Auto Dealerships Eligible for $1 Billion Price-Fixing Settlement

Thousands of U.S. automotive dealerships are eligible for part of a $1 billion class action lawsuit settlement following an anti-trust investigation. The lawsuit accuses 47 automotive part suppliers and 65 individuals of conducting unlawful price-fixing activities since 1999.

The findings and subsequent lawsuit are the result of the largest antitrust investigation in American history. Conducted by the U.S. Department of Justice, the illegally priced parts included wire harnesses, occupant safety systems, bearings, starters, and alternators.

The investigation first became public in 2010 following a F.B.I. raid on the offices of Japanese suppliers Yazaki North America Inc., Denso International Inc., and Tokai Rika Group North America. Investigators originally focused on Japanese suppliers and their U.S. subsidiaries but quickly expanded the inquiry internationally by expanding to include activities throughout Asia and Europe.

Approximately 8,000 dealerships in 29 states and the District of Columbia are potentially eligible to receive compensation, more than 4,305 of which have already filed a claim. In an effort to be efficient, all suits were consolidated and transferred to Judge Marianne Battani in the U.S. District Court in Detroit in February 2012.

Parsing out the details of what each dealership is owed is complex. According to co-lead counsel, Shawn Waiter of St. Paul, Minn., the price fixing “affected the whole industry.” Claims and payouts for each dealership will vary based on a formula developed by the attorneys. “It’s a weighted calculation based on the number of vehicles you’ve sold over those time frames, weighted by the model and the make,” Raiter stated.

Automakers and manufacturers of heavy-duty trucks who purchased price-fixed parts directly from a supplier are eligible to claim part of the settlement, regardless of their location. Consumers and dealerships that indirectly purchased the price-fixed parts may or may not receive compensation, depending on where they conduct business. Dealerships and consumers located in the District of Columbia or the 29 states which allow indirect buyers to file a claim have a chance at receiving some of the settlement. The 29 states are Arizona, Arkansas, California, Florida, Hawaii, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia and Wisconsin.

The location based determination is derived from a 1977 Supreme Court case involving masonry, Illinois Brick Co. v. Illinois. According to San Francisco based antitrust lawyer Jeff VanHooreweghe, “The issue is that, on the federal level, there is generally no recovery for damages for indirect purchasers, with some exceptions. A lot of states decided that they did not like the ruling, so they passed what are known as Illinois Brick repealer statutes to allow recovery of damages.”

Dealerships interested in filing a claim can register at autodealersettlement.com. Consumers can similarly register at autopartsclass.com and view a list of the affected vehicles. It is anticipated that the First Round of Settlements checks will be released in Spring of 2018. The case is known as In re Automotive Parts Antitrust Litigation, No. 12-md-02311. United States District Court for the Eastern District of Michigan.