Antitrust Law Daily Wrap Up, TOP STORY—E.D. Mich.: U.S. subsidiary of Japanese bearings firm faces price fixing claims, (Jul 25, 2014)

By Greg Hammond, J.D.

NSK Americas, Inc. (NSK USA), a wholly owned subsidiary of Japan-based NSK Ltd. (NSK), was unable to evade claims that it engaged in a conspiracy to fix prices of bearings sold in the United States. In denying NSK USA’s motion to dismiss, the federal district court in Detroit determined that (1) the allegations supported an inference that NSK USA participated in a price fixing conspiracy and (2) the company was sufficiently identified in the four claims for relief (In re Automotive Parts Antitrust Litigation, July 23, 2014, Battani, M.).

Background. Direct purchasers, automobile dealerships, and end-payors alleged that NSK USA acted under NSK’s direction when it sold price-fixed bearings in the United States; the two companies shared executives and employees; NSK has been under investigation in several countries for anticompetitive behavior and paid substantial fines in Japan; and the Department of Justice issued a subpoena to NSK over another subsidiary’s sales of bearings. NSK USA moved to dismiss the complaints, arguing that: (1) the plaintiffs alleged wrongdoing against NSK, not NSK USA, and (2) the complaint failed to specifically name NSK USA in any of the counts.

Alter-ego liability. The subsidiary’s first argument was unpersuasive, since the various plaintiffs were not required to explicitly allege NSK USA’s role in the conspiracy. The court found that the allegations supported an inference that NSK USA participated in the price-fixing conspiracy under the direction of its parent company. Because NSK pleaded guilty to claims it was involved in a bearings price fixing conspiracy, it was plausible that NSK USA knowingly sold price-fixed bearings in the United States market, according to the court. Consequently, the plaintiffs met their pleading burden.

NSK USA named in complaint. NSK USA also argued that it was not named in the end-payors’ complaint, which alleged only that “Defendants JTEKT Corporation, Nachi-Fujikoshi Corp., NSK Ltd., Schaeffler AG, AB SKF, NTN Corporation and NTN USA Corporation (all as defined below, and collectively ‘Defendants’) manufacture, market, and sell Automotive Bearings throughout the United States.” The court rejected this argument, since the complaint later listed NSK USA as a defendant under “NSK Defendants.” Because the end-payors pleaded sufficient allegations to plausibly implicate NSK USA in the conspiracy, the motion to dismiss was denied.

The case number is 2:12-cv-00500 (Master File No. 12-md-02311).

Attorneys: Adam T. Schnatz (The Miller Law Firm) for Plaintiffs. David A. Ettinger (Honigman, Miller, Schwartz and Cohn LLP) for NSK, Ltd.

Companies: NSK Americas, Inc.; NSK, Ltd.

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