Truck makers urge federal judge not to certify antitrust class action petition

[kscarbel2]

Land Line Magazine / February 9, 2015

Several truck makers are urging a federal judge in Delaware to deny class certification of an antitrust lawsuit filed by trucking companies that purchased Class 8 trucks equipped with Eaton transmissions.

The plaintiffs allege that several Class 8 truck makers entered into exclusive contracts with Eaton Corp., the largest supplier of Class 8 truck transmissions, in exchange for lucrative rebates and incentives. However, the plaintiffs claim the rebates and incentives offered to the truck makers were not shared or passed through to the purchasers of the trucks.

The plaintiffs say the exclusive agreements limited their choice of transmissions and eliminated a competitive check on pricing. They are seeking class action status for all persons and entities in the U.S. that purchased Class 8 vehicles that contained Eaton's truck transmissions beginning in Oct. 1, 2002, until the present.

The defendants in the lawsuit include: Eaton Corp, Daimler Trucks North America, Freightliner, Navistar International, International Truck and Engine, Paccar, Kenworth, Peterbilt Motors, Volvo Trucks North America and Mack Trucks.

The lawsuit was filed by Mark Wallach, who was the Chapter 7 trustee for Performance Transportation Services, which includes several other subsidiaries.

Before seeking Chapter 7 bankruptcy protection in 2007, the Performance Transportation claimed to be the second largest transporter of new automobiles and light trucks in North America. The motor carrier claims that it purchased Eaton transmission equipped trucks from one or more defendants.

“As a result of these purchases, (Performance Transportation Services) sustained injury and was damaged by reason of the antitrust violations alleged in this complaint,” the court documents states.

Other trucking companies have since joined the action, stating that they also were also harmed because of Eaton’s alleged long-term agreements with major truck makers.

The lawsuit stems from a suit originally filed by ZF Meritor, a joint merger of ZF Friedrichshafen AG and Meritor Inc., against Eaton in 2010 for alleged anticompetitive practices in the heavy-duty truck transmission market. In June 2014, Eaton agreed to pay the two companies $500 million.

[kscarbel2]

Once in a while, the veil is lifted.

[TeamsterGrrrl]

I'm surprised we're not seeing more antitrust action, especially against Daimler. The Antitrust Division rode herd on Continental Baking for decades, and Continental never had quite the 50+% market share Daimler now has. Sad that a lowly bankruptcy attorney representing a dead company has to do the Justice Departments job for them.

[grayhair]

I'm no lawyer, but to me this is far from a foregone conclusion. As I see it, the truck makers would not have signed up for that exclusive transmission deal unless is was at a favorable price deal for them. That said, the truck makers then still competed mightily with each other for sales to end user customers. One could argue that the truck buyers actually benefitted from the REDUCED cost of a mass produced standardized component.

Sure, ZF Meritor had a legitimate complaint. Truck buyers proving they were injured is an entirely different thing. I think they will need will need to prove the extent to which they were actually damaged. They might have a case though if they can prove the Eaton transmission was inferior to the ZF and therefore they incurred higher maintenance costs.

I wouldn't be surprised if this thing is thrown out. Somebody straighten me out with a different take please...