Denso to pay $255 million in antitrust case settlements to dealerships, consumers

Denso Corp. has agreed to pay $255 million in settlements between two class actions over price-fixing allegations in the U.S., the Japanese supplier said Friday in the latest development of the largest antitrust scandal in U.S. history.

The lawsuits, which stem to 2011 and mirror each other in their accusations, were filed on behalf of U.S. dealerships and consumers who said they paid more for their vehicles because of alleged price-fixing schemes by Denso and several other major auto suppliers.

The civil suits, filed in U.S. District Court in Detroit, arose from dozens of U.S. criminal complaints and settlements involving auto suppliers over price-fixing in the last five years. To date, those prosecutions have yielded charges against 64 individuals and 44 companies, along with $2.7 billion in criminal fines, the U.S. Justice Department said last month.

In 2012, as a result of the federal investigation, Denso agreed to plead guilty and pay a $78 criminal million fine.

The federal prosecution -- the largest antitrust action in U.S. history -- remains active. Similar investigations are ongoing in Europe and Asia.

U.S. litigation

Defendants in the civil court cases included Denso and other parts makers that did business with Denso.

In December, many of the plaintiffs consolidated their separate cases into two suits -- one each for U.S. dealerships and consumers -- with their legal focus centered on Denso, the world’s second-largest automotive supplier.

The settlements, which are still subject to approval by a federal judge, total $193.8 million for the consumers and $61.2 million for the dealerships.

“Denso is committed to prevent recurrence of any inappropriate conduct and strives to restore full confidence from all stakeholders by complying with all applicable antitrust laws around the world,” the Toyota-affiliated supplier said in a statement.

Denso said it “does not expect any significant impact on its consolidated financial forecast” for the fiscal year ending March 31, 2017, as a result of the settlements.

Steven Williams, of Cotchett, Pitre & McCarthy in San Francisco, one of the lawyers who represented the consumers, said the settlement is meant to bring peace between Denso and the consumers, especially given the case’s complexity.

Williams noted the overall litigation includes Tier 1 and 2 suppliers, manufacturers, dealerships and consumers.

The $193.8 million consumer settlement is the largest in the litigation so far.

“Today’s settlement brings the recoveries in this case to $482 million,” Williams said in an emailed statement. “This settlement and this litigation have been difficult and hard-fought since the case began in 2011, and we will continue this fight against the remaining defendants to recover for our clients and the classes.”

‘Real checks’

Williams said he hopes consumers will be satisfied with the settlement. The $193.8 million will be put in a pot, along with other settlements. Williams estimated consumers and businesses could start submitting claims next year.

“Hopefully people will get real checks in their pockets,” he said.

More than 30 dealerships across the country were named as plaintiffs.

According to court documents, the $61.2 million will be allocated among the following auto parts that were involved in price-fixing: wire harnesses, instrument panel clusters, fuel senders, heater control panels, alternators, windshield wiper systems, radiators, starters, ignition coils, motor generators, HID ballasts, inverters, fan motors, fuel injection systems, power window motors, automatic transmission fluid warmers, valve timing control devices, air-conditioning systems, windshield washer systems, spark plugs and oxygen sensors and ceramic substrates.

Denso ranks No. 2 on Automotive News’ list of the 100 largest global suppliers with estimated worldwide automotive parts sales to automakers of $36.03 billion during its 2015 fiscal year.