaplan made while president of Hertz Equipment Rental where he said:
“The pricing pain that is being felt throughout the equipment rental industry right.
now is largely self-inflicted. Poor rate management caused it, and proper rate.
management can stop it... I am challenging the entire rental industry to show.
leadership on rates, and every company to take a critical look at its rate practices,
or risk failing itself and the industry...Fortunately, there is a wealth of technology.
available today to help manage rental rates. If utilised properly, with tiered checks.
and balances, these software programs can bring genuine discipline to rate.
management... Right now, the industry has an opportunity to move toward a more
profitable rate platform, using the fulcrum of current capacity and increased.
demand.”

Rouse – part of the RB Global group, was formed a little after this with the aim of providing its customers with data on rental rate and utilisation tends. Rental companies input their daily rates and other competitively sensitive data which Rouse pooled to create an average daily rate and publish the information as part of its Rental Insights Pricing, which essentially monitors market pricing levels to provide rental companies with an indication of rate trends.

Rental companies still determine their own pricing of course based on their own utilisation leveles and that of their immediate competitors. But what it may well have done is provide more clarity in order to allow the larger companies to improve rate discipline.

The 54 page suit also suggests that rental industry consolidation has also been a part of this ‘conspiracy’ citing the old days when the market was fragmented with small local companies were more ignorant of average industry rates and relied more on what their customers told them other companies were quoting.

The lawsuit seekss unspecified monetary damages under antitrust law, as well as a court order to break up the alleged conspiracy.

The attorneys for the plaintiffs are: Eric Cramer and Michaela Wallin of Berger Montague, Gary Smith and Swathi Bojedla of Hausfeld, along with Natasha Fernández-Silber and Abby Lemert of Edelson.

Commenting on the issue, Sunstate said: “We are committed to operating with the highest standards of integrity, transparency, and compliance and take our obligations under antitrust laws seriously and are confident in the integrity of our business practices. We firmly believe these allegations are without merit and intend to vigorously defend ourselves."

“We remain dedicated to acting ethically and responsibly in all aspects of our business. We appreciate the trust our customers, employees, and stakeholders place in us and will continue providing exceptional products and services.”

RB Global issued a statement that said: "the claims are meritless and mischaracterise Rouse Rental Insights’ business practices and the competitive nature of the rental industry. Rouse Rental Insights is purposefully configured to comply with all regulations, including competition and antitrust laws. We intend to vigorously defend the company.”

Vertikal Comment

From a quick glance through the paperwork, this is a well documented and researched case but is based on the assumption that by consolidating the industry and working more knowledgeably rental companies it goes without saying that rental companies are colluding and conspiring. This will be very hard to prove and can be refuted easily by the facts.

Airlines, hotels and many other industries compare pricing and availability on a daily basis and use that information in their dynamic pricing programmes – all too often the price of a flight is exactly the same no matter which airline you look at. It is true this can be frustrating for the buyer and can look like price fixing. But numerous investigations into many of these cases has not found any evidence of price fixing.

It looks as though the main argument here is that the market was better when roofing companies like this – who will be using equipment rental prices as part of their calculations when quoting for work – could bamboozle small rental companies into cutting prices simply by informing them that ‘the guy up the road had offered a much better deal' and that they would need to match it.

At this stage of the process it looks as though it will be a major challenge for the claimant and its anticipated class action partners to prove their case, but… who knows?

One thing is for sure the case is likely to drag on for years with little to no impact, but it will carry an ongoing cost for the defendants, but nothing is likely to happen in the short to medium term.