Dealers poised for price-fix payments
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Coronavirus Coverage
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • COVID-19 vaccines reaching auto plants, but challenges remain
      Working online to book COVID shots, office manager Billie Jean Pellet “typed so fast smoke came off the keyboard,” said dealer Earl Stewart.
      Dealership team hunts for vaccine
      Hope stalls for rebound in European auto sales
      Dana net income falls 53% in Q4
    • Chinese tech companies are turning their sights on EVs
      Telecom firm ZTE preparing electric vehicle product line
      Changan
      Huawei, battered by U.S. sanctions, plans foray into EVs, report says
      VW China
      Top VW China exec said to eye joining Renault as local CEO
      Geely to create separate EV business unit
    • Udelv CEO offers a historical perspective on high-tech goods delivery
      Q&A with BrightDrop CEO Travis Katz
      Automakers optimize manufacturing, customize products through digitization
      3D-printing a Porsche: Making concepts matter
    • The Cruise AV autonomous vehicle, based on the Chevy Bolt
      GM-backed Cruise is in talks to buy startup Voyage, report says
      Fisker's next wave: A premium people's car
      A worker fixes a power line in Austin, Texas, last month.
      Bidirectional EVs could lend a hand in power crisis
      Toyota banks on plug-ins as rivals push BEVs
    • Elon Musk interview
      Tesla’s Model Y, on sale since March, is a showcase of EV technologies competitors will benchmark.
      Technologies of Electrification
      Cadillac’s Lyriq EV will be unveiled Aug. 6.
      Future Product Pipeline
      A CALL TO ACTION
    • COVID-19 vaccines reaching auto plants, but challenges remain
      In SPACs, dealers see viable option to go public
      New-school solution for recruiting auto techs
      Is your dealership a great place to work?
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Retail Technology
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Talk From The Top
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • Stellantis
      • Alfa Romeo
      • Citroen
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Lancia
      • Maserati
      • Opel
      • Peugeot
      • Ram
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Virtual reveals (Sponsored)
      • MITSUBISHI: 2022 Outlander
      • NISSAN: 2022 Pathfinder and 2022 Frontier
      • GENESIS: 2021 GV80
      • KIA: 2021 K5
      • LEXUS: 2021 IS
      • NISSAN: 2021 Rogue
      • TOYOTA: 2021 Venza and 2021 Sienna
    • Auto Shows
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • The new Stellantis pickup: Schrödinger's Dakota
      Fisker gets a rare second chance to build his own car company
      Gerry McGovern is right man to steer Jaguar reinvention
      Forget the Ford GT; Moray Callum's biggest hit is the aluminum F-150
    • Jaguar is about to undergo its fourth reinvention in five decades as owner Tata Group takes a second crack at shaking up a brand whose glorious past has rarely translated into a profitable present or sustainable future.
      Jaguar Redo, Part IV
      view gallery
      1 photos
      Chip Shortage
      Jaguar is about to undergo its fourth reinvention in five decades as owner Tata Group takes a second crack at shaking up a brand whose glorious past has rarely translated into a profitable present or sustainable future.
      view gallery
      9 photos
      Leo Michael Cartoons - Q1 2021
      Dealers hiring from hospitality sector
      view gallery
      1 photos
      Hospitality Hires
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • March 2, 2021 | Will EV bets pay off?
      February 23, 2021 | Reliability continues to soar
      February 16, 2021 | Apple looks to take bite out of automotive
      February 9, 2021 | ‘Super’ opportunity for automakers
    • Reinvention of Jaguar is a tall task for McGovern
      Jamie Butters
      EV plans and some damn lies
