Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Japanese auto parts makers allegedly conspired to rig bids for heater control panels, (Apr 12, 2017)

By Jody Coultas, J.D.

Tiffin Motor Homes, Inc. has filed suit alleging that Alps Electric Co., Ltd., Alps Electric (North America), Inc., and Alps Automotive Inc. conspired to rig bids and to fix prices of heater control panels in violation of Section 1 of the Sherman Act (Tiffin Motor Homes, Inc. v. Alps Electric Co., Ltd., filed April 7, 2017).

Alps manufactures several types of automotive heater control panels (HCPs) for installation in motor vehicles manufactured or sold in the United States. HCPs are operational panels with buttons and switches that control the climate of the interior environment of the vehicle.

Tiffin Motor Homes, which purchased HCPs directly from Alps, alleged that Alps conspired with Sumitomo Electric Industries, Ltd., Denso Corporation, Denso International America, Inc., and Tokai Rika Co., Ltd. to rig bids for and allocate the supply of HCPs and fix prices for HCPs. Sumitomo and Denso have previously been involved in antitrust investigations with respect to other automotive parts, and have been fined for their participation in anticompetitive cartels. The alleged conspiracy lasted for ten years resulting in HCP purchasers paying higher prices for HCPs than they would have paid in a competitive market.

Tokai Rika Co. Ltd. agreed to plead guilty and to pay a $17.7 million criminal fine for its role in a conspiracy to fix prices of heater control panels (HCPs) installed in cars sold in the United States and elsewhere, the Department of Justice announced in 2012. Managers and executives of DENSO Corporation, plead guilty to conspiring to rig bids and fix prices for electronic control panels and heater control panels sold to Toyota in 2013 and 2014.

A class of individuals and entities that purchased vehicles containing auto parts subject to an alleged price fixing conspiracy obtained final approval of numerous settlements with nine companies and their affiliates, including Sumitomo, securing nearly $225 million in cash for the benefit of the class. In that case, Tiffin Motor Homes and plaintiff Fleetwood Enterprises, by its bankruptcy trustee, alleged that defendants Denso Corporation, Sumitomo Electric, and Tokai Rika engaged in a price-fixing conspiracy regarding HCPs.

Alps and their co-conspirators allegedly manipulated the Requests for Quotation process, agreed to submit bids that would allow the supplier who had the existing HCP business for a particular model to win the HCP business for the successor model, and coordinated their HCP pricing in violation of Section 1 of the Sherman Act. The complaint alleges that there are substantial barriers to entry in the market for HCPs because of significant start-up capital expenditures, and that the market for HCPs is highly concentrated. Also, pricing for HCPs is allegedly highly inelastic.

The complaint was filed in the federal district court in Detroit. Tiffin is seeking class certification, damages, injunctive relief, attorney fees and costs, pre- and post-judgment interest, and any other just and proper relief.

The case is No. 17-cv-11109.

Attorneys: David H. Fink, Darryl Bressack, and Nathan J. Fink (Fink + Associates Law) Interim Liaison Counsel for the Direct Purchaser Plaintiffs. Steven A. Kanner, William H. London, and Michael E. Moskovitz (Freed Kanner London & Millen LLC), Joseph C. Kohn, William E. Hoese, and Douglas A. Abrahams (Kohn, Swift & Graf, P.C.), Gregory P. Hansel, Randall B. Weill, and Michael S. Smith (Preti, Flaherty, Beliveau & Pachios LLP), Eugene A. Spector, William G. Caldes, Jonathan M. Jagher, and Jeffrey L. Spector (Spector Roseman Kodroff & Willis, P.C.) Interim Lead Counsel for the Direct Purchaser Plaintiffs. Brian Murray, Lee Albert, and Gregory Linkh (Glancy Binkow & Goldberg LLP), Melissa H. Maxman (Cohen & Gresser LLP), M. John Dominguez and Brent W. Johnson (Cohen Milstein Sellers & Toll PLLC) for Tiffin Motor Homes, Inc., SLTNTRST LLC, Trustee for Fleetwood Liquidating Trust, and the Proposed Class.

Companies: Tiffin Motor Homes, Inc.; SLTNTRST LLC, Trustee for Fleetwood Liquidating Trust; Alps Electric Co., Ltd.; Alps Electric (North America), Inc.; Alps Automotive Inc.

News: Antitrust MichiganNews