Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Mich.: Price-fixing, conspiracy claims proceed against automotive bearing maker, (Aug 28, 2014)

By Greg Hammond, J.D.

SKF USA Inc., a manufacturer of automotive bearings that participated in the automotive bearings market, could not obtain dismissal of dealerships’ and end-payor plaintiffs’ claims that the company engaged in an antitrust conspiracy to increase prices. In denying the manufacturer’s motion to dismiss, the federal district court in Detroit determined that SKF USA was sufficiently identified in the complaints, and it was unnecessary to delineate the role each subsidiary played in the alleged conspiracy (In re: Automotive Parts Antitrust Litigation (Bearings), August 27, 2014, Battani, M.).

Background. Separate class action complaints were filed by indirect purchaser plaintiffs (IPPs)—including automobile dealerships and end-payors—against various bearings manufacturers and sellers. The IPPs alleged that: SKF USA manufactured and participated in the automotive bearings market; the market was conducive to antitrust conspiracy; the existence of a conspiracy is supported by anticompetitive price increases during the relevant class period; and the U.S. Department of Justice, as well as the European and Korean authorities, are actively investigating SKF USA and its parent company with regard to a joint automotive bearings enterprise. SKF USA moved to dismiss the IPPs’ complaints, arguing that the IPPs failed to allege specific allegations against the company, and the end-payors failed to name SKF USA individually in any counts of their complaint.

Sufficiency of allegations. In support of its motion to dismiss, SKF USA first argued that the IPPs failed to meet pleading standards, as there were no allegations regarding the company’s involvement in the supposed conspiracy. The court disagreed, noting that it is not necessary for the IPPs to “delineate in the complaint the role each subsidiary played in the conspiracy.” Rather, by alleging SKF USA joined the conspiracy and played a role in it, the IPPs met their burden, and were not required to specify which defendants made what overt acts. The court further stated that its decision is consistent with its previous holding in In re Automotive Parts Antitrust Litig. (2013-1 Trade Cases ¶78,415). In addition, the court took judicial notice of SKF USA’s criminal plea agreements filed by the U.S. Department of Justice.

Omissions. SKF USA also argued that the end-payors’ complaint should be dismissed, because it did not name the company in any of their four claims for relief. The court, once again, found the company’s argument unpersuasive, as SKF USA was defined as a defendant, and the complaint jointly referred to SKF USA and its parent company, AB SKF. Consequently, SKF USA’s “narrow reading” of the end-payors’ complaint was rejected, and its motion to dismiss was denied.

The case number is 12-MD-02311.

Attorneys: Brian M. Moore (Dykema Gossett) for AB SKF.

Companies: SKF USA Inc.; AB SKF

Cases: Antitrust MichiganNews