Japanese auto supplier agrees to settle price-fixing civil suit

Washington A Japanese auto supplier has agreed to pay $4.56 million to consumers and cooperate with attorneys who are suing many other firms the first settlement in a massive antitrust case, lawyers said Tuesday.

Attorneys representing car buyers said Nippon Seiki Co. Ltd. and its affiliates will pay $4.56 million to consumers and will cooperate in the case against the remaining defendants.

Nagoka, Japan-based Nippon in 2012 pleaded guilty and agreed to pay a $1 million criminal fine for its role in a conspiracy to fix prices of instrument panel clusters, commonly known as meters. The Justice Department said Nippon conspired to rig bids for and to maintain prices of instrument panel clusters sold in the United States from at least as early as April 2008 until at least February 2010.

Instrument panel clusters are the mounted array of instruments and gauges housed in front of the driver of an automobile.

To date, 26 people have been charged in the department’s investigation into price-fixing and bid-rigging in the auto parts industry. Additionally, 21 companies have agreed to plead or have pleaded guilty and pay a combined $1.6 billion in criminal fines in what the antitrust division says is the Justice Department’s largest-ever antitrust investigation. About 25 million cars sold in the U.S. since 2003 were affected; the government has said Detroit’s Big Three and major Japanese automakers are among the victims.

The class action proceeding, pending in federal court in Detroit, raised price-fixing and bid-rigging claims surrounding auto parts firms sale of more than two dozen automotive parts for use in new automobiles.

Given Nippon Seiki and its affiliates promise of cooperation, this is an ice-breaker settlement that significantly increases pressure on the remaining instrument panel cluster parts defendants, said Hollis Salzman of Robins, Kaplan, Miller & Ciresi LLP, Co-Lead Counsel for the consumers and co-chair of the firms Antitrust and Trade Regulation Practice. Salzman represents a group of nearly 50 individual purchasers of new automobiles containing the auto parts at issue in the litigation.

Auto dealers who believe they paid inflated prices for cars purchased from automakers because of the price fixing are also among those that have sued.

This settlement is particularly gratifying because, while the criminal cases are nearly three years old, it marks the first civil recovery arising from the same alleged antitrust violations, Salzman added.

In November, the Justice Department said three more high-ranking auto parts executives have agreed to plead guilty in its wide-ranging price-fixing and bid-rigging scandal, while a grand jury in Cleveland indicted two other executives for fixing prices of parts in Toyota Motor Corp. vehicles.

The execs of Tokyo-based Takata Corp. will serve time in U.S. prisons for their participation in a conspiracy to fix prices of seat belts installed in cars sold in the United States.

According to the one-count felony charges filed in Detroit, Yasuhiko Ueno, Saborou Imamiya and Yoshinobu Fujino aided a conspiracy to rig bids and fix the prices of seat belts sold to Toyota Motor Corp., Honda Motor Co., Nissan Motor Co., Fuji Heavy Industries Inc. (the parent of Subaru) and Mazda Motor Corp. in the U.S. and other markets.

The three have agreed to serve prison sentences ranging from 14 to 19 months.

Takata makes safety systems, including seat belts. Takata executives and their co-conspirators carried out the conspiracy by, among other things, agreeing to coordinate bids submitted to automobile manufacturers, the Justice Department said. Takata last month agreed to plead guilty for its involvement in the conspiracy and to pay a criminal fine of $71.3 million.

The Justice Department also announced that Masao Hayashi and Kenya Nonoyama were indicted in November on conspiracy charges for fixing prices of automotive anti-vibration rubber parts sold in Toyota Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander vehicles. The parts are installed in suspension systems and engine mounts. They each face 10 years in prison and a $1 million fine.

In July, Ford Motor Co. sued another Japanese auto supplier, accusing it of price-fixing and bid-rigging over the sale of key electrical equipment.

The Dearborn automaker sued Fujikura Ltd., and its U.S. unit, Fujikura Automotive America LLC based in Novi, in U.S. District Court in Detroit, saying the firm “and its co-conspirators formed an international cartel to suppress and eliminate competition.”

As a result “Ford was forced to pay substantially higher prices for wire harnesses than it would have paid absent the conspiratorial conduct,” the automaker said in its complaint. Ford said it purchased more than $10 billion in wire harnesses from 2000 through 2010, but didn’t specify how much it thought the price fixing and bid rigging had cost it.

Tokyo-based Fujikura in April 2012 agreed to plead guilty and to pay a $20 million criminal fine for its role in a conspiracy to fix prices of automotive wire harnesses and related products installed in U.S. cars. The Justice Department said Fujikura’s involvement in the conspiracy lasted from at least as early as January 2006 until at least February 2010. Fujikura agreed to cooperate with the department’s ongoing investigation.

The Justice Department investigation first came to light with search warrants executed by the FBI in early 2010 at the Metro Detroit U.S. headquarters of three Japanese suppliers.

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Japanese auto supplier agrees to settle price-fixing civil suit
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