Dive Brief:

• The seven major HVAC manufacturers facing allegations that they conspired to keep product prices artificially high after the pandemic have asked a federal judge to dismiss the charges.
• Each of the manufacturers say their pricing practices stem from their responses to the supply chain disruptions that impacted all manufacturers after the pandemic and from their efforts to recoup costs they incurred to retool their operations to meet federal energy-efficiency and emissions mandates. 
• “After stripping away the innuendo, what remains is the well-documented trend of rising prices spurred by the COVID-19 pandemic, environmental regulations, and tariffs,” say the companies in their motion to dismiss, filed Oct. 9 in federal district court in Michigan. “Plaintiffs cannot use unsupported legal conclusions to transform lawful responses to similar market pressures into a price-fixing conspiracy.”

Dive Insight:

A Michigan consumer sued the manufacturers in March for allegedly setting prices on residential and commercial systems in a coordinated fashion. 

Beginning in 2020, the lawsuit alleges, the manufacturers increased HVAC prices at a pace that exceeded by 8% what would otherwise have been justified based on some 20 variables such as the cost of copper, aluminum and labor. As part of the conspiracy, company executives signaled to one another their pricing intentions in public statements, remarks at industry meetings, articles published by an industry trade publication and through information sharing in an industry association app.

“Through a series of frequent and repeated secret meetings, information sharing, communications, and public signaling, Defendants drove the prices of HVAC Equipment to historic levels,” says the lawsuit. “Additionally, Defendants used two key organizations to facilitate their conspiracy.” The lawsuit named, but didn’t charge, the Air Conditioning, Heating, and Refrigeration Institute, or AHRI, and the publisher of ACHR News, a trade publication. 

The seven companies — Bosch, Carrier, Trane, Daikin, Lennox, Rheem and AAON — control about 90% of the U.S. residential and commercial HVAC market when their subsidiaries are included, according to the complaint. 

In asking the court to dismiss the lawsuit, the companies said the plaintiffs made no effort to distinguish the different types of products each company makes, whether they’re for residential or commercial markets, whether they’re sold to distributors or directly to dealers and contractors, the timing and context of the pricing decisions each has made since 2020, or why some public statements about pricing were made and what products those statements were referring to.

Any appearance of parallel conduct by the manufacturers is the result of company executives making individual decisions on pricing, including by looking at what their competitors are doing. 

“The Supreme Court [has] held that parallel conduct among competitors is ‘in line with a wide swath of rational and competitive business strategy unilaterally prompted by common perceptions of the market,’” say the companies, quoting from a 2007 U.S. Supreme Court decision in Bell Atlantic v. Twombly. 

Nor have the plaintiffs made any effort to understand the context in which individual pricing decisions were made or why some pricing strategies were publicly communicated, the companies say. 

In several cases, statements on pricing that executives made during earnings presentations were in response to questions posed by analysts rather than planned statements to signal market intentions. 

In one instance, the companies say, “Plaintiffs ignore that [Lennox’s CFO in a Feb. 2026 call] was [responding to] an analyst’s question about” inventory.

The plaintiffs’ analysis alleging HVAC prices rose higher than was warranted also doesn’t adequately account for the legal mandates they were under to retool their operations, the companies said. As a group, they spent billions of dollars to meet U.S. Department of Energy SEER2 efficiency standards and replace R-410A refrigerants with something that releases fewer greenhouse gasses under the American Innovation and Manufacturing, or AIM, Act. SEER2 refers to seasonal energy efficiency ratio energy conservation standards that DOE released in 2027. 

“The Complaints allege no facts explaining why household appliances (like toasters) are appropriate comparators for HVAC systems,” the companies say. “Nor do Plaintiffs allege facts that suggest the household appliance industry was subject to the AIM Act, new energy efficiency standards, and tariffs. Indeed, the AIM Act, which cost the industry ‘billions,’ primarily impacted HVAC manufacturers.”

The law firm leading the plaintiffs’ lawsuit, Hagens Berman Sobol Shapiro, didn’t immediately reply to a request for comment.

The HVAC manufacturers face a separate proposed class action lawsuit filed by the owner of an HVAC contracting company on the same grounds as the consumer lawsuit.