The Antitrust Attorney Blog
Author: Aaron Gott
Seven U.S. cities have filed antitrust suits in five weeks against two manufacturers of “fire apparatus”—and the lawsuits are consolidating into a federal multidistrict litigation in the Eastern District of Wisconsin.
The case is about fire trucks. If you have ever been the parent of a five-year-old, you probably have heard about just how awesome fire trucks can be. But you probably don’t make fire trucks or use them in your business.
You should still take note of this litigation. Especially if you’re in private equity, at an acquisition-driven company, or serve markets involving specialized products or institutions like municipalities.
The defendants—REV Group and Oshkosh Corporation’s Pierce Manufacturing subsidiary, along with several entities connected to private equity investor American Industrial Partners—are accused of violating Sections 1 and 2 of the Sherman Act and Sections 3 and 7 of the Clayton Act. The theory is straightforward: through a series of acquisitions, two players came to dominate the fire apparatus market, and the alleged result is what antitrust lawyers call an “acquisition monopoly.”
This is not a new legal theory, but it is a legal theory that, just a few years ago, was unlikely to turn into a major MDL. A plaintiff’s burden on a monopolization claim under Section 2 is historically much more difficult to meet than a price-fixing claim under Section 1 because the latter is per se illegal, requiring no proof of anticompetitive effect, and face fewer doctrinal hurdles. So the antitrust class plaintiffs’ bar rarely brought them.
That’s changing, and acquisition-based monopolization claims could be a driving factor. The fire apparatus MDL is an example: just look at the pace at which top plaintiffs’ firms are filing cases, the involvement of municipalities as plaintiffs, and the rapid MDL consolidation. This could be a new era of sprawling antitrust blockbusters not centered on allegations of a price-fixing cartel.
Here is what you need to understand about acquisition monopolies.
What “Acquisition Monopoly” Actually Means
Section 2 of the Sherman Act prohibits monopolization—defined as (1) the possession of monopoly power in a relevant market, and (2) the willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of superior product, business acumen, or historical accident.
The word “willful” is where acquisitions get complicated. Courts have long recognized that a company can violate Section 2 not by outcompeting rivals, but by buying them. Where each acquisition is a deliberate step in a strategy to eliminate competition and entrench market dominance, the cumulative pattern can satisfy Section 2’s willfulness requirement even if any individual deal was commercially rational on its face.
The Clayton Act adds another layer. Section 7 prohibits any acquisition—of stock or assets—where the effect “may be substantially to lessen competition, or to tend to create a monopoly” in any line of commerce or any section of the country. Note the word “may.” Section 7 is forward-looking: it catches transactions at the point where competition might be substantially harmed, not only after the damage is done. When a series of acquisitions is alleged, plaintiffs can argue both that individual deals violated Section 7 as they occurred and that the pattern of acquisitions collectively violates Section 2.
That is the double-barrel structure: Clayton Act Section 7 targets the deals as they happened; Sherman Act Section 2 targets the market power that resulted. Both claims are in the fire apparatus complaints.
The Specialized Market Problem
Antitrust liability under Section 2 depends critically on how the relevant market is defined. Market concentration and power can more easily be established where product specifications are highly customized, procurement cycles are long, and the number of qualified suppliers is small by nature.
Fire apparatus is that kind of market. Municipal fire departments operate under precise technical specifications—apparatus must meet NFPA standards, comply with state fire codes, and satisfy local procurement requirements. Fire trucks are not commodity equipment. The design, engineering, and production timelines make this a market with high barriers to entry, long customer relationships, and limited competitive alternatives.
Plaintiffs in specialized-equipment cases have an easier time with market definition because the product’s own characteristics draw the boundary. When you make the only commercially viable product for a specific application—or one of two—that fact does much of the plaintiffs’ work and makes it harder for defendants to argue a broader market such that monopoly power disappears.
How Courts Evaluate Roll-Up Claims
Plaintiffs’ antitrust lawyers have learned how to structure acquisition-monopoly cases, and the template is worth understanding.
The theory typically runs like this: defendant or its PE sponsor conducted a buy-and-build strategy, acquiring companies A, B, C, and D over a period of years; each acquisition eliminated a meaningful competitor; post-acquisition, defendant raised prices, reduced product quality, or restricted output; and the cities or businesses that purchased the product paid more than they would have in a competitive market.
