Parties Settle Lawsuit Over Cylinder Exchange Program
RADNOR, PA and WINCHESTER, KY - January 26, 2009 - Airgas, Inc. (NYSE: ARG) and Scott-Gross Company, Inc. today jointly announced the settlement of a lawsuit relating to a cylinder exchange program operated by Thoroughbred Industrial Cylinder Exchange, LLC ("Thoroughbred"), a wholly-owned subsidiary of Scott-Gross Co. Inc. All parties have agreed to dismiss their various claims and counterclaims without any admission of wrongdoing by any party and without certification of the plaintiffs' claims as a class action.
The lawsuit was filed in October 2005 on behalf of Airgas Mid-America, Inc., one of the regional companies that make up Airgas' distribution business, and Commonwealth Supply Company of York, PA seeking to represent a nationwide class of independent distributors. The lawsuit alleged that the Thoroughbred program accepted for exchange large industrial welding gas cylinders owned by Airgas regional companies, Commonwealth Supply Co. and other distributors. The lawsuit named as defendants Scott-Gross, Thoroughbred and two Thoroughbred customers.
The parties have agreed that Thoroughbred will no longer accept for exchange non-Thoroughbred high pressure compressed gas cylinders with a capacity in excess of 200 cubic feet. Thoroughbred will alter its customer training materials, marketing materials, signage and website within 90 days to reflect that the program no longer accepts non-Thoroughbred high pressure cylinders with a capacity in excess of 200 cubic feet.
Thoroughbred has also agreed to return high pressure cylinders (with a capacity in excess of 200 cubic feet) and large acetylene cylinders (with a capacity of between 100 and 160 cubic feet) owned by Airgas regional companies or Commonwealth Supply Co. that are currently in the Thoroughbred inventory or that may come into Thoroughbred's possession in the future.
The settlement allows Thoroughbred to continue to exchange any Thoroughbred cylinders previously sold to its customers.
As part of the settlement, Scott-Gross Co. Inc. and Thoroughbred will dismiss their counterclaims against Airgas and Airgas Mid-America alleging violation of Kentucky's Uniform Trade Secrets Act, defamation and intentional interference with a contractual relationship.
Both Airgas and Thoroughbred have agreed to enhance their customer training materials and marketing materials to include language similar to that now included in the Thoroughbred Ownership Acknowledgment and Cautionary Notice found at www.gaspony.com.
All parties further agreed to continue to work with the Gases and Welding Distributors Association (GAWDA) to further refine industry standards regarding appropriate practices for verifying cylinder ownership, including continued participation in the ongoing GAWDA Cylinder Exchange Task Force relating to these issues.
"The settlement demonstrates our continued efforts to balance the ownership rights of the distributor and the consumer who legitimately owns compressed gas cylinders," said Philip Scott, CEO of Scott-Gross Co. Inc. "We are happy that the parties to this settlement could reach an agreement that respects the interests of our industry and the consumer."
"Cylinder ownership is an important issue in industrial gas distribution," said Michael L. Molinini, executive vice president and chief operating officer of Airgas, Inc. "We are pleased that all parties are finding common ground to protect the distributor's ownership rights and to ensure that the customer knows who owns and maintains the cylinders in their possession."
About Airgas, Inc.
Airgas, Inc. (NYSE:ARG), through its subsidiaries, is the largest U.S. distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies. Airgas is also one of the largest U.S. distributors of safety products, the largest U.S. producer of nitrous oxide and dry ice, the largest liquid carbon dioxide producer in the Southeast, and a leading distributor of process chemicals, refrigerants, and ammonia products. More the 14,000 employees work in over 1,100 locations, including branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness, catalog and telesales channels. Its national scale and strong local presence offer a competitive edge to its diversified customer base. For more information, please visit www.airgas.com.
About Scott-Gross Company, Inc.
Scott-Gross Company Inc.® was founded in 1949. It is a family-owned company based in Winchester, Kentucky that operates twenty-nine (29) retail locations in eight (8) states. Scott-Gross also operates six (6) cylinder fill plants, a bulk products distribution division, and a Purity Plus® specialty gas production lab. Thoroughbred Industrial Cylinder Exchange, LLC® operates the only nationwide customer-owned cylinder purchase and exchange program with over 1500 propane and welding gas retail locations. More information may be found at www.scottgross.com.
For Airgas and other Plaintiffs:
Media & Investor Contact:
Jay Worley
(610) 902-6206
jay.worley@airgas.com
For Scott-Gross and Thoroughbred:
Media Contact:
Charles Beal
(859) 737-8103
cbeal@scottgross.com
Airgas, Inc.
259 North Radnor-Chester Road Suite 100
Radnor, PA 19087-5283
