Chicago Firm Gears Up for Antitrust Class Action over Automotive Filters

LawyersandSettlements.com
September 25, 2008
By Brenda Craig

Chicago, IL: The lawsuit is barely out of the starting gate, but it is revving up to become a huge antitrust class action lawsuit against some of the most recognizable names in the automotive supply industry. It is all about those pricey automotive filters that drivers regularly replace to keep their engines running smoothly. In documents filed in an Illinois District Court, it is alleged that Champion Laboratories, Purolator Filters N.A.L.L.C., Honeywell International Inc. and 7 other manufacturers engaged in a conspiracy to fix, raise and otherwise manage prices paid for their products over a period of 9 years.

Michael Freed, from the Chicago area firm of Freed, Kanner, London & Millen has been appointed as one of the interim co-lead counsel representing the direct purchaser plaintiffs. "It's the size of the overcharge potential involved that makes it so significant," says Freed. "You have a market here that runs into the billions annually. So when you take into account the length of the alleged collusion you are taking about billions and billions of dollars."

This particular morning, Freed is at the Midway Airport in Chicago on his way to New York. "The complaint has been filed, but we are at a very preliminary stage," says Freed. "The case has not been certified as a class action, that is months away."

Freed's firm represents the direct purchasers of the filters---the companies that bought filters from the manufacturers and then retailed them to vehicle owners. However, millions of vehicle owners will be getting in gear and filing a lawsuit of their own. A separate class action is expected to be filed soon on behalf of consumers by a yet undetermined law firm.

The filters described in the documents cover the waterfront in terms of the kinds of automotive filters regularly used in vehicles in the United States. They include transmission filters, air filters, oil filters, and water filters. The total value of the filter manufacturing industry is believed to be about 3 to 5 billion dollars a year.

According to the documents filed by Freed's firm, a former employee of Champion spilled the beans during a wrongful termination suit in 2006 in Tulsa Oklahoma. In a sworn affidavit, the former employee described how Champion executives faxed price increases to its competitors two months before customers were advised of the changes. The former employee also detailed a meeting at a trade show where executives of air filter manufacturing companies agreed on raising prices and not to compete with each other's customers. He also described a meeting where executives agreed on a 6 percent increase and then told the sales team to be sure to inform competitors.

Defendants in these kinds of cases typically try to have suits shunted aside, but Freed is confident the details in the complaint make a strong argument for the case to move forward. "It is not unusual for defendants to file motions to dismiss in these kinds of cases," says Freed, "but we believe what we have in our complaint should carry."

An attorney with 4 decades experience, Freed sees some problems ahead in the area of antitrust litigation. "Everyone is focused on the banking industry right now, but there is more and more concern about a crisis in antitrust cases." Freed believes the problem is not regulation, but rather enforcement of the law.

"Things are so bad and manufacturers are trying to maximum their profits sometimes in illegal ways," says Freed. "Everyone is struggling and the victims of antitrust violations need to be protected more than ever."

Michael Freed is a founding partner in the firm Freed, Kanner, London & Millen LLC, specializing in complex litigation with an emphasis in antitrust and securities actions. Mr. Freed is a 1962 graduate of the University of Chicago Law School and is a member of the Chicago Bar Association, American Bar Association, and Federal Bar Association.

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