Consumer Wrath After Hitachi Pleads Guilty
(CN) - Days after pleading guilty to price-fixing and agreeing to pay a $195 million criminal fine, Hitachi Automotive was hit with a federal consumer class action.
Ifeoma Adams and 51 others sued Hitachi Automotive Systems, Hitachi Automotive Systems America, Denso Corporation and Denso International America in Detroit.
The consumers accuse Hitachi and Denso of "engaging in a long-running conspiracy to unlawfully fix, artificially raise, maintain and/or stabilize prices, rig bids for, and allocate the market and customers in the United States for air flow meters."
An air flow meter is an automotive part that measures the volume of air flowing into a car's engine, which determines how much fuel is needed to inject into the engine's cylinders.
Last week, Hitachi and eight other Japanese auto parts companies pleaded guilty to criminal conspiracy, and agreed to pay a total of $740 million in fines for inflating the costs on more than $5 billion worth of automotive parts, including air flow meters, the Department of Justice announced last week.
The price-fixed automobile parts were sold to Chrysler, Ford and General Motors, as well as U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Toyota and Subaru.
Hitiachi itself will pay a $195 million fine for its role in the conspiracy.
"The automotive parts investigation is the largest criminal investigation the Antitrust Division has ever pursued, both in terms of its scope and the potential volume of commerce affected by the alleged illegal conduct," the class says. "The ongoing cartel investigation of price-fixing and bid-rigging in the automotive parts industry has yielded more than $1.6 billion in criminal fines, already surpassing the total amount in criminal fines obtained by the DOJ's Antitrust Division for all of last fiscal year."
The Justice Department has also said there is "no doubt" that consumers were hurt financially, the complaint says.
"Plaintiffs and the members of the classes have sustained injury to their businesses or property, having paid higher prices for air flow meters than they would have paid in the absence of the defendants' and their co-conspirators' illegal contract, combination, or conspiracy, and, as a result, have suffered damages in an amount presently undetermined," according to the suit. "This is an antitrust injury of the type that the antitrust laws were meant to punish and prevent."
The plaintiffs say their claims are not untimely because they had no way of discovering the conspiracy until the Justice Department announced Hitachi's anticipated guilty plea.
They seek damages as well as restitution for violation of anti-trust laws.
The class is represented by Powell Miller with the Miller Law Firm in Rochester, Mich.
Canadian consumers filed suit over the price-fixing in July.