GEICO Corp. v. Autoliv, Inc.

• Decision Date: 30 August 2018
• Docket Number: Case No. 16-13189
• Citation: 345 F.Supp.3d 799
• Parties: GEICO CORPORATION, et al., Plaintiffs, v. AUTOLIV, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

345 F.Supp.3d 799

GEICO CORPORATION, et al., Plaintiffs,

v.AUTOLIV, INC., et al., Defendants.

Case No. 16-13189

United States District Court, E.D. Michigan, Southern Division.

Signed August 30, 2018

Dan W. Goldfine, Diane R. Hazel, Frederick J. Baumann, Lewis Roca Rothgerber Christie LLP, Denver, CO, Kelly A. Myers, Rebecca J. Cassell, Myers & Myers PLLC, Howell, MI, for Plaintiffs.

Meredith Jones Kingsley, Peter Kontio, Alston and Bird LLP, Atlanta, GA, Alden Lewis Atkins, Craig P. Seebald, Lindsey R. Vaala, Vinson & Elkins, L.L.P., Washington, DC, Brandon W. Duke, Winston & Strawn LLP, Houston, TX, Eva W. Cole, Jeffrey J. Amato, Jeffrey L. Kessler, Lauren E. Duxstad, Winston & Strawn LLP, Peter L. Simmons, Steven M. Witzel, Fried, Frank, Harris, Shriver & Jacobson, LLP, New York, NY, Jason R. Gourley, Bodman LLP, Detroit, MI, Thomas J. Tallerico, Bodman PLC, Troy, MI, Cody D. Rockey, Dykema Gossett PLLC, Peter M. Falkenstein, Jaffe Raitt Heuer & Weiss, PC, Ann Arbor, MI, Howard B. Iwrey, Bloomfield Hills, MI, Andrew Marovitz, Britt M. Miller, Mayer Brown LLP, Chicago, IL, James Kresta, Jaffe Raitt Heuer & Weiss, Southfield, MI, for Defendants.

OPINION AND ORDER REGARDING DEFENDANTS' COLLECTIVE MOTION TO DISMISS SECOND AMENDED COMPLAINT

MARIANNE O. BATTANI, United States District Judge

I.INTRODUCTION

PlaintiffsGEICO Corporation and a number of affiliated entities (collectively "GEICO") brought this suit on September 2, 2016, asserting federal antitrust and state law claims against fourteen auto parts manufacturers and suppliers arising from alleged conspiracies among the Defendant manufacturers and suppliers to fix prices, rig bids, and allocate the markets for sixteen auto parts.GEICO was a putative member of the proposed liability and settlement classes in a number of the class action suits comprising In re Automotive Parts Antitrust Litigation,No. 12-md-02311.However, GEICO has elected to opt out of the settlement classes certified to date in this multidistrict litigation ("MDL"), and to instead pursue its own claims as, in effect, an indirect purchaser of certain of the auto parts involved in the MDL.

Before the Court is Defendants' collective motion to dismiss GEICO's second amended complaint.Among other grounds for dismissal, Defendants contend (i) that GEICO has alleged an implausible single conspiracy involving sixteen auto parts or, alternatively, has improperly joined sixteen separate conspiracies in a single suit, (ii) that GEICO lacks both Article III and antitrust standing, (iii) that GEICO's claims have been released by virtue of the settlements reached by GEICO's insureds, (iv) that GEICO's claims are barred by the relevant statutes of limitation, and (v) that GEICO's state law claims are subject to dismissal for a number of reasons.

On November 9, 2017, the Court heard oral argument on Defendants' motion.¹For the reasons set forth below, Defendants' motion is GRANTED IN PART and DENIED IN PART , and Plaintiffs are granted leave to file amended pleadings in accordance with the Court's rulings.

II.FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff GEICO offers several forms of insurance coverage, including automobile insurance.It brought this suit under federal antitrust law and the laws of a number of states, alleging that the fourteen Defendant auto part manufacturers and suppliers unlawfully conspired among themselves and with other non-party co-conspirators to fix prices, rig bids, and allocate the markets for sixteen auto parts: air flow meters, alternators, ATF warmers, automotive wire harness systems, electronic throttle bodies, fuel injection systems, high intensity discharge ("HID") ballasts, ignition coils, inverters, motor generators, occupant safety restraint systems, radiators, starters, steering angle sensors, switches, and valve timing control devices.The named Defendants include (i)Autoliv, Inc., and its subsidiaries, Autoliv ASP, Inc., Autoliv B.V. & Co. KG, Autoliv Safety Technology, Inc., and Autoliv Japan Ltd.; (ii)Hitachi Automotive Systems, Ltd.("HIAMS"); (iii)Lear Corporation and an affiliated joint venture, Kyungshin-Lear Sales and Engineering, LLC; (iv)Panasonic Corporation and its subsidiary, Panasonic Corporation of North America; (v)T.RAD Co., Ltd. and its subsidiary, T.RAD North America; and (v)TRW Deutschland Holding GmbH and its affiliate, ZF TRW Automotive Holdings Corporation.