Courts do not require plaintiffs to prove that every individual acquisition was anticompetitive. The question is whether the acquisitions, viewed as a course of conduct, reflect a willful strategy to acquire monopoly power. Internal communications—board materials, deal memos, strategic plans—that discuss market consolidation, competitor elimination, or pricing power post-acquisition are among the most damaging documents defendants face in discovery.
Private equity creates a particular documentation problem here. PE sponsors routinely model acquisitions in terms of EBITDA multiples, synergies, and market positioning. Investor presentations may explicitly reference competitor acquisition as a strategy for pricing power. That framing, which is entirely normal in PE deal documents, can look incriminating in an antitrust complaint. The plaintiffs in fire apparatus cases almost certainly obtained public filings, investor presentations, and press releases in which the defendants’ market consolidation strategy was described in terms that plaintiffs’ counsel will characterize as an admission.
Private Plaintiffs, Treble Damages, and the Municipal Angle
What makes the fire apparatus MDL structurally significant is the identity of the plaintiffs: cities. Municipal governments purchase specialized equipment through formal procurement processes, maintain records of every competitive bid, and have institutional incentives to pursue antitrust damages aggressively. Unlike a private commercial buyer who might want to preserve a supplier relationship, a city has no such constraint. Seven cities have filed antitrust lawsuits in five weeks. Others almost certainly will.
This matters because municipal plaintiffs bring several advantages. They have standing under Section 4 of the Clayton Act as direct purchasers—there is no Illinois Brick problem because municipalities buy from the manufacturers, not through distributors. They have procurement records establishing exactly what they paid and when. They have public records laws that make their own purchasing history readily available—and easy for the plaintiffs’ bar to mine for cases. And they have political incentives to pursue large defendants aggressively.
The treble damages provision of the Clayton Act—Section 4—means that if cities prove they paid supracompetitive prices for fire apparatus over a period of years, the damages figure gets multiplied by three. A $500 million overcharge claim becomes a $1.5 billion exposure before attorneys’ fees. With seven cities already in the MDL and more likely coming, the aggregate damages exposure could be substantial.
What Acquisition-Driven Companies Should Know and Do
The fire apparatus MDL could be a bellwether rather than an outlier. Across specialized manufacturing, healthcare equipment, agriculture, and industrial supply, PE-backed consolidation has produced highly concentrated markets in niches where buyers have few alternatives.
If your company has grown through acquisitions in a specialized market, you should:
- Understand your market and market share. “Market” is a legal term of art, not a business concept. The relevant market for antitrust purposes may be considerably narrower than the market your sales team tracks. If you have 60% of a narrowly defined relevant market—and you reached that share through acquisitions—you have meaningful Section 2 exposure.
- Conduct an antitrust audit of your acquisition documents. Internal materials describing buy-and-build strategy, competitor elimination, or post-acquisition pricing power are a standing discovery liability. You need to be aware of what exists, what the litigation risk profile looks like, and whether your antitrust compliance policies extend to deal documentation and integration planning.
- Not view a successful merger clearance as sanitizing. A transaction that cleared HSR review—or that was too small to require filing—can still be challenged afterward under Section 2. The HSR process is a predictive, pre-merger screen; it does not immunize completed transactions from post-hoc antitrust challenge. Section 2 claims are not time-barred until four years after the plaintiff discovered the injury, and ongoing overcharge claims may reset the limitations clock.
- Consider the litigation risk calculus before you find yourself in an MDL. Once an MDL coalesces and plaintiffs’ counsel is coordinating, defense costs escalate sharply. Companies in highly concentrated markets—particularly in sectors where municipalities, hospitals, agricultural cooperatives, and other institutions are the buyers—should assess their exposure regularly.
- Involve outside antitrust counsel now. Antitrust counsel is a critical component at each of these steps.
The Takeaway
The fire apparatus MDL illustrates an antitrust theory that plaintiffs’ lawyers are deploying with increasing frequency. The theory is not complicated: if you acquired your way to dominant market power in a specialized market, you may have a Section 2 problem.
None of this means that every buy-and-build strategy is illegal, or that companies should stop making acquisitions. Strategic acquisitions in concentrated markets can be pro-competitive. But that argument needs to be developed proactively—not assembled in litigation after the fact.