Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Wis.: Metal parts purchaser class certified in price fixing suit, (Jun 27, 2016)

By Greg Hammond, J.D.

A class of persons and entities that purchased aftermarket sheet metal parts directly from manufacturers has been certified by the federal district court in Milwaukee, in an action alleging that manufacturers conspired to fix prices, in violation of the Sherman Act. The court granted the purchasers’ motion for class certification, finding that they met the numerosity, adequacy of representation, typicality, and commonality requirements of Federal Rule of Civil Procedure 23(a) and predominance and superiority requirements of Rule 23(b) (Fond du Lac Bumper Exchange, Inc. v. Jui Li Enterprise Co., Ltd., June 24, 2016, Adelman, L.).

Direct purchasers of aftermarket sheet metal parts—such as hoods, doors, fenders, and bonnets—claim that various manufacturers conspired to fix, raise, maintain, and stabilize the prices of those parts in violation of the Sherman Act. The named direct purchaser plaintiffs—Fond du Lac Bumper Exchange Inc. and Roberts Wholesale Body Parts Inc.—sought class certification against the remaining defendant manufacturers—Auto Parts Industrial Ltd. and Cornerstone Auto Parts LLC.

The court quickly determined that the numerosity requirement of Federal Rule of Civil Procedure 23(a) was met, because the approximate 468 member-class was sufficient to render joinder of all class members impracticable.

Typicality, adequacy. The typicality requirement was satisfied, according to the court, because the claims arose out of the defendant manufacturers’ alleged conspiracy to fix prices, and the class representatives rely on the same legal theory—that the defendant manufacturers violated the Sherman Act by conspiring to artificially raise, fix, maintain, and stabilize prices causing them to overpay for aftermarket sheet metal. Fond du Lac Bumper and Roberts also satisfied the adequacy of representation requirements because the court found them qualified and capable of fully pursuing the common goals of the class without collusion or conflicts of interests.

Commonality, predominance. Next, the court determined that the plaintiffs demonstrated that all three elements of their antitrust claim—conspiracy, impact, and damages—were amenable to common proof and were therefore questions common to the class. The plaintiffs presented documents that they argued indicated common conspiratorial conduct, which was sufficient to demonstrate the existence of a conspiracy among the defendants to restrain trade, according to the court.

The plaintiffs also satisfied their burden of showing that impact could be proven on a class-wide basis, the court determined. In particular, the plaintiffs’ expert performed a multiple regression analysis to determine that anticompetitive conduct would have affected prices generally. The expert factored out all variables that might have affected price except the anticompetitive conduct and compared the actual price paid with the price customers would otherwise have paid. He was subsequently able to determine that anticompetitive conduct would have artificially raised prices. The expert also examined whether such conduct would have had a common impact by examining common evidence and market characteristics and concluding that a pricing structure existed, which included a reference pricing system that affected all aftermarket parts and individual negotiations. He then concluded that all or nearly all class members would have overpaid as a result of the manufacturers’ alleged anticompetitive conduct. The court found that the expert’s analysis was reasonable and could demonstrate class-wide impact.

The expert’s regression analysis served as a sufficiently reliable method for establishing that damages could be proven on a class-wide basis, the court determined. His regression analysis was commonly accepted as a way of estimating damages in antitrust cases and his methodology appeared to be sound in that he accounted for numerous factors other than anticompetitive conduct in an attempt to isolate the effects of the alleged anticompetitive conduct.

Because liability, impact, and damages could be proven on a class-wide basis, the court concluded that common questions predominate.

Superiority. Finally, the court concluded that a class action would be superior to other methods of adjudicating the controversy because there were hundreds of class members and the nature of the case would make it difficult for them to proceed on their own. Specifically, the court noted that the defendants were Taiwanese companies and the costs of litigating against them would be preclusive.

The case is No. 09-cv-00852-LA.

Attorneys: Andrew M. Purdy (Joseph Saveri Law Firm) and Benjamin D. Brown (Cohen Milstein Hausfeld & Toll) for Fond du Lac Bumper Exchange Inc. Christopher M. Burke (Scott + Scott LLP) and Jason S. Hartley (Stueve Siegel Hanson LLP) for Roberts Wholesale Body Parts Inc. Alfredo A. Bismonte (Beck Bismonte & Finley LLP) for Jui Li Enterprise Co. Ltd. Cindy D. Hinkle (Buchanan Ingersoll & Rooney PC) for Auto Parts Industrial Ltd. and Cornerstone Auto Parts LLC.

Companies: Fond du Lac Bumper Exchange Inc.; Roberts Wholesale Body Parts Inc.; Jui Li Enterprise Co. Ltd.; Auto Parts Industrial Ltd.; Cornerstone Auto Parts LLC

Cases: Antitrust WisconsinNews