Los Angeles County is suing a private equity firm and three other companies alleging overcharging and state and federal antitrust violations in relation to fire truck purchases.
The defendants in the lawsuit, filed by County Counsel Dawyn R. Harrison on behalf of the county, its fire department, and the people of the State of California, are the private equity firm American Industrial Partners and fire truck manufacturers REV Group, Oshkosh Corporation and Boise Mobile Equipment, according to a news release from Harrison’s office.
The lawsuit claims the defendants’ conduct violated unfair competition laws “for consolidating the fire truck market through a series of anticompetitive mergers, acquisitions and other unfair practices… (that) sharply inflated the cost of fire trucks and parts to fire departments nationwide, including the L.A. County Fire Department,” according to the county counsel’s office.
“Los Angeles County will not allow companies to exploit the fire truck market at taxpayers’ expense,” according to a statement from Los Angeles County Board Chair and First District Supervisor Hilda L. Solis . “These companies have driven up prices, delayed deliveries to unprecedented lengths and forced our communities to shoulder the cost. Fire trucks are essential to protecting public safety, and we are taking action to hold these companies accountable, recover overcharges and ensure fair competition so taxpayers are never left paying more for the tools our first responders need.”
The acquisition and merger activity is alleged to have reduced choice and the supply of firetrucks while prolonging delivery times and, ultimately, jacking up prices.
“As these companies raised their prices, their executives boasted that their backlog for fire apparatus has tripled, growing by over $1 billion, and that their backlog is at an all-time high,” according to the county counsel’s statement, which said the lawsuit alleges Oshkosh required customers of its subsidiary, Pierce Manufacturing, to purchase only Pierce proprietary parts despite cheaper options.
“The L.A .County Fire Department has experienced dramatic price increases and long delays in receiving delivery of fire trucks,” said department Chief Anthony Marrone. “These market conditions strain our budget and are a wasteful diversion of public funds needed to support our mission of protecting lives, environment and property.”
The lawsuit seeks treble damages for overcharges as well as restitution, civil penalties, and injunctive relief in the form of an order requiring unwinding of the anticompetitive mergers and acquisitions.
“My office will not allow corporate profiteers to create an unfair marketplace and line their pockets at the expense of taxpayers and public safety,” Harrison said. “By bringing this lawsuit, we are sending a clear message that we will not tolerate practices that violate the antitrust laws, unfairly consolidate markets and jack up prices for the tools we need to serve the public good.”