      Mark Paul
      What dealers can do if D.C. power shift affects recalls
      Are we in the midst of a fourth industrial revolution?
    • Shanghai hints at how Chinese cities will pursue electrification
      How Tesla, GM transformed EV market in 2020
      Is sales recovery nearing an end?
      Beijing's uphill battle to boost EV sales
    • U.S. Dealership lot
      Lean lots won't last without new dealer discipline
      Taiwan Semicon microchips BB web.jpg
      Chip shortage shows need for new thinking
      Digital demands squeeze smaller auto retailers
      President Joe Biden’s move to electrify all government vehicles could push forward charging infrastructure development.
      Dealers aren't wrong to be wary of EV hype
    • New look at Nissan a positive sign
      Embrace EV ideas at our doorstep
      Dealers are right to worry about EVs
      Buying EV without dealer is just easier
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: Toyota, Mazda, Subaru, Hyundai, Kia slide in Feb.; Volvo, Genesis rise
      AutoNews Now: Toyota RAV4 probed for fire risk
      AutoNews Now: Nissan 'breakthrough' could lower emissions
      AutoNews Now: Most buyers still undecided on EVs, J.D. Power finds
    • First Shift: Stellantis aims for higher profit margins in 2021
      First Shift: Volvo's electric push includes online-only sales
      First Shift: U.S. dealership profits surge 48% to record high
      First Shift: Tesla output in Calif. resumes after 2-day shutdown
    • Bert Ogden Auto Group
      Back to basics: How a Texas group is cutting costs, saving millions 
      COVID, chips and checks: Sales headwinds and tailwinds for 2021
      N.J. dealer helps position peers for ‘electric revolution’
      DCH Millburn Audi
      'Finding the diamond in the rough': How 2020's No. 1 dealership retains talent
    • Why the pickup is the auto industry's 'battleground'
      Carlos Ghosn's quest to restore his reputation
      Why Ford must execute to avoid 'deep trouble'
      Why Honda is 'locked and loaded' for 2020
  • EVENTS & AWARDS
    • Events
    • Awards
    • Congress Conversations
    • Retail Forum: NADA
    • Canada Congress
    • Europe Congress Conversations
    • Leading Women Conference
    • Fixed Ops Journal Forum
    • ANE Shift
    • Shift: Mobility at a Crossroads
    • Shift: The Future of Mobility (CES)
    • 100 Leading Women
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealerships To Work For
    • PACE Program
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • AN Solutions
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • In the Driver's Seat
    • Publishing Partners
    • Classifieds
    • Companies on the Move
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Daily Drive Podcasts
    • AAM
    • Gentex
    • Reputation.com
    • Ricardo
    • Ricardo
    • Allstate: Want more from your F&I?
    • Ally: Navigating the future of automotive retailing
    • Amazon Web Services: Any place, any time, any channel
    • Amazon Web Services: The power of the cloud
    • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
    • Epic Games: Transforming the auto industry with digital assets
    • FTI Consulting: Crisis as a catalyst for change
    • Google: 5 trends shaping the auto industry's approach to a new normal
    • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
    • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
    • IHS Markit: COVID-19: The future mobility delusion
    • Level5: 2020 Automotive E-Commerce Report
    • Naked Lime: Bring social reputation together as part of big-picture marketing
    • Wells Fargo Auto: Switching gears from LIBOR to SOFR
    • Ally: Do It Right
    • DealerSocket
    • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
    • Facebook: The road to a zero-friction future
    • Guide To Economic Development
    • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
MENU
Breadcrumb
  1. Home
  2. Dealers
November 13, 2017 12:00 AM

