Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Alleged price fixing, bid rigging ignites spark plug class action, (May 19, 2015)

By Greg Hammond, J.D.

Following guilty pleas and settlements with the U.S. Department of Justice, various spark plug manufacturers have been named in a class action suit brought on behalf of direct purchasers, for an alleged conspiracy to rig bids and fix prices of spark plugs sold in the United States and elsewhere at supracompetitive prices. The complaint was brought in the U.S. District Court for the Eastern District of Michigan (WAL, Inc. v. NGK Spark Plug Co., Ltd., May 18, 2015).

WAL, Inc., doing business as Tri-State Automotive Warehouse, filed the class action against spark plug manufacturers NGK Spark Plug Co., Ltd., Robert Bosch GmbH, and Denso Corp., alleging that the three manufacturers previously pleaded guilty to U.S. Justice Department criminal informations, charging that the manufacturers engaged in a conspiracy to rig bids for and to fix the prices of spark plugs in violation of the Sherman Act. NGK, Robert Bosch, and Denso each agreed to pay criminal fines of $52.1 million, $57.8 million, and $78 million, respectively. WAL filed suit on behalf of itself and all direct purchasers of Spark Plugs in the United States from any of the defendants, or their controlled subsidiaries, affiliates, or joint ventures, between January 1, 2000, and the present.

Specifically, the complaint asserts that from at least January 2000, the defendants entered into a continuing conspiracy to rig bids and fix, raise, maintain, or stabilize prices of spark plugs sold in the United States and elsewhere at supra-competitive levels. This was achieved by participation in meetings, conversations, and communications in the United States and abroad to discuss bids and price quotations for spark plugs sold in the United States. The defendants allegedly agreed to allocate the supply of spark plugs, as well as on bids and price quotations and adjustments for spark plugs. Further, the defendants purportedly manipulated the Request for Quotes process, coordinated pricing, and attempted to conceal their unlawful conduct.

As a result of the alleged bid rigging and price fixing conspiracy, the plaintiffs claim that price competition was restrained, suppressed, or eliminated with regard to spark plugs; the prices of spark plugs were raised, fixed, maintained, or stabilized at supracompetitive levels; and purchasers of spark plugs have been deprived of free and open competition in the spark plugs market. They also alleged that the characteristics of the spark plugs market are conducive to collusion due to high barriers to entry, price inelasticity, and opportunities for collusion.

Plaintiffs seek a determination that the law suit proceed as a class action; a declaration that the alleged conspiracy be adjudicated and decreed a per se violation of the Sherman Act; damages and trebled damages; a permanent injunction restraining the defendants from continuing and maintaining the alleged combination, conspiracy, or agreement; costs of suit, including attorney fees; and pre- and post-judgment interest.

Attorneys: David H. Fink (Fink + Associates Law), Joseph C. Kohn (Kohn, Swift & Graf, P.C.), Gregory P. Hansel (Preti, Flaherty, Beliveau & Pachios LLP), Steven A. Kanner (Freed Kanner London & Millen LLC), Eugene A. Spector (Spector Roseman Kodroff & Willis, P.C.), Linda P. Nussbaum (Nussbaum Law Group, P.C.), Irwin B. Levin (Cohen & Malad, LLP), Warren Rubin (Law Offices Bernard M. Gross, P.C.), and Carl E. Person for WAL, Inc.

Companies: WAL, Inc.; NGK Spark Plug Co., Ltd.; Denso Corp.; Robert Bosch GmbH

News: Antitrust MichiganNews