In Fond Du Lac Bumper Exchange Inc. v. Jui Li Enterprise Co. Ltd. et al., and Arkansas Transit et al. v. Jui Li Enterprise Co. Ltd. et al., Eastern District of Wisconsin Judge Lynn Adelman denied defendants’ motion to dismiss a consolidated proposed class action alleging price fixing by Taiwanese aftermarket (AM) sheet metal auto parts makers. Plaintiffs, individuals and businesses that purchased the AM parts, are accusing defendants of violating the Sherman Act and several states’ consumer protection laws by participating in secret price-fixing meetings and strategic alliances that allowed them to share resources, divide up the market, and distribute the AM parts in theU.S. at unlawfully established prices. Defendants filed a motion to dismiss, arguing that plaintiffs’ Sherman Act claim that direct purchasers pass price increases on to end users, was too speculative, and that plaintiffs’ Sherman Act claim was time barred.
The court denied defendants’ motion, holding that since AM parts travel down the chain of distribution substantially unchanged, the price charged by the manufacturer will largely determine the price paid by the end user, and if defendants control over 95 percent of the U.S. AM parts market, it is easy for a direct purchaser to pass a price increase on to its customers because the majority of distributors are paying the same inflated price for AM parts. Therefore, because the manufacturers don’t have to worry about being undercut by a lower-cost competitor, the plaintiffs’ claim that they are being injured as a result of defendants’ alleged conspiracy is plausible. The court also held that because plaintiffs allege that defendants’ price fixing conspiracy was ongoing at the time the complaint was filed, it is not clear from the face of the complaint that the plaintiffs’ federal claim is untimely.