June 24, 2013

Federal Court Refuses To Slam On The Brakes In Auto Parts Antitrust Class Action

A group of auto parts manufacturers continues to face claims of bid rigging and price fixing in a multidistrict litigation (“MDL”) following a Michigan federal judge’s refusal to dismiss federal antitrust claims.

Direct and indirect purchasers in the putative class action of In re Automotive Parts Antitrust Litigation accuse the manufacturers of conspiring to fix the prices of wire harness systems in automobiles.  The allegations track a U.S. Department of Justice (“DOJ”) investigation into the auto industry, which has already resulted in guilty pleas involving the manipulation of wire harness pricing during secret meetings.

Judge Marianne Battani of the U.S. District Court of the Eastern District of Michigan dismissed indirect purchasers’ antitrust claims brought under the state laws of Massachusetts, Missouri, and Illinois, among others. The court, however, declined to dismiss direct purchasers’ federal antitrust claims accusing defendants of creating a global conspiracy to control pricing and manipulate bidding.

In an order separate from the order dismissing the state claims, the court concluded that the federal antitrust allegations could survive because the direct purchasers had sufficiently informed defendants of the substance of the claims, and that the allegations provide “a reasonable expectation that discovery may reveal further evidence of an illegal agreement.”  The class action complaint was sound, the court concluded, because it sufficiently identifies the products involved and the methods of communication utilized by conspiring competitors during the secret meetings.  The court also reasoned that the allegations are consistent with the guilty pleas entered in the DOJ action.    

This ruling on the wire harness portion of the MDL is only a fraction of the claims in this massive antitrust action.  Similar claims have been brought concerning alleged anticompetitive conduct in the manufacture and sale of other automotive parts, including instrument clusters, fuel senders, heater controls, and alternators.

Categories: Antitrust Litigation

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