Praxair services consist of providing industrial gases to business, and the company is believed to be adding deceptive fees unrelated to product costs. Such allegations have been leveled at one of the company’s subsidiaries; a class action filed in Florida last April claims that the subsidiary, NuCO2 LLC, has been engaging unfair or hidden fees and may be violating the terms of their contracts with clients.

What Products Does Praxair Provide?

Praxair services include the delivery of nearly 60 different industrial gases, the most common of which are acetylene, argon, CO2 (including dry ice), helium, hydrogen, krypton, neon, nitrogen, oxygen and xenon. Its client industries include those in aerospace, automotive, electronics, energy, metal production and fabrication, healthcare and pharmaceuticals and food and beverage. Praxair is a global corporation with operations in 50 countries.

Praxair, which has over 50 subsidiaries, recently entered into a merger with U.K.-based Linde Group, creating the largest supplier of industrial gases in the world.

What are the Allegations?

Some client businesses have reason to believe they are being charged extra fees by Praxair – usually referred to as “fuel surcharges,” “delivery fees” or “transportation charges” – that have nothing to do with Praxair’s delivery costs, but rather are a way of padding the bill. The defendant is also suspected of locking its clients into contracts, then raising their prices without reason or justification.

What is the Basis of These Allegations?

The current class action against Praxair subsidiary NuCO2 claims that the defendant locked plaintiffs Townhouse Restaurant and Estero Bay Hotel into six-year delivery contracts, then proceeded to charge more for its products than had been agreed to, employing a “systematic, deceptive scheme.” According to the complaint, NuCO2 raised its prices by as much as 30 percent every month over the contract period, without providing notice to the plaintiffs.

The lawsuit further claims that the defendant assesses fraudulent fuel charges that have “absolutely no relation” to NuCO2’s actual fuel costs, but serve only to increase profit margins.

If these allegations are true, they would constitute a violation of NuCO2’s own contracts, which limits the company to a 5 percent price increase per year, or requires that customers receive a “Price Adjustment Notification” at least 15 days prior to such an increase. Plaintiffs allege that NuCO2 does neither of these things, and that said price increases are automatic.

Have Other Providers of Praxair Services Been Doing This?

In 1996, another Praxair unit, CBI Industries, also found itself defending itself in a class action lawsuit filed by businesses who claimed the company had been utilizing unfair pricing schemes over a 24-year period. Ultimately, CBI settled the allegations for $23 million.

In 2011, Praxair subsidiary Sermatech International was targeted in a whistleblower lawsuit over alleged workplace safety violations resulting from cost-cutting measures. That case was settled in April of the following year.

It should be noted that both of these lawsuits were filed before Praxair acquired the defendant companies; however, when one company takes over another, the former acquires the latter’s liabilities as well as assets, even if it was not directly involved in any alleged wrongdoing.

This article is not legal advice. It is presented
for informational purposes only.