“Ice-Breaker” Settlement Reached in Massive Auto Parts Antitrust Litigation
January 07, 2014
NEW YORK—January 7, 2013—Plaintiffs have secured the first settlement in one of the massive antitrust proceedings against automobile parts suppliers, which is part of the largest criminal international antitrust investigation in United States history. The settlement calls for Nippon Seiki and its affiliates to pay $4.56 million to consumers and to cooperate in the case against the remaining defendants.
The class action proceeding, pending in federal court in Michigan, sweeps together a litany of price-fixing and bid-rigging claims surrounding the defendants’ sale of more than two dozen automotive parts for use in new automobiles. The suit charged a Japanese company, Nippon Seiki, and its affiliates, among other manufacturers, with anti-competitive conduct in the market for instrument panel clusters which are the mounted array of instruments and gauges housed in front of the driver of an automobile. The allegations in the class actions, brought by consumers and others, stem from a Department of Justice antitrust investigation that has already resulted in corporate fines of more than $1.8 billion and guilty pleas from 23 different companies and 25 executives.
“Given Nippon Seiki and its affiliates’ promise of cooperation, this is an ice-breaker settlement that significantly increases pressure on the remaining instrument panel cluster parts defendants,” said Hollis Salzman of Robins, Kaplan, Miller & Ciresi L.L.P., Co-Lead Counsel for the end-payor plaintiffs and Co-Chair of the firm’s Antitrust and Trade Regulation Practice. Salzman represents a group of nearly 50 individual purchasers of new automobiles containing the auto parts at issue in the litigation.
“This settlement is particularly gratifying because, while the criminal cases are nearly three years old, it marks the first civil recovery arising from the same alleged antitrust violations,” Salzman added.
On civil proceeding:
- The case, formally titled In re Automotive Parts Antitrust Class Action, is a multi-district litigation (MDL) pending before the Hon. Marianne Battani in the United States District Court for the Eastern District of Michigan.
- The proceeding was consolidated before Judge Battani in June 2012.
- Federal antitrust claims against defendants accused of conspiring to fix prices of wire harness systems.
On criminal investigation:
- Robert D. Foley III, the special agent in charge of the investigation in the FBI’s Detroit division, said in connection with a guilty plea: “Those individuals who engage in price fixing and bid rigging negatively impact the automotive industry by causing vehicle buyers and makers to pay higher prices.”
- Companies that have submitted guilty pleas include Nippon Seiki Co. Ltd., Tokai Rika Co. Ltd., Furukawa Electric Co. Ltd., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc., DENSO Corp., Diamond Electric Manufacturing Co., Ltd., Hitachi Automotive Systems, Ltd., NSK Ltd., Panasonic Corp., Stanley Electric Co., Ltd., T. RAD Co., Ltd., Tuhata Corp., Toyo Tire & Rubber Co., Ltd., Valeo Japan Co., Ltd., and TRW Deutschland Holding GmbH.
- In February 2010, the FBI raided the Plymouth, Michigan offices of Tram, Inc., a subsidiary of Tokai Rika Co., and discovered that an executive had directed employees to destroy electronic and paper records.
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