Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Mich.: Bearings manufacturers unable to shake Florida state law claims, (Apr 24, 2015)

By Greg Hammond, J.D.

The Florida Attorney General’s office stated sufficient antitrust and consumer protection claims under Florida law against manufacturers of automobile bearings. Concluding that the allegations were sufficient to withstand a request for dismissal on due process grounds and that adequate facts were alleged to raise fraudulent concealment grounds for tolling the statute of limitations, the federal district court in Detroit denied the manufacturers’ motion to dismiss the Florida state claims (In re Automotive Parts Antitrust Litigation, April 22, 2015, Battani, M.).

Background. In May 2014, the Office of the Attorney General of Florida filed a class action against bearings manufacturers, including JTEKT Corp., JTEKT North America Corp., NTN Corp., NTN USA Corp., NSK Ltd., NSK Americas, Inc., Schaeffler AG, Schaeffler Group USA Inc., AB SKF, and SKF USA, Inc. The action alleged that the manufacturers conspired to fix prices and allocate the market for automotive bearings from January 2000 to the present. Florida brought claims under federal and state law as well as state law consumer protection claims. The defendants moved to dismiss on due process and statute of limitations grounds.

Due process. First, the defendants argued a lack of contacts between the alleged conspiratorial conduct and Florida, undermining the application of Florida law to indirect purchases by Florida consumers and businesses. The court rejected this argument, finding that (1) the anticompetitive conduct attributed to the defendants in Florida was related to the plaintiffs’ alleged injuries; (2) the conduct was neither “slight” nor “casual”; and (3) the conduct fell within the U.S. Supreme Court’s Allstate “permissive standard” because the allegations demonstrated a “significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.”

Specifically, the fact that there are many vehicles in Florida demonstrated significant contacts with the occurrence or transaction giving rise to the litigation. In addition, the business conducted in Florida played more than a de minimis role in the conspiratorial activity, supporting Florida’s allegations that the defendants’ and co-conspirators’ unlawful activities took place within the flow of and substantially affected interstate trade and commerce, as well as trade and commerce within Florida. These allegations, according to the court, were sufficient to withstand a request for dismissal on due process grounds.

Tolling. The defendants next argued that Florida could not bring its claim under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) under statute of limitations grounds, since fraudulent concealment is not specifically provided for in Florida’s tolling statute and the statute precludes application of any tolling provision not specifically provided therein.

The court rejected this argument, finding that Florida courts have employed fraudulent concealment as an equitable basis for tolling a statute of limitations. Specifically, Florida courts apply the doctrine of fraudulent concealment in cases where “one, by word, act or conduct, willfully caused another to believe in the existence of a certain state of things, and thereby induces him to act on his belief injuriously to himself, or to alter his own previous condition to his injury.” The court concluded that the Florida Attorney General’s office pleaded sufficient fact to state a claim under Florida court’s interpretation of equitable estoppel. Because Florida alleged that the manufacturers took steps to conceal their wrongful actions—including using code names and meeting in secret locations to avoid detection while publicly representing their acts resulted from a competitive process—there was no basis for dismissing the FDUTPA claim.

The case number is 12-md 02311.

Attorneys: Robert Scott Palmer, Attorney General of Florida, for State of Florida. Alison R. Welcher (Sherman & Sterling LLP) for JTEKT Corp. Brian M. Moore (Dykema Gossett (Detroit)) for SKF USA Inc. and AB SKF. Eric J. Mahr (Wilmer Cutler Pickering Hale and Dorr LLP) for Schaeffler AG and Schaeffler Group USA, Inc. David A. Ettinger (Honigman, Miller, Schwartz and Cohn LLP) for NSK, Ltd. Teale Toweill (Cleary Gottlieb Steen and Hamilton LLP) for NSK Americas, Inc. A. Paul Victor (Winston & Strawn LLP) for NTN Corp. and NTN USA Corp. Alison R. Welcher (Sherman & Sterling LLP) for JTEKT Automotive North America, Inc.

Companies: JTEKT Corp.; SKF USA Inc.; AB SKF; Schaeffler AG; Schaeffler Group USA, Inc.; NSK, Ltd.; NSK Americas, Inc.; NTN Corp.; NTN USA Corp.; JTEKT Automotive North America, Inc.

Cases: Antitrust MichiganNews