Federal prosecutors weren’t the only lawyers celebrating Monday’s announcement of a new round of guilty pleas in the Justice Department’s ongoing investigation of price-fixing and bid-rigging in the sale of automotive parts. Private plaintiffs’ lawyers who’ve filed 45 follow-on class actions in the last three months were also excited about the DOJ’s deal, which includes the largest-ever criminal antitrust fine, $548 million, and prison terms for four Japanese executives of the Yazaki and Denso corporations.
Which plaintiffs’ firms stand to gain the most from Justice’s vigorous probe should soon become clear. Last Thursday the Judicial Panel on Multidistrict Litigation entertained arguments about where the private auto-parts antitrust cases should be consolidated. The JPML’s eventual decision will have a lot to do with who gets to lead the litigation.
Ten of the putative class actions against auto-parts makers have been brought on behalf of direct purchasers such as car dealerships. The other 35 or so were filed for indirect purchasers, who could number in the millions, since everyone who bought a car is an potential victim of the alleged price-fixing conspiracy. (Typically in antitrust litigation, direct purchasers have stronger evidence of a link between defendants’ wrongdoing and their damages, but indirect classes are bigger.)
Many of the direct and indirect cases have been filed in federal district court in Detroit, which is where the grand jury investigating the alleged auto-parts antitrust conspiracy is based and where many of the defendants have their U.S. operations. At last week’s JPML hearing, Bernard Persky of Labaton Sucharow (for the indirect purchasers) and Gregory Hansel of Preti Flaherty (for the direct purchasers) told the judges that Detroit was the most sensible venue for the consolidated litigation. “I said I thought it would be anomalous to send the case anywhere else,” Persky told me. “Like sending the BP Gulf Oil spill litigation to North Dakota.” The defendants also advocated for consolidation in Detroit, said Persky and Hansel.
But the JPML heard other suggestions as well: According to Persky, Howard Sedran of Levin, Fishbein, Sedran & Berman advocated for consolidation in Louisiana; Daniel Becnel of the Becnel Law Office argued for Alabama; and John Nevares of John F. Nevares & Associates asked the panel to send the cases to Puerto Rico. (None of them returned my calls for comment.)
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