Man in violation of privacy law

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Antitrust Law Daily, January 18, 2018

Panasonic unable to win dismissal of auto AC conspiracy claims

By Matt Pavich, J.D.

Allegations regarding meetings between various manufacturers of specific automotive air conditioning components plausibly suggested a conspiracy that included Panasonic Corporation, a federal district court in Michigan has ruled. The allegations advanced in the complaints did not simply reflect a series of disconnected conspiracies in air conditioning systems unrelated to the products manufactured by the Panasonic defendants. Panasonic’s motion to dismiss was denied. Separately, the court dismissed Florida and South Dakota state law claims of indirect purchaser plaintiffs (In re: Automotive Parts Antitrust Litigation, January 16, 2018, Battani, M.).

Background. The Indirect Purchaser Plaintiffs (IPPs) alleged that the defendants, manufacturers and suppliers of air conditioning systems, rigged bids and fixed prices for their systems. Those systems were comprised of a variety of auto parts used to cool the interior of automobiles and the IPPs defined them in the complaint as including automotive compressors, condensers, and HVAC units. The IPPs filed a class action suit alleging among other things, that the Panasonic defendants were involved in antitrust conspiracies, citing Panasonic’s 2013 plea deal for its part in a conspiracy to fix prices for other auto parts. They alleged that the Panasonic defendants met from 2007 to 2009 to discuss the market and their negotiations. The IPPs also noted that various co-defendants had already pled guilty to a conspiracy to fix prices. In addition, the IPPS asserted unjust enrichment claims under the laws of 25 states, including Florida, and antitrust claims under the laws of 23 states, including South Dakota. The Panasonic defendants moved to dismiss the class action complaint and the Defendants moved to dismiss the Florida and South Dakota claims.

Class action claims. The court denied the motion to dismiss the class action claims against the Panasonic defendants. The defendants argued that the conspiracy claim could not encompass them because they did not sell AC systems and because the IPPS failed to allege that the Panasonic defendants knowingly joined the alleged conspiracy.

The court found that the key issue was whether the use of the term "AC Systems" in the complaint was overreaching because it included various parts that made up the systems. The court ruled that the use of the term was not overreaching. It noted that throughout the litigation it had ruled that a defendant did not need to manufacture an entire system in order to have plausibly been part of the alleged conspiracy. It further ruled that even if the IPPs only asserted on example of conspiratorial conduct for each of the Panasonic defendants, the question of which parts they made would be determined in discovery. The court further noted that the allegations in this case involved participation in meetings about the AC market and their respective negotiations and that some of those participants had already pled guilty to their part in a conspiracy. Thus, the court held that the allegations were sufficient to survive the motion to dismiss.

The court also rejected the Panasonic Defendants contention that the complaint against them should be dismissed because the IPPs could not show that they made a conscious decision to join the conspiracy based on the sole allegation of specific conduct. The court acknowledged that trade association meetings alone do not constitute plausible evidence of a conspiracy. In this case, however, the IPPs alleged that the market itself had high entry barriers, which facilitate the formation of a cartel, and that the demand for the systems is inelastic. These conditions create a market in which collusion is economically viable, as evidenced by the admission of guilt by several defendants. Thus, the court found that the allegations against the Panasonic defendants were sufficient.

Florida claim. The court granted the motion to dismiss the unjust enrichment claim under Florida law. The court noted that the Florida state supreme court has recently ruled that unjust enrichment requires a direct benefit to the defendant. In this case, however, any benefit that the IPPs was conferred to other actors in the distribution chain, not to the Defendants. The court therefore dismissed the claim.

South Dakota claim. The court also granted the motion to dismiss the South Dakota antitrust claims. The court found that the claims failed because the IPPs failed to allege that any auto dealer plaintiff either resided, or made purchases in, South Dakota. South Dakota law requires that some of the allegedly unlawful conduct occurred in the state or that the effects of the conduct were felt in the state. In this case, because the IPPs failed to identify one plaintiff as residing in, or making purchases in, South Dakota, they were unable to show that any of the alleged injury occurred in that state.

The case is MASTER FILE NO. 12-md-02311.

Attorneys: E. Powell Miller (The Miller Law Firm) for Ifeoma Adams. A. Paul Victor (Winston & Strawn LLP) for Panasonic Corp.

MainStory: TopStory Antitrust MichiganNews

Back to Top

Antitrust Law Daily

Introducing Wolters Kluwer Antitrust Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.


A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.