According to GEICO's complaint, each of the sixteen auto parts at issue is installed in new cars as part of the automotive manufacturing process.In particular, original equipment manufacturers ("OEMs") purchase these parts from automotive parts suppliers, including Defendants, by issuing requests for quotes ("RFQs") to the suppliers and selecting winning bidders.These supply arrangements typically last between four and six years.In addition, Defendants and other auto parts suppliers sell the auto parts at issue to automotive repair professionals, who install these parts in automobiles to replace worn out, defective, or damaged parts.

In 2010, authorities in the United States, the European Union, and Japan began investigating a suspected conspiracy among auto part manufacturers and suppliers to engage in anticompetitive cartel conduct.Over time, a number of manufacturing firms and executives have pleaded guilty to conspiracies to fix prices, rig bids, or allocate the market for specific auto parts.The firms that have pleaded guilty and paid criminal fines include five Defendants in this case: Autoliv, Inc., HIAMS, Panasonic Corporation, T.RAD Co. Ltd., and TRW Deutschland Holding GmbH.In addition, the guilty pleas that resulted from this antitrust investigation encompass each of the sixteen auto parts at issue here.

Beginning in 2011, civil antitrust suits were brought in federal district courts throughout the United States on behalf of various classes of plaintiffs who alleged that they were injured as a result of the auto part price-fixing conspiracies revealed in the above-cited government investigations.On February 7, 2012, the United States Judicial Panel on Multidistrict Litigation transferred these actions to the Eastern District of Michigan, and this Court subsequently entered a series of orders to coordinate and consolidate these suits in multidistrict litigation designated as In re Automotive Parts Antitrust Litigation,No. 12-md-02311.Generally speaking, this litigation has been organized into separate class actions for each of the dozens of auto parts that were the subject of alleged price-fixing conspiracies among the suppliers of these parts.

GEICO alleges that it was a putative member of the proposed classes in sixteen of these suits — i.e., the class actions corresponding to the sixteen auto parts identified in the present complaint.In April of 2016, GEICO elected to opt out of the settlement classes certified in these class actions.Instead, it brought the present suit on September 2, 2016, asserting federal antitrust and state law claims similar to those being pursued in the ongoing multidistrict litigation.In support of these claims brought on its own behalf, GEICO alleges that it has been injured by Defendants' alleged conspiracies to fix the prices of the designated sixteen auto parts, by virtue of (i) its own purchase of these auto parts for use in a fleet of vehicles that it owns, and (ii) its reimbursement of insureds and third-partyclaimants for either (a) payments made to repair professionals involving the replacement of these auto parts, or (b) the full value of a vehicle that has been declared a total loss.Defendants now seek the dismissal of GEICO's federal and state law claims on a variety of grounds.

III.STANDARD OF REVIEW

In their present motion, Defendants ask the Court to dismiss GEICO's second amended complaint under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction, and under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted.In addressing Defendants' jurisdictional challenge under the first of these two Rule 12 provisions, the Court"takes the allegations in the complaint as true," inquiring whether these allegations establish a basis for the exercise of subject matter jurisdiction.Gentek Building Products, Inc. v. Sherwin-Williams Co.,491 F.3d 320, 330(6th Cir.2007).Yet, "conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice" to withstand a properly supported Rule 12(b)(1) motion to dismiss.O'Bryan v. Holy See,556 F.3d 361, 376(6th Cir.2009)(internal quotation marks and citation omitted).

Similarly, when determining whether GEICO's claims are subject to dismissal under Rule 12(b)(6) for failure to state a claim, the Court must construe the complaint in a light most favorable to Plaintiff and accept all well-pleaded factual allegations as true.League of United Latin American Citizens v. Bredesen , 500 F.3d 523, 527(6th Cir.2007).Again, however, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions."Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868(2009).

Moreover, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do."Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929(2007)(internal quotation marks, alteration, and citations omitted).Rather, to withstand a motion to dismiss, the complaint's factual allegations, accepted as true, "must be enough to raise a right to relief above the speculative level," and to "state a claim to relief that is plausible on its face."Twombly , 550 U.S. at 555, 570, 127 S.Ct. at 1965, 1974."A claim has facial...