Dealers to get piece of $1 billion bounty from price-fixing cases

Larry P. Vellequette
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Franchised dealers in states (and the District of Columbia) shown in light blue are eligible to participate in settlements with suppliers who violated antitrust laws. Dealers in other states are not eligible because their state laws do not allow for such recoveries.

    Thousands of U.S. dealerships that overpaid for vehicles because of price fixing by suppliers are poised to receive a payoff.

    The dealerships will share in the settlements of an international investigation that snared 47 suppliers for rigging bids on parts over nearly two decades.

    But not all stores harmed by the scheme — which led to the largest antitrust investigation in U.S. history — will reap the benefits.

    About 8,000 dealerships in 29 states and the District of Columbia, representing every franchise, are eligible for compensation. More than 4,350 have filed claims to share in more than $335 million from about 50 supplier settlements, according to lawyers representing the dealerships. And with 20 settlements pending, dealerships in those states may still stake a claim.

    But stores in 21 other states will get nothing, because laws in those states prohibit recovery of damages for indirect victims of price fixing.

    Dealerships can get "injunctive relief" — through which a court would order suppliers to stop fixing prices — but no money, even though they suffered the same financial injury as stores being compensated.

    For eligible dealerships, the first tranche of settlement checks is likely to be issued in spring and a second batch in summer, said Jonathan Cuneo, co-lead counsel on the legal team representing dealerships.

    In a statement, the lawyers said dealers "with an active business throughout the class-[action] periods will receive thousands of dollars, with the largest dealer groups receiving more than six-figure payouts when all the cases are concluded."

    They added that the payouts will "depend on the sales volume, brands, and models sold by each dealership."

    The U.S. Department of Justice's investigation surfaced in 2010 when the FBI raided the offices of Yazaki North America Inc., Denso International America Inc. and Tokai Rika Group North America.

    Investigators in the U.S. initially focused on Japanese suppliers and their U.S. subsidiaries, but parallel investigations launched in Asia and Europe.

    The first plea agreement, in September 2011, involved Furukawa Electric Co. of Japan. Three U.S.-based executives agreed to plead guilty and the company agreed to pay a $200 million fine.

    Altogether, 65 individuals and 47 companies have been charged, with the vast majority agreeing to plea bargains involving large fines and prison time for executives. Most also agreed to cooperate with investigators, according to the Justice Department's antitrust division.

    Individuals and companies have agreed to pay more than $2.9 billion in fines, but the money did not go to vehicle manufacturers, dealers, parts retailers and consumers, which followed up with scores of civil suits in federal court against the companies.

    In February 2012, the suits were consolidated and transferred to Judge Marianne Battani in U.S. District Court in Detroit, who retains jurisdiction over the civil litigation. Thus far, more than $1 billion has been set aside for affected parties, including the $335 million for dealerships, according to the plaintiffs' lawyers.

    Complex cases

    Figuring out what individual dealerships are owed is complex, in part because most suppliers shipped components to multiple automakers, which used the parts on some but not all of their vehicles.

    One vehicle might have an alternator, a wire harness, an ignition coil and an inverter all sold to the automaker at inflated prices and thus subject to a settlement.

    A vehicle from a different manufacturer might have one or two of those components, plus other affected parts. Also, some price fixing took place almost two decades ago, and some is alleged to have occurred as late as 2016.

    To save money on administering dealership claims, lawyers representing retailers in the class actions have bundled the settlements and come up with a formula that bases the claims on the types and number of vehicles sold with the affected parts.

    Dealerships filing claims, however, need only submit year-end statements filed with their manufacturers as proof of claim for a given year.

    "It's a weighted calculation based on the number of vehicles you've sold over those time frames, weighted by the model and the make," said co-lead counsel Shawn Raiter of St. Paul, Minn. The plaintiffs used a consultant to draw up the process, which was later approved by the court.

    Raiter said the average payout per rooftop cannot be easily calculated. He said the price fixing "affected the whole industry," so the weighted claims process takes into account the impact on sales of competitive vehicles as well as those directly affected.

    Filing claims

    Dealerships and consumers in 29 states and the District of Columbia are eligible to share in settlements with suppliers found guilty of price fixing.

    • Dealerships can register at autodealersettlement.com.

    • Year-end automaker statements can be submitted as proof of a claim for a given year.

    • 1st- and 2nd-round settlement checks are to be mailed in spring and summer. 4 payout rounds are expected.

    • Consumers can register at autopartsclass.com, which lists affected vehicles.

    • Consumers will need VINs and proofs of purchase/lease.

    Source: autodealersettlement.com and autopartsclass.com

    'Claims rate over 50%'

    Claims for the first two rounds of payouts have been completed, while two more expected rounds remain open as settlement negotiations proceed, the plaintiffs' lawyers said. Dealers who file a successful claim in an early round won't have to refile for subsequent rounds.

    "There are about 8,000 NADA members in these covered states, and we've had a claims rate over 50 percent, which is astonishingly high," said co-lead counsel Don Barrett of Lexington, Miss.

    As direct buyers of the price-fixed parts, automakers — and a second, smaller class of heavy-duty truck manufacturers — can recover their damages regardless of their location. But the situation is more difficult for dealerships and consumers because of a 40-year-old U.S. Supreme Court case involving masonry.

