Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Wis.: Timeliness of sheet metal product price fixing claims is fact question, (Jan 13, 2015)

By Jeffrey May, J.D.

Foreign manufacturers of aftermarket sheet metal products were not entitled to dismissal of indirect purchasers’ state antitrust law claims on statute of limitations grounds, the federal district court in Milwaukee has ruled. Fireman’s Fund Insurance Company and other indirect purchasers of the products, including sheet metal automotive parts, plausibly alleged several grounds on which the limitation periods should be tolled. The defendants’ motion to dismiss state law claims seeking damages from an alleged price fixing conspiracy was therefore denied (Fond Du Lac Bumper Exchange, Inc. v. Jui Li Enterprise Co., Ltd., January 12, 2015, Adelman, L.).

The plaintiffs could proceed with fact discovery to support their assertions that the limitation periods should be tolled under the continuing violation doctrine with respect to claims brought under Arizona, Arkansas, North Carolina, and Tennessee law. In their complaint, initially filed on August 30, 2013, the plaintiffs alleged that, from 2003 to the present, the defendants engaged in price fixing and that they indirectly purchased aftermarket sheet metal from the defendants from 2003 through the present. Thus, the plaintiffs alleged ongoing sales inflicting new injuries occurring within the limitation periods, according to the court.

The plaintiffs’ Arizona, Massachusetts, and Tennessee claims also could be tolled by the discovery rule, which holds that a statute of limitations does not begin to accrue until the plaintiff knew or should have known about its injury, in the court's view. The defendants argued that the plaintiff was on constructive notice and therefore should have discovered its injury when the direct purchaser plaintiffs filed their related complaint in the case in 2009. The court noted, however, that whether plaintiff should have reasonably discovered its injury is a fact issue not amenable to resolution at the motion to dismiss stage. The filing of the direct purchaser plaintiffs' complaint in 2009 also did not put the plaintiffs on constructive notice such that the doctrine of fraudulent concealment could only toll the claims under Arizona, Arkansas, Massachusetts, North Carolina, and Tennessee law until 2009.

In addition, the court ruled that the plaintiffs’ Kansas unjust enrichment and restraint of trade claims were adequately alleged to be within the relevant three-year limitation period. The plaintiffs’ Kansas law claims accrued when a purchase was made, and the plaintiffs alleged that their purchases occurred “from August 30, 2010 through the present.”

New York Donnelly Act claim. The indirect purchasers' New York Donnelly Act claim for treble damages also survived the defendants' motion to dismiss. New York’s Civil Practice Law and Rules prohibit a plaintiff from maintaining a class action to recover a penalty. The defendants contended that the Donnelly Act claim had to be dismissed because the plaintiffs were pursuing a class action and the Donnelly Act’s treble damages provision was a penalty. The federal district court explained that in a diversity action, it applied state substantive law and federal procedural law. Further, Federal Rule of Civil Procedure 23 was procedural in nature and was in direct conflict with the state rule. Thus, Rule 23 controlled, and the state restriction on class actions was inapplicable.

The case is No. 09C0852.

Attorneys: Kevin P Caraher (Cozen O'Connor) for Fireman's Fund Insurance Co. Andrew M. Purdy (Joseph Saveri Law Firm) for Fond du Lac Bumper Exchange Inc. J. Ric Gass (Gass Weber Mullins LLC) for Jui Li Enterprise Co., Ltd.

Companies: Fond du Lac Bumper Exchange Inc.; Fireman’s Fund Insurance Co.; Jui Li Enterprise Co., Ltd.

Cases: Antitrust WisconsinNews