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.)
The subtext in venue arguments before the JPML is always
lead counsel assignments, since the firm that succeeds in having
the cases consolidated before the judge of its choice is
generally considered to have a leg up when the court appoints
counsel to lead the litigation. Persky of Labaton said he hopes
and expects Labaton -- which filed the first auto-parts
antitrust class action -- will be one of the firms selected as
lead counsel, but that it's too soon to make predictions. Hansel
of Preti Flaherty said all of the firms that filed direct
purchaser cases "are collaborating well."
Among the firms that have entered appearances for defendants
in the civil litigation are Jones Day for Yazaki; Latham &
Watkins for Sumitomo; Reed Smith for S-Y Systems; Arnold &
Porter for Fujikura America; and Wilmer Cutler Pickering Hale
and Dorr for Denso.
(Reporting by Alison Frankel)
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