The city of San Diego filed a federal antitrust lawsuit Wednesday alleging that a private equity firm and a small number of manufacturing companies have been gouging the city and other municipalities by creating a monopoly on fire engines and their parts, joining a legal fight launched two weeks ago when San Diego County filed a nearly identical lawsuit.
Both suits allege the private equity firm American Industrial Partners has illegally consolidated a previously robust market of smaller, independent fire engine manufacturers to eliminate competition for the critical, lifesaving vehicles and their parts. The suits allege that anti-competitive practices have substantially increased prices, “severely extended delivery timelines” and restrained the county’s and the city’s ability to obtain replacement parts.
“Through their illegal schemes, Defendants have reaped extraordinary profits on the backs of fire departments, taxpayers, cities, and counties,” alleged the lawsuits, both of which were filed in U.S. District Court in San Diego.
The county’s lawsuit, filed April 1, came a year after the Board of Supervisors agreed to look into legal or advocacy actions targeting the corporations that the county and city now say have monopolized the fire truck manufacturing industry.
City Attorney Heather Ferbert said San Diego has been forced to pay as much as four times the fair-market cost for replacement components, costing the city hundreds of thousands of dollars in overcharges for each of those components, which include pumper, aerial and wildland apparatuses.
“Fire trucks aren’t nice-to-haves — they’re essential equipment that every community depends on to save lives,” Ferbert said in a statement. “These companies drove up costs, delayed deliveries for years, and forced cities into overpriced proprietary parts and equipment. This lawsuit seeks to stop these unlawful practices, restore competition, and protect public‑safety budgets statewide.”
When the county filed its suit, a spokesperson for American Industrial Partners told the Union-Tribune, “AIP disagrees with the allegations in the complaint and intends to defend itself vigorously.”
Both lawsuits allege that American Industrial Partners consolidated at least nine formerly independent manufacturers into a single entity known as REV Group and then, having eliminated most competition, began sharply increasing prices. The suits also allege that another manufacturer, Oshkosh Corporation, took steps to ensure that its subsidiary controls the market for chassis and replacement parts, allowing the company to charge high prices for those proprietary parts.
A spokesperson for REV Group told the Union-Tribune earlier this month that the county’s lawsuit was meritless and the company intended to fight the allegations in court.
A spokesperson for Oshkosh said: “The allegations in this lawsuit are without merit, and we are defending ourselves in court. Oshkosh remains focused on delivering safe, high-quality fire trucks while continuing to reinvest in our U.S. operations to meet record demand.”
The lawsuits seek injunctive relief to end the allegedly anti-competitive conduct and unwind previous mergers, as well as restitution and damages for alleged overcharges and civil penalties under California’s Unfair Competition Law.