Ace Seeks Dismissal of Price-Fixing Lawsuit, Arbitration Over Plaintiff's Original Complaint

By Craig Webb

Attorneys for Ace Hardware Corp., its units, and Epicor have urged a U.S. District Judge to dismiss a proposed class-action lawsuit that claims Ace fixes prices and limits store expansions. Separately, they said disputes concerning the two purchases at Ace stores that underlie the lawsuit are supposed to be settled via arbitration, not in court.

The Aug. 3 fillings represent the first major actions in the case since the complaint was filed on May 7. That filing argues Ace illegally coordinates members' prices and locations, thus driving up Ace store prices and profits. A July 30 videoconference between defendants and plaintiffs failed to produce an agreement. Defendants have until Oct. 2 to reply, and then defendants must answer by Oct. 30.

The official plaintiff is Sean Twomey of Palos Heights, IL, who is in the case because he purchased products at two Ace stores. The attorneys representing him are from two law firms with a history of winning class action suits and settlements against institutions like Philip Morris and Alphabet's Google Play Store.

In the motion for dismissal, Ace rejected claims that Ace operates a cartel by taking data on sales and prices and telling members the prices they should set in order to gain maximum profit margins. It said services that the Ace co-op provides--among them pricing tools, benchmarking reports, software support, and store-location reviews--are wrongly labeled by the plaintiffs as price-fixing, market allocation, and anticompetitive exchanges of information.

"Antitrust complaints must plead facts that make a conspiracy plausible," the motion for dismissal states, emphasizing the word "plausible. "This one does not."

The complaint does not plausibly suggest a horizontal agreement among competitors, the motion continues. The motion also argues that none of the 5,000+ Ace stores has receive an exclusive territory, and that information sharing "is not inherently anticompetitive and can be procompetitive."

Ace attorneys also stressed that antitrust claims against the co-op lose value when one considers that Ace customers can go to The Home Depot, Lowe's Amazon, Walmart, Menards, or a slew of other competitors. "No plausible antitrust complaint can proceed on the theory that a customer shopping for items like paint, mulch, tools, batteries, grills, and many household items would view Ace (and sometimes Do it Best, a competitor chain) as the only option," it says.

Ace doesn't have any enforcement mechanism or punishment for deviating from its suggested prices, the motion says. And it doesn't require the use of Epicor software.

As for complaints that Ace Hardware Corp. controls where stores are located, the co-op does review applications from prospective Ace stores regarding a specific location, but it also tells the applicant that they won't get an exclusive territory. "The Complaint alleges that Ace Stores cannot relocate without [Ace Hardware Corp.] approval nor sell their store without giving AHC a right of first refusal," the motion says. "It does not address whether these are standard franchise-style quality controls, versus evidence of market division."

The plaintiffs' complaint--and foundation reason for the request that it become a class action--springs from Sean Twomey's purchase of five items for $48.95 at Palos (IL) Ace Hardware on Nov. 26, 2025, and of two items for $22.47 bought at Duke's Ace Hardware on Dec. 23, 2025.

Ace attorneys noted that Sean Twomey bought those items using an Ace Rewards Account held by his wife, Erica Twomey.

"The Ace Rewards Program Terms and Conditions have a binding arbitration provision that broadly covers all claims' relating to the alleged purchases," Ace attorneys wrote. "Twomey assumed the obligations of the Program Terms when he made his purchases through the Ace Rewards Program. He now asks this Court to resolve antitrust claims concerning allegedly overpriced products. He has chosen the wrong forum. ... Ace respectfully requests that the Court compel Twomey to arbitrate his claims on an individual basis and stay this action pending completion of the arbitration."