Geico's Price-Fixing Claims Mostly Dismissed by Mich. Federal Court
September 4, 2018—A Michigan federal court Thursday dismissed Geico’s price-fixing claims in massive multidistrict litigation against auto parts makers, but allowed the company an opportunity to sue the defendants individually, reported Law360.
U.S. District Judge Marianne Battani gave a partial win to the auto parts makers, who have been accused of conspiring to fix prices for car parts, saying that just because certain companies participated in one of the 16 alleged conspiracies, it does not mean they participated in another and Geico cannot combine all the conspiracy claims in a single suit, according to the report.
Some suppliers would be burdened by the additional expense of having to comply with large-scale discovery efforts even they were only involved in one or two of the sixteen alleged conspiracies, Battani said.
“The facts that establish a supplier’s participation in one such conspiracy — e.g., evidence of meetings, discussions, or other opportunities to collude in the setting of prices or allocation of the market — are likely to be largely if not entirely distinct from the facts that demonstrate this supplier’s involvement in another part-specific Conspiracy," Battani said.
However, Battani gave a partial win to Geico, saying the car insurance company could amend its complaints and sue the auto parts makers individually. The MDL arose out of an investigation into purported plots to rig prices for parts including ignition coils, radiators and windshield wipers. The investigations resulted in 12 executives pleading guilty and 10 Japanese executives being sentenced to prison. In total, car buyers have racked up more than $1 billion in settlements so far.
Geico has been deeply involved in the litigation, alleging it was the victim of numerous separate conspiracies.
The company filed suit in July in Michigan federal court against more than 70 auto parts companies embroiled in an international antitrust investigation that has yielded billions of dollars in criminal fines, saying it has been overcharged on insurance claims for more than 20 years due to numerous price-fixing conspiracies.
It claimed it was the victim of anti-competitive price-fixing, bid-rigging and market allocation conspiracies for auto parts ranging from interior trim products to fuel injection systems that were used for repairs that were ultimately paid for by Geico, going back to 1995, according to a July 13 complaint.
In August, Geico asked a Michigan federal court to hold off on granting final approval to $430 million in settlements in the price-fixing case against so that the court could mull whether the insurer can opt out of the deal before it’s finalized.
Representatives for the parties did not immediately respond to requests for comment.