Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Mich.: Auto parts supplier escapes price fixing claims, manufacturers not so lucky, (Mar 2, 2015)

By Greg Hammond, J.D.

A Japanese automotive lamp supplier did not have sufficient minimum contacts in the United States for the federal district court in Detroit to exercise personal jurisdiction, in a case where the supplier was alleged to have engaged in a conspiracy to fix prices and rig bids for HID Ballasts. The court therefore granted the automotive lamp supplier’s motion to dismiss. However, in a separate order, the court denied other defendants’ joint motion to dismiss claims they conspired to fix prices and rig bids for motor generators (In re Automotive Parts Antitrust Litigation (HID Ballasts), February 26, 2015, Battani, M.) and (In re Automotive Parts Antitrust Litigation (Motor Generators), February 26, 2015, Battani, M.).

Background. Auto dealership plaintiffs and end-payor plaintiffs filed separate consolidated class action complaints, alleging that various defendants engaged in a long-running conspiracy to unlawfully fix prices, rig bids for, and allocate the market and customers in the United States for—in part—HID Ballasts and motor generators. HID Ballasts are electrical devices that limit the amount of electrical current flowing to an HID headlamp. Ichikoh Industries, Ltd., a Japanese automotive lamp supplier, moved to dismiss the HID Ballasts claims, arguing that the court lacked personal jurisdiction. In a separate motion to dismiss, motor generator manufacturers DENSO Corp. and Hitachi Automotive Systems, Ltd. asserted that the dealership and end-payor plaintiffs failed to allege a plausible conspiracy lasting 14 years.

HID Ballasts. The dealership and end-payor plaintiffs alleged that Ichikoh, directly or through its subsidiaries, manufactured and/or sold HID Ballasts that were purchased throughout the United States. The dealerships further alleged that Ichikoh sold HID Ballasts to firms that later sold those products to plaintiffs and/or class members.

The court granted Ichikoh’s motion to dismiss, finding that it lacked personal jurisdiction over the Japanese company. Specifically, Ichikoh lacked sufficient minimum contacts to establish personal jurisdiction, because Ichikoh does not manufacture or directly sell products in the United States, does not have any physical contacts with the United States, and has never been charged with or pleaded guilty to any criminal conduct in the United States. Because minimum contacts could not be established, the court rejected the plaintiffs’ argument that Ichikoh purposefully availed itself of the privilege of conducting business in the United States by engaging in a conspiracy to fix the price of HID Ballasts. Further, because the plaintiffs failed to rebut that Ichikoh does not control the sales decisions of its customers, or that it does not actually manufacture or sell any products, the plaintiff’s stream of commerce argument failed.

Motor generators. In a separate order, the court denied DENSO’s and Hitachi’s motion to dismiss allegations that they engaged in a conspiracy to fix the prices of motor generators from January 2000 through the present. Instead, the court determined that the plaintiffs’ complaints alleged an overarching conspiracy to rig bids and fix the prices of motor generators. Specifically, the court noted that both Hitachi and DENSO previously pleaded guilty to criminal antitrust violations involving other component parts, and that the defendants cited no authority to support an argument that dismissal of a civil complaint is required when the complaint expanded beyond the conduct to which the defendants pleaded guilty in an antitrust criminal case. Rather, the existence of the guilty pleas demonstrated that the motor generators conspiracy existed, and the allegation that the defendants conspired for 14 years was not implausible.

The case number is 12-md-02311.

Attorneys: Marguerite M. Sullivan (Latham & Watkins LLP) for Ichikoh Industries, Ltd. Brian C. Smith (Wilmer Cutler Pickering Hale and Door LLP) for DENSO Corp. and DENSO International America, Inc. Alden Lewis Atkins (Vinson & Elkins LLP) for Hitachi Automotive Systems, Ltd. and Hitachi Automotive Systems Americas, Inc.

Companies: Ichikoh Industries, Ltd.; DENSO Corp.; DENSO International America, Inc.; Hitachi Automotive Systems, Ltd.; Hitachi Automotive Systems Americas, Inc.

Cases: Antitrust MichiganNews