Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Automobile dealers allege price fixing conspiracy among foreign auto parts manufacturers, (Dec 15, 2014)

By Linda O’Brien, J.D., LL.M.

Automobile dealers from several states have filed two complaints against foreign manufacturers of automotive parts and their domestic subsidiaries for allegedly engaging in a conspiracy with other manufacturers to fix the prices of automotive parts, specifically vehicle inverters and constant-velocity-joint boot products. Both complaints were filed in the federal district court of Detroit on December 12 (Martens Cars of Washington, Inc. v. Hitachi Automotive Systems, Ltd., Case 2:14cv14721; Martens Cars of Washington, Inc. v. Toyo Tire & Rubber Co., Ltd., Case 2:14cv14719).

Martens Cars of Washington and 44 other automobiles dealers purchased vehicles containing inverters and constant-velocity-joint boot products as component parts or indirectly purchased inverters and constant-velocity-joint boot products as replacement parts, which were manufactured or sold by Hitachi or Toyo among others. Inverters provide power to motors by converting direct current electricity from a vehicle’s battery to alternating current electricity. Automotive constant-velocity-joint boot products are composed of rubber or plastic, and are used to cover vehicle constant-velocity-joints to protect against contaminants

According to the complaints, competition authorities in the United States, Europe, and Japan began investigations into a conspiracy among suppliers of automotive parts. The ongoing investigation of price fixing and bid rigging in the automobile parts industry has yielded approximately $1.8 billion in criminal fines. In September 2013, the U.S. Department of Justice Antitrust Division announced that Hitachi agreed to pay a $195 million criminal fine and plead guilty to a one-count criminal information charging it with participating in a conspiracy to fix prices of automotive parts, including inverters. In November 2013, the Justice Department announced that Toyo agreed to plead guilty and pay a $120 million criminal fine for its role in a conspiracy to fix prices of automotive constant-velocity-joint boot products, and another automotive part, installed in automobiles sold in the United States.

The defendants’ price fixing conspiracy has artificially inflated prices for businesses that directly purchased inverters and constant-velocity-joint boot products from them and in those purchasers that raised their prices to subsequent purchasers. Having paid higher prices for components of the cars they sold the plaintiff dealers, those direct purchasers passed the overcharges on to the plaintiffs, the complaints charge.

The plaintiffs assert claims for unfair competition, unjust enrichment, and violations of section 1 of the Sherman Act. The action seeks declaratory and injunctive relief, restitution, treble damages, pre- and post-judgment interest, costs of suit, attorneys’ fees, and any other just and proper relief.

The cases are Nos. 2:14-cv-14721 and 2:14-cv-14719.

Attorneys: Gerard V. Mantese (Mantese Honigman Rossman and Williamson, P.C.), Don Barrett (Barrett Law Group, P.A.), Shawn M. Raiter (Larson King, LLP), Phillip Duncan (Duncan Firm, P.A.), Dewitt Lovelace (Lovelace & Associates, P.A.), Jonathan W. Cuneo (Cuneo Gilbert & LaDuca, LLP), Thomas P. Thrash (Thrash Law Firm, P.A.), Charles Barrett (Charles Barrett, P.C.), and Gregory Johnson (G. Johnson Law, PLLC) for the dealership plaintiffs.

Companies: Martens Cars of Washington, Inc.; Hitachi Automotive Systems, Ltd.; Hitachi Automotive Systems Americas, Inc.; Toyo Tire & Rubber Co., Ltd.; Toyo Automotive Parts, Inc.

News: Antitrust MichiganNews