FRANCISCO – Plaintiffs in a decade-long lawsuit may finally take their case to
trial after an appellate decision revived claims against an automaker’s
The case involves California buyers of new vehicles who sued
several automobile manufacturers and dealer associations in 2003 for violating
state antitrust and unfair competition laws. The plaintiffs alleged that
manufacturers and associations conspired to keep cheaper, almost identical new
cars from being exported to the United States from Canada. That kept California
prices higher than they should be in a free market system, court documents
The trial court offered summary judgment against Ford U.S. and Ford
Canada in 2011, saying the plaintiffs didn’t show enough evidence that Ford had
colluded with other manufacturers to restrict exports. These were the last two
defendants in a suit that included several other automakers who either were
granted summary judgments or settled.
Plaintiffs appealed to California's First
Appellate District, challenging the trial court’s exclusion of evidence that
supported their conspiracy claims. In a detailed 56-page decision issued in
July by a three-member panel, the court affirmed the summary judgment ruling
against Ford U.S., but agreed with the plaintiffs and reversed summary judgment
against Ford Canada.
The decision provides a “clear path” to trial, Todd
Seaver, a partner at Berman DeValerio in San Francisco and an attorney for the
plaintiffs, told the Northern California Record.
“Plaintiffs are delighted with
the court of appeals decision, which is careful and thorough,” Seaver said.
“The in-depth treatment of the facts as they pertained to the trial court’s
evidentiary rulings were especially thoughtful. The decision means that there
is a clear path to trial now against Ford Canada, who is exposed to hundreds of
millions of dollars in damages to the class of California new vehicle buyers
Court documents detail the trade policies and economic realities
of the 1990s and early 2000s that made export from Canada to the U.S. both
cheaper and easier. This also made it more difficult to engage in the price
discrimination the industry relied on. At the relevant time in the lawsuit, the
automobile manufacturers named in the suit normally charged California dealers
10 to 30 percent more than they charged Canadian dealers for the vehicles.
Maintaining such a price difference became difficult when U.S. dealers could buy
more Canadian vehicles at a discount, and then bring them across the border to
sell them. Plaintiffs claim that several manufacturers worked together through
meetings and conference calls to discourage exports.
“The case involves the
international auto industry and its ability to price discriminate between low
and high demand markets,” Seaver said. “The lesson, however, involves the most
old-fashioned antitrust principle: do not collude with your
Evidence of their alleged collusion includes deposition testimony
of Pierre Millette, general counsel for Toyota Canada, who said he attended a
meeting with others in the industry who all supported the idea of “trying to
keep the vehicles in Canada.”
That testimony was excluded by the trial court
judge as hearsay, but the appellate judges concluded that was an error.
sufficient to conclude that if presented with the Millette testimony –
especially in the context of the meeting evidence discussed above – a
reasonable juror could find an unlawful conspiracy to restrict Canadian exports
more likely than not,” the decision states.
“In the end, this is, perhaps, as
the trial court acknowledged, ‘not an easy case,’” it concludes. “Viewing all
of the evidence as a whole and in the light most favorable to the plaintiffs,
we conclude that summary judgment must be denied in this case because it