 Oil Filter Manufacturers Accused Of Price Fixing
This came across my desk from AP, I thought it was interesting to share.
Oil Filter Manufacturers Accused Of Price Fixing
Gas station owners, mechanics and car dealers have sued the nation’s largest manufacturers of oil, air, transmission and fuel filters, accusing them of an almost decade-long conspiracy to drive up prices.
The extent of the damages that will be claimed has not been determined, but is expected to run into the hundreds of millions of dollars, said Hollis Salzman, attorney for some of the plaintiffs.
“Everyone buys these filters,” Salzman said. “Consumers were also impacted by this conspiracy.”
More than 30 federal lawsuits alleging collusion have been filed in recent weeks in Connecticut, Illinois, Tennessee and New Jersey, Salzman said. Defendants include Honeywell International, Champion Laboratories and Purolator Filters.
“We don’t believe there is any merit to this case whatsoever and we will vigorously defend ourselves against it,” said Camilla Denison, Champion’s president.
In addition to the civil lawsuits, criminal charges are also possible.
“The matter is in the Department of Justice’s hands,” Salzman told The Associated Press Friday. “We’ve spoken to the Department of Justice about the case.”
A spokeswoman at the department declined to comment.
One of the Connecticut lawsuits, filed by the Gasoline and Automotive Service Dealers of America, accuses the defendants of holding meetings and reaching agreements to fix prices. It cites recorded conversations and information provided by a senior sales executive who worked for two of the companies and was a confidential informant.
William Burch, a former division sales manager for Champion who later filed a wrongful terminations suit against the company, has provided evidence of price fixing, according to a lawsuit filed in New Jersey by Worldwide Equipment, a Kentucky company that describes itself as one of the nation’s largest truck dealers.
Burch met with the FBI in 2006, according to the lawsuit.
Lawyers with the antitrust division of the Department of Justice interviewed Burch twice in recent months about the allegations, his attorney, Steven Stidham, told the AP on Friday. The Justice Department attorneys also took possession of his tape recordings that he alleges show price fixing, Stidham said.
Champion filed a lawsuit against Burch in 2006 accusing him of submitting false travel reimbursement requests, a charge he denied.
The Connecticut lawsuit says a Purolator senior executive in June 1999 faxed to his counterpart at Honeywell a letter which announced a 6 percent increase for its filters, effective in August 1999. Purolator did not notify its customers of the price increase until more than two weeks later, in July, attorneys said.
The defendants also had face to face meetings on their contemplated price increases, including one in May 1999 in which they agreed to raise prices on filters, the lawsuit alleges.
In 2004, at a meeting of Champion sales representatives, the company’s president told his sales team of proposed price increase and instructed them to make sure the company’s competitors did the same.
The lawsuit cites an internal company e-mail from 2004 titled “price increases” in which Champion confirmed that the other defendants were “on board” with the amount of a coordinated price increase.
Under an illegal agreement, the defendants implemented similar price increases of 4 to 6 percent for filters in 1999, early 2004 and late 2004 or early 2005, the lawsuit says.
The defendants concealed their conspiracy by claiming the price increases were due to the increase in the price of steel and by citing increases of their competitors, the lawsuit alleges.
AP
Last edited by HarleyCruiser; 06-17-2008 at 06:17 PM.
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