Federal judges in Santa Fe, N.M., will hold a hearing on Thursday, May 29, to consider whether to consolidate anti-trust lawsuits that accuse automakers and dealer associations of conspiring to block the sale in the United States of so-called gray-market vehicles imported from Canada.
"There have been a plethora of federal suits filed," says Scott Palmer, a West Palm Beach, Fla., lawyer who represents consumers in class-action cases in California, Massachusetts, Illinois and New York. "The cases are still in their infancy."
According to the court clerk's office, 10 cases could be consolidated if that is what the seven-judge panel decides.
Consolidation of federal suits would ease pretrial discovery and trial, Palmer says. Once the panel chooses a location for the cases to be handled and assigns a judge to preside over them, the litigation can proceed, he says.
Consolidation would not directly control a variety of suits pending in state courts around the country, but Palmer says, "Likely there will be a coordination between the state and federal litigation to save everybody time and money."
One of the newest state cases was filed April 30 in California, accusing carmakers of conspiring to charge higher prices to American customers for new vehicles that cost less in Canada.
Plaintiffs' lawyer Joseph Alioto of San Francisco says industry practices mean that U.S. consumers pay at least 30 percent more than they would for the same vehicles in Canada.
"American manufacturers have enlisted Canadian dealers to boycott Americans," Alioto says.
"To police their conspiracy," he says, "the defendants threatened Canadian dealers, instructing them not to sell to Americans; conspired with the American dealers not to honor the warranties of vehicles sold to Americans; made Canadian dealers promise not to sell to Americans; and issued fines to Canadian dealers who sold to Americans."
Such practices illegally stifle competition, the federal and state suits allege.
The San Francisco Superior Court suit alleges violations of state business and unfair competition laws by U.S. and foreign manufacturers and the National Automobile Dealers Association in a conspiracy with Canadian, European and Asian corporations and the Canadian Automobile Dealers Association.
Alioto says a June 4 hearing is scheduled to consider coordinating cases pending in California state courts.
You can send e-mail to Eric Freedman at [email protected]