Baltimore, Richmond Sue Companies Over Water Treatment Chemical Price-Fixing

Two mid-Atlantic cities this week alleged that a slew of chemical companies conspired to inflate prices of a compound used to treat their respective water supplies.

Law firm Ballard Spahr on Monday filed antitrust lawsuits on behalf of the cities of Baltimore and Richmond over the prices of aluminum sulfate, which is frequently purchased in bulk by municipalities in order to bind pollutants together and filter them out of the water supply.

The complaints, filed in federal court districts in Maryland and Virginia, respectively, alleged that company executives met to discuss their businesses and planned to suppress competition, including by improperly discussing terms and prices and withdrawing or submitting insufficient bids.

Both cities are reportedly seeking at least $5 million in damages.

Baltimore's lawsuit, according to The Baltimore Sun, named 18 companies as part of the conspiracy and alleged that two local producers — USALCO and GEO Specialty Chemicals — long did not submit bids for Baltimore's water contracts.

The city argued that its aluminum sulfate costs rose from $1.2 million in 1999 to $2.2 million in 2009 as a result of the scheme.

Delta Chemical, which supplied the material to Baltimore for years and was acquired by USALCO in 2011, said that raw material prices necessitated its price increases, but city officials countered that those materials instead became less expensive.

The Richmond Times-Dispatch, meanwhile, reported that the Virginia capital's aluminum sulfate costs quadrupled between 1997 and 2011.

Ballard Spahr said in a statement that a federal criminal investigation previously resulted in guilty pleas by several parties on price-fixing and bid-rigging charges. The Sun added that dozens of additional civil suits filed by local governments are currently before a federal judge in New Jersey.

“When people violate the law by getting together and devising a scheme to stifle competition and overcharge us, they are cheating the taxpayers — and we take that very seriously,” said Baltimore Mayor Catherine Pugh.