Ace Corp., Epicor, and Big Ace Dealers Renew Bid to Dismiss Price-Fixing Case

By Craig Webb

Amendments to a class action complaint accusing Ace Hardware Corp. and related parties of fixing prices and controlling access has left the defendants unmoved, as shown Oct. 30 by their renewed motion to dismiss the case.

Attorneys for the defendants also moved Oct. 30 to compel arbitration involving four of five plaintiffs whose purchases form the basis of the complaint. U.S. District Judge Sunil Harjani should issue a stay involving the fifth plaintiffs, the motion said. The plaintiffs now have until Jan. 8, 2027, to reply in the U.S. District Court for the Northern District of Illinois.

Backed by two law firms known for class-action lawsuits, the five plaintiffs allege that Ace stores use their cooperative to raise prices and reduce consumer choice. Data collected by Ace Corp. and sent to Ace member stores are used "to coordinate local prices and divide local markets," thus boosting profit margins, says the 110-page Amended Complaint , filed Sept. 2. Ace also limits where and how Ace stores can be located, plaintiffs allege.

"In other words, the Ace cooperative has been cartelized," the plaintiffs declare, turning Ace "into an organization that facilitates illegal coordination in aid of limiting competition and charging higher prices."

The complaint names as defendants Ace Corp., software provider Epicor and several of the biggest Ace store chains, including Aubuchon Hardware, Costello's Ace Hardware, Potter's Ace Hardware, The Helpful Hardware Co., and Ace Retail Holdings. Ace Retail owns Westlake Ace Hardware and Great Lakes Ace Hardware.

Ace's reply to the Amended Complaint attacks the idea that the co-op fixes prices. "The Complaint ... wrongly labels lawful and competition-enhancing cooperative services (pricing tools, benchmarking reports, software support, and store-location review) as naked price fixing, market allocation, and anticompetitive information exchange," the motion says.

As for controlling trade by limiting who can set up an Ace store and where that store can be located, the defendants stressed that none of the more than 5,000 Ace stores have an exclusive territory. "The Complaint provides no map of territories, no promise by one store to stay out of another’s territory, and no right to exclude any other store from an area," the motion to dismiss says. "It challenges ordinary store-location review in a cooperative system that added hundreds of stores annually—expanding, not restricting, entry."

The five men named as plaintiffs say they are justified in filing the complaint because each of them bought items from Ace stores and thus were subject to alleged damages. However, the defendants noted that four of the five plaintiffs made purchases under the Ace Rewards Program--a program that requires all claims involving Ace products to be settled through arbitration, not in court.

"The Amended Complaint tries to plead around that agreement in two ways," the defendants' motion says. "It first labels plaintiffs Adam Kleekamp and Sean Twomey 'not a member' of Ace Rewards. But Ace’s records show that both used the Rewards Program for their purchases. Plaintiffs William Crim and Gregory Ernst, for their part, admit membership, but they try to avoid the Program Terms by suing only the Ace Store Defendants and Epicor, not Ace Hardware Corp. That tactical choice changes nothing. The arbitration agreement runs to Ace Hardware Corp.'s 'affiliates' (a term that is to be construed broadly) and the plaintiffs allege that the Ace Store Defendants 'own and control' it. [Plaintiff Jason] Goodin’s claims rest on the same alleged conspiracy and should be stayed with the rest."

The Ace dealers involved in the Complaint are:

• W.E. Aubuchon Co., parent of Aubuchon Hardware and stores with other names;

• Bellmore Home Center, owner of Costello's Ace Hardware and Rommel's Ace Home Center;

• Bolster Hardware, owner of Potter's Ace Hardware and other stores;

• The Helpful Hardware Co., which owns nearly two dozen Ace stores;

• Niemann Foods' hardware units;

• Whitmore Ace Hardware; and

• The Helpful Group, corporate parent of Elder's Ace Hardware. One particular Elder's unit, tied to Ace Hardware of Chattanooga Inc., also is newly named as a defendant.