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From Antitrust Law Daily, June 21, 2016

Settlements of $225M finally approved in auto parts price fixing suit

By Greg Hammond, J.D.

A class of individuals and entities that purchased vehicles containing auto parts subject to an alleged price fixing conspiracy has obtained final approval of numerous settlements with nine companies and their affiliates, securing nearly $225 million in cash for the benefit of the class. In granting final approval, the federal district court in Detroit concluded that the settlements are fair, reasonable, and adequate to all concerned (In re Automotive Parts Antitrust Litigation, June 20, 2016, Battani, M.).

The actions were based on allegations that the automotive industry’s largest manufacturers, marketers, and sellers of numerous component parts fixed prices, rigged bids, and allocated markets and customers in the United States for their products, including wire harness systems, instrumental panel clusters, fuel senders, heater control panels, occupant safety systems, alternators, radiators, starters, switches, ignition coils, motor generators, steering angle sensors, HID ballasts, inverters, air flow meters, fuel injection systems, automatic transmission fluid warmers, valve timing control devices, and electronic throttle bodies.

A class of end-payor plaintiffs brought claims for violation of the Sherman Act and various state antitrust, consumer protection, and unjust enrichment laws. The class was defined as persons and entities who, for the last ten or more years depending on the settlement agreement, purchased or leased a new motor vehicle in the United States not for resale that included at least one of the settled parts, or indirectly purchased one or more of the settled parts as a replacement part, which were manufactured or sold by a settling defendant.

Settlements. The settlements involve nine settling-defendants, according to the court, and make available nearly $225 million in cash for the benefit of the settlement class. In addition to the monetary payment, the settling defendants must provide cooperation by: (1) producing documents and data relevant to the ongoing claims of the end payor plaintiffs against the non-settling defendants; (2) make witnesses available for interviews with end payor plaintiffs’ representatives; (3) provide assistance in understanding certain data and other information produced to end payor plaintiffs; and (4) facilitate the use of the data and information at trial.

Final approval. The court granted final approval of the settlements, finding that the balance of the benefits of the settlements outweighed the risks of continued litigation. The scale tilted heavily toward final approval because the end payor plaintiffs faced significant challenges to liability and an uphill battle as to proof of the amount of damages. The complexity of the antitrust class action, expense, likely duration of continued litigation, judgment of experienced counsel, and discovery that took place all favored final approval.

The court did not find any reason to deny final approval based on objections that the definition of the class was so broad that it resulted in a dilution to class members; that the class was too indefinite; or that the notice of the settlements did not comply with Federal Rule of Civil Procedure 23 or due process. Rather, the court determined that as data is provided from defendants and the original equipment manufacturers, a determination of membership in the class will be simplified.

The settlements were negotiated in good faith with counsel on each side zealously representing the interest of their clients and that there is a strong public interest in encouraging settlement, the court found. Lastly, the court concluded that the settlement classes satisfied Rule 23(a) and 23(b).

Attorney fees. In a separate order, the court awarded a partial attorney fee of 10 percent of the settlement proceeds. Approximately 5 percent of the total settlement proceeds ($11.25 million) was set aside for further litigation expenses.

The case is No. 12-md-02311.

Attorneys: Douglas A. Abrahams (Kohn, Swift and Graf, PC), Anna M. Horning Nygren (Lockridge Grindal Nauen PLLP) and Bernard Persky (Robins Kaplan LLP) for End-Payor Plaintiffs. Howard B. Iwrey (Dykema Gossett) and Andrew Marovitz (Mayer Brown LLP) for Lear Corp. James L. Cooper (Arnold & Porter LLP) and Joanne G. Swanson (Kerr, Russell and Weber, PLC) for Fujikura Ltd. Andrea M. Price (Barrasso Usdin Kupperman Freeman & Sarer) and Daniel M. Wall (Latham & Watkins LLP) for Sumitomo Electric Industries, Ltd.

Companies: Nippon Seiki Company Ltd.; Lear Corp.; Autoliv, Inc.; TRW Deutschland Holding GmbH; Yazaki Corp.; Panasonic Corp.; Hitachi Automotive Systems, Ltd.; T. RAD Co., Ltd.; Fujikura Ltd.; Sumitomo Electric Industries, Ltd.

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