Shout-Out: Winston and Cleary Lawyers Roll to Victory for Bearing Makers
It's the first decision on class cert in the sprawling Automotive Parts Antitrust Multidistrict Litigation, and is good omen for defendants in other pending cases.
January 10, 2019 at 01:33 PM
3 minute read
With billions of dollars in potential damages on the line, Winston & Strawn co-chairman Jeffrey Kessler and Cleary Gottlieb Steen & Hamilton partner Jeremy Calsyn led the fight to defeat class certification in an antitrust suit by direct purchasers of automotive and industrial machinery bearings.
It's the first decision on class cert in the sprawling Automotive Parts Antitrust Multidistrict Litigation, and is good omen for defendants in other pending cases.
The plaintiffs alleged that bearing makers conspired to fix prices—an accusation bolstered by assorted investigations and fines by antitrust regulators in the U.S., Japan, the EU and China.
“As a result of defendants' unlawful conduct, plaintiffs and members of the proposed class … paid higher prices for bearings than they would have paid in a competitive market, and therefore have suffered injury to their business and property,” stated the complaint, which was first filed in U.S. District Court for the Eastern District of Michigan in 2012.
The would-be class included of all purchasers of ball bearings, tapered roller bearings, roller bearings, and mounted bearings from 2004 to 2014.
But earlier this week, U.S. District Judge Marianne Barrani in the Eastern District of Michigan declined to certify the class.
While she found the plaintiffs satisfied the requirements for numerosity and commonality, she ruled that they fell short when it came to typicality and adequacy.
“The court is not persuaded that the record establishes the requisite uniformity of illegal practices through which the named [direct purchaser plaintiffs] and absent class members sustained their alleged injuries,” she wrote.
The plaintiffs alleged the bearing makers used three tactics to carry out their conspiracy–coordinated price increases in response to price hikes imposed by steel suppliers, bid-rigging in connection with requests for quotations by automobile manufacturers and others, and collusion in responding to annual price reduction requests by big customers.
But the named plaintiffs don't include any of the car makers or other so-called original equipment makers. Barrani agreed with defense counsel that the named plaintiffs “do not have the incentive (or personal knowledge needed) to develop evidence at trial of bid rigging or [annual price reduction] collusion for customized bearings purchased by the dominant members of the putative class.”
She added, “[T]he court finds that the claims asserted by the named [direct purchaser plaintiffs] are not typical of the claims asserted by absent class members … Accordingly, they cannot show that they will adequately represent the interests of class members that complain of injury as a result of these allegedly unlawful activities.”
Kessler, who represented bearing maker NTN Corp., said in an interview that he and his clients are “very gratified that the judge gave this careful and thoughtful consideration and came to what we believe is the right conclusion.”
The firm also represented JTEKT Corp., with partner Heather Lamberg in the lead.
Plaintiffs counsel include Freed Kanner London & Millen; Kohn, Swift & Graf; Preti Flaherty Beliveau & Pachios; and Spector, Roseman, Kodroff & Willis.
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