A Texas manufacturer and installer of leather vehicle interiors has paid the state of Louisiana $150,000 to settle an antitrust suit accusing it of predatory pricing to drive a competitor out of business.
The state's civil suit accused Classic Softrim Inc. of Austin, Texas, of engaging in illegal monopolistic practices.
'This was a classic monopoly case by all standards,' said Louisiana Attorney General Richard Ieyoub, who filed the suit based on complaints from the firm's competitors. 'Classic Softrim undercut its prices only in Metairie (La.).
'Companies do this in order to run the other company out of business,' Ieyoub said. 'Classic Softrim was successful in doing just that.'
Under the settlement, Classic did not admit to any wrongdoing, said company attorney Robert Kutcher of New Orleans. 'We were accused of a lot of things. They were not only untrue, but were not provable,' he said. 'It made economic sense to settle.'
Richard Philippi, president of Custom Interiors Inc., a competing manufacturer in New Orleans, said Classic's pricing forced three New Orleans-area competitors to shut down and cost his own company $100,000 a year. 'I used to be their dealer, but they stopped selling to me and took all my customers.'
The settlement required Classic to close its Metairie, La., store for at least 10 years but allows the company to sell to dealers in Louisiana.
Philippi said Classic is selling interiors again to Custom.
'They have become reasonable corporate citizens,' he said, adding that one new competitor already has opened in the aftermath of the settlement. 'Now I think we have a fair situation in Louisiana.'
Under the settlement, four Louisiana law schools will receive $100,000 of the $150,000 payment to bolster their antitrust programs. Tulane University Law School, Loyola University Law School, Southern University Law Center and Louisiana State University Law Center will share that money equally. The remaining $50,000 will go to the attorney general's antitrust enforcement fund, attorney fees and the complainants.
Kutcher said the settlement also resolves a pending appeal in a separate federal court class-action lawsuit that had been dismissed without trial.