In February 2020, FeganScott filed a lawsuit on behalf of the government of Puerto Rico against Hitachi Automotive Systems, DENSO Corporation, and other manufacturers and suppliers of Air Flow Meters for vehicles.
The suit claims that automotive system company, Hitachi, automotive components manufacturer DENSO, and others engaged in an anti-competitive conspiracy to unlawfully control market share of Air Flow Meters, meaning that when purchasing a vehicle, Puerto Rican consumers and governmental agencies paid artificially inflated prices for Air Flow Meters, suffering injury to their business or property.
Air Flow Meters are an integral part of the automotive engine management system and automobile market at large, functioning as a measurement tool for the volume of air flowing into engines. Air Flow Meters are manufactured and sold by Hitachi and DENSO throughout the United States. According to the complaint, these alleged practices had a substantial effect on interstate commerce of the United States, including Puerto Rico.
The suit further alleges that the defendants are violating the Sherman Antitrust Act and the Clayton Act, which prohibit predatory and discriminatory pricing. The suit claims that defendants were able to form and maintain a cartel to further restrict competition due to the high barriers to entry that exist in the Air Flow Meters market, including costly and lengthy start-up costs, required high levels of technology and engineering knowledge, and the fact that defendants own several patents related to the manufacture of Air Flow Meters.
This is not the first time the defendants have faced similar investigations. The Department of Justice Antitrust Division conducted a broad criminal investigation into illegal price-fixing
and bid rigging in the automotive parts industry, the largest criminal investigation the Antitrust Division has ever pursued. In 2013, the DOJ announced that Hitachi Automotive Systems agreed to pay a $195 million criminal fine and to plead guilty to one count of criminal information, charging the company with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry.
However, no information was ever made available to Puerto Rico’s government agencies or consumers that even hinted they were being injured by the Defendants’ unlawful conduct until September 26, 2013, the date that the DOJ publicly announced Defendant Hitachi Automotive Systems, Ltd.’s anticipated guilty plea.
The suit aims to cease the alleged anti-competitive activity altogether, while also seeking reimbursement for the consumers and governmental agencies in Puerto Rico that were impoverished by the unjust enrichment of Hitachi, DENSO, and others.