Antitrust Claims Against Ford Canada Revived

SAN FRANCISCO (CN) — Ford once again faces claims that it fixed U.S. car markets by refusing to import cheaper Canadian versions of its vehicles, after a federal judge partially overturned a ruling in the carmaker's favor.

Tuesday's ruling, issued by Judge Timothy Reardon of the California First Appellate District Court of Appeal, held that the San Francisco trial court hearing the case wrongfully granted summary judgment to Ford Canada for its alleged involvement in the purported antitrust scheme.

Reardon wrote that "the trial court excluded vast amounts of potentially highly relevant evidence related to Ford Canada's alleged co-conspirators on hearsay grounds."

The judge also said there is evidence Ford Canada "actually reduced vehicle allocations, provided blacklists of known exporters to its dealers, circulated best practices, imposed chargebacks, and initiated dealer termination proceedings" in response to the importation issue.

Other carmakers had instituted similar measures during the early 2000s to contend with the price differential between similar cars sold in the United States and Canada, Reardon noted.

However, the judge upheld the dismissal of charges involving Ford U.S., finding that consumers had not mounted a strong enough case.

"[T]here is simply no evidence, or even inference, from which a reasonable jury could concluded that Ford U.S. agreed with any other alleged co-conspirator to do something together about the export problem or that it even understood the goals of the alleged conspiracy and actively participated in it," Reardon wrote in the 63-page ruling.

In the underlying 2003 complaint, car purchasers accused Ford and other major automakers of conspiring to prohibit the importation of cheaper, nearly identical cars from Canada into the United States, which allegedly resulted in higher car prices in California.

Apparently, the issue was particularly thorny for Ford when it came to their line of Thunderbirds, which were considered "high-profile, high-margin" cars.

Dozens of those lawsuits were consolidated into a single $1 billion class-action antitrust case, which accused the carmakers of charging California car dealers as much as 30 percent more than they charged Canadian dealers for the same make and model vehicles.

In some cases, the manufacturers allegedly included clauses prohibiting Canadian dealers from exporting their cheaper vehicles.

In the early part of the trial, allegations against overseas carmakers like Honda and Volkswagen were dismissed due to court jurisdiction. General Motors and DaimlerChrysler later evaded the lawsuit because of bankruptcy filings in 2009, though GM's Canadian counterpart settled in 2011.

Ford remained one of the last defendants in the case, and had argued that its U.S. company had not "conspired with anyone in Canada to do anything," court records show.

The trial court agreed, finding in early 2012 that neither Ford U.S. nor Ford Canada had engaged in a price-fixing conspiracy.

The trial court rejected much of the consumers' evidence of a conspiracy, including a deposition from Toyota Canada general counsel Pierre Millette.

Reardon disagreed with that decision Tuesday, finding that Millette's statements—in which he recalled a 2001 meeting during which other automaker executives supported the concept of prohibiting Canadian imports—were merely impressions from a meeting.

"This is not hearsay, and the trial court erred in concluding that it was," Reardon wrote, noting also that Millette's testimony might have "tipped the balance in the plaintiffs' favor."

Reardon similarly wrote that a meeting with other automakers could have been evidence of a conspiracy.

"Agreeing to meet extensively on the sole topic of how best to restrict exports as an industry certainly raises a plausible inference that the alleged co-conspirators had all previously agreed to hold the line together on export sales, were thus willing to explore together in detail the most effective means of implementing that anti-competitive pact," the judge wrote.

In upholding the trial court's summary judgment in favor of Ford U.S., however, Reardon wrote that the consumers' evidence of emails from Ford U.S. executive Bill Glick regarding "industry-wide solutions" to the export issue did not constitute viable evidence of anything more than initial contact with competitors, and not of a consummated conspiracy.

Reardon was joined in the opinion by Judges Ignazio Ruvolo and Maria Rivera.

"We are very pleased with the decision and look forward to vigorously litigating the case and preparing for trial against Ford Canada," said plaintiffs' attorney Craig Corbett of Zelle LLP.

Lead counsel for Ford did not immediately respond to a request for comment Wednesday.

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