27 Jan 2019 Cases

Direct Purchaser Plaintiffs’ Motion for Class Certification Denied in Automotive and Industrial Bearing Price Fixing Litigation

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Compass Lexecon Expert Testifies Successfully for Defendants

Plaintiffs in In re: Bearings Cases (part of In re Automotive Parts Antitrust Litigation) alleged that manufacturers of steel ball and roller bearings for automotive and industrial use conspired to elevate their prices. Compass Lexecon expert Professor Robert Willig was retained by Defendants to assess economic issues relevant to whether a class consisting of all direct purchasers of such bearings should be certified.

Judge Marianne O. Battani of the United States District Court for the Eastern District of Michigan denied direct purchaser Plaintiffs’ motion for class certification in this litigation. This is the first class certification ruling in the many ongoing class actions related to the alleged price fixing of auto parts. Judge Battani ruled that the named plaintiffs differed from large portions of the class in both size and how their prices were set and that, as a result, Plaintiffs failed to satisfy the “typicality” and “adequacy” requirements for class certification under Rule 23(a). She also ruled that Plaintiffs failed to demonstrate that questions of common evidence and methods predominate over individual ones because their expert’s damages model did not distinguish between the various mechanisms of alleged price fixing.

Professor Willig marshalled evidence and performed analyses that were relied upon by Defendants’ counsel in persuasively making the arguments on which Judge Battani based her ruling. In particular, Professor Willig showed that the named plaintiffs (which are small distributors of industrial aftermarket bearings) differed materially from other members of the proposed class (such as automotive OEMs) in the types of bearings they purchased, the mechanisms through which such purchases were made, and the prices they paid. Professor Willig also testified that Plaintiffs’ expert’s damages model estimated a single overcharge for all transactions and applied that overcharge to all customers in spite of the heterogeneity across customer size, products purchased, purchasing mechanisms, and the conduct to which they were allegedly subjected.

Professor Willig was supported by a team led by Dr. Jith Jayaratne in Compass Lexecon’s Oakland office that included Dr. Maya Meidan, Dr. Chris Cavanagh, Ani Gupta, Todd Bettisworth, Kelvin Huang, Ian Todd, Kiana Ocean, Doug Schwartz and Nathan Hyatt.

Professor Willig was retained by counsel for a joint defense group and worked closely with teams from Cleary Gottlieb Steen & Hamilton LLP, Lane Powell PC, Reed Smith LLP and Winston & Strawn LLP.

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