    To have a chance at a share of the settlement, dealership claimants must live in the District of Columbia or one of these 29 states: Arizona, Arkansas, California, Florida, Hawaii, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia and Wisconsin.

    Those in other states are ineligible.

    San Francisco antitrust attorney Jeff VanHooreweghe said the different treatments by state result from a 1977 Supreme Court case, Illinois Brick Co. v. Illinois.

    "The issue is that, on the federal level, there is generally no recovery for damages for indirect purchasers, with some exceptions," VanHooreweghe said. "A lot of states decided that they did not like that ruling, so they passed what are known as Illinois Brick repealer statutes to allow recovery of damages."

    VanHooreweghe said such splits are common in cases such as the auto parts price-fixing investigation. "In practice, we defend against claims under the repealer statutes all of the time, as indirect purchasers often file private civil suits following an antitrust criminal investigation."

    RECOMMENDED FOR YOU
    Ohio lawmaker proposes direct-sales allowance for Lordstown Motors
    Related Articles
    Dealers should help their customers with consumer side of parts anti-trust case
    Dealers should help their customers with consumer side of parts anti-trust case
    Letter
    to the
    Editor

     

     

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Ohio lawmaker proposes direct-sales allowance for Lordstown Motors
    Ohio lawmaker proposes direct-sales allowance for Lordstown Motors
    Lithia adds another 5 dealerships in Florida
    Lithia adds another 5 dealerships in Florida
    Five Star Automotive buys 5 Ind. stores, expands into Midwest
    Five Star Automotive buys 5 Ind. stores, expands into Midwest
    Sponsored Content: PODCAST: Emerging areas of fraud risk and vulnerability
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    See more newsletter options at autonews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Digital Edition
    Automotive News 3-1-21
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal 2-8-21
    Read the issue
    See our archive
    RETAIL TECHNOLOGY NEWSLETTER: Sign up for our Tuesday afternoon newsletter that breaks down the latest developments in how technology is changing the auto sales landscape.
    AUTOMOTIVE NEWS TV WITH TOM WOROBEC: Sign up for our afternoon newscast and catch up on the top news of the day with our brief video roundup.
    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Retail Technology
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Talk From The Top
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • Stellantis
          • Alfa Romeo
          • Citroen
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Lancia
          • Maserati
          • Opel
          • Peugeot
          • Ram
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Virtual reveals (Sponsored)
          • MITSUBISHI: 2022 Outlander
          • NISSAN: 2022 Pathfinder and 2022 Frontier
          • GENESIS: 2021 GV80
          • KIA: 2021 K5
          • LEXUS: 2021 IS
          • NISSAN: 2021 Rogue
          • TOYOTA: 2021 Venza and 2021 Sienna
        • Auto Shows
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Coronavirus Coverage
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • Congress Conversations
        • Retail Forum: NADA
        • Canada Congress
        • Europe Congress Conversations
        • Leading Women Conference
        • Fixed Ops Journal Forum
        • ANE Shift
        • Shift: Mobility at a Crossroads
        • Shift: The Future of Mobility (CES)
      • Awards
        • 100 Leading Women
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealerships To Work For
        • PACE Program
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • AN Solutions
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Daily Drive Podcasts
      • Webinars
      • In the Driver's Seat
        • AAM
        • Gentex
        • Reputation.com
        • Ricardo
        • Ricardo
      • Publishing Partners
        • Allstate: Want more from your F&I?
        • Ally: Navigating the future of automotive retailing
        • Amazon Web Services: Any place, any time, any channel
        • Amazon Web Services: The power of the cloud
        • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
        • Google: 5 trends shaping the auto industry's approach to a new normal
        • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
        • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
        • IHS Markit: COVID-19: The future mobility delusion
        • Level5: 2020 Automotive E-Commerce Report
        • Naked Lime: Bring social reputation together as part of big-picture marketing
        • Wells Fargo Auto: Switching gears from LIBOR to SOFR
        • Ally: Do It Right
        • DealerSocket
        • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
        • Facebook: The road to a zero-friction future
        • Guide To Economic Development
        • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
      • Classifieds
      • Companies on the Move
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds