Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Mich.: Auto parts supplier not entitled to dismissal of Ford’s wire harness price fixing claims, (Mar 5, 2014)

By Jeffrey May, J.D.

The federal district court in Detroit has refused to dismiss an action brought by Ford Motor Company against auto parts suppliers for conspiring to fix prices of automotive wire harness systems based on defendant Fujikura Ltd.’s contention that Ford’s allegations amounted to inadequate “me too” antitrust claims that followed Fujikura ‘s guilty plea in a U.S. antitrust probe. Ford brought a plausible antitrust claim-one that included allegations beyond parallel conduct and naked assertions of conspiracy—the court noted (In re Automotive Parts Antitrust Litigation (Wire Harness Cases), March 4, 2014, Battani, M.).

In its motion to dismiss, Fujikura asserted that Ford could not base its claims on Fujikura’s guilty plea to U.S. charges that it conspired to rig bids and fix prices for wire harnesses. Fujikura noted that the federal charges related to another automobile manufacturer—Subaru. Fujikura also pointed out that other guilty pleas in the U.S. government’s wire harness cases did not mention Ford. Other discrepancies between the plea and Ford’s complaint also supported dismissal, according to Fujikura.

Despite the differences between Fujikura’ plea and Ford’s complaint, as well as the lack of an explicit connection to Ford with respect to other wire harness guilty pleas, the court concluded that Ford’s allegations were adequate, since they were not confined by the admissions. In addition to the guilty pleas, the court found support for the allegations in the government investigations, the bidding behavior, the structure and characteristics of the wire harness market, and the defendants’ opportunities to collude.

While more details could have been alleged, such as the identities of the other bidders, the amounts of their bids, or which supplier Ford ultimately selected, such details were not required at this stage, the court noted. Moreover, Ford did not merely reiterate the allegations made by the direct purchaser plaintiffs in the putative class action wire harness case, as Fujikura had suggested.

Purchasing relationship

Even though Ford did not purchase wire harnesses from Fujikura or its U.S. subsidiary, Fujikura Automotive America LLC, the court found that the allegations permitted an inference that the conduct of the Fujikura defendants impacted the prices paid by Ford. Given the nature of the conspiracy alleged by Ford, it was not necessary for the Fujikura defendants to have supplied Ford directly, in the court’s view. The Fujikura defendants themselves “participated in the benefits resulting from the” increased prices paid by Ford, it was noted.

The court also ruled that it would be premature to reject the claim based on the Fujikura defendants’ justifications for not participating in the competitive bidding process. The Fujikura defendants’ alternative explanation did not undermine the plausibility of the conspiracy. Ford did not have to rule out all possible innocent explanations, the court explained.

Discovery

Also denied was Fujikura’s request to limit discovery to bidding involving a wire harnesses for a single platform used in certain Ford vehicles. The Fujikura defendants contended that, because Ford only mentioned contact with Fujikura Automotive America in connection with Ford’s CD4 platform, discovery should be limited to bidding involving only that platform for which Ford sought bids in 2009. The court declined to do so, however, because Ford did not limit the Fujikura defendants’ conduct to the CD4 platform.

The case is 2:13-cv-13055-MOB-MKM (Master File No. 12-md-02311).

Attorneys: Cindy C. Kelly (Kasowitz, Benson, Torres & Friedman LLP) for Ford Motor Co. Fred K. Herrmann (Kerr Russell) for Fujikura Ltd. and Fujikura Automotive America LLC.

Companies: Ford Motor Co.; Fujikura Ltd.; Fujikura Automotive America LLC

Cases: Antitrust MichiganNews