In re Automobile Antitrust Cases I and II

In an antitrust suit claiming car manufacturers conspired to keep their lower priced but otherwise identical cars sold in Canada from being exported to the United States where they could be sold for less than the same models sold for the United States market, summary judgment was properly granted to Ford US  because there was no evidence it had done anything in concert with other manufacturers, but not Ford Canada which had attended meetings with other manufacturers at which consensus was reached on dealing with the export problem.  In an antitrust case, testimony by one former executive of the defendant auto companies testified that at an industry meeting among competitors, he attended, the participants reached no agreement to work together but did reach a consensus that each should take action to keep the cars they sold in Canada from being exported to the United States, where they could be sold for less than the normal US price of similar models.  This decision holds that the executive’s testimony is not hearsay (as it wasn’t offered to prove the truth of anything said at the meeting) but rather admissible lay opinion which summarized in a reasonably specific way his impression likely gained from conduct as well as statements made at the meeting, none of which he still remembered.

Meeting notes of an industry-wide meeting were admissible in evidence under Evid. Code 1221, the adoptive admissions exception to the hearsay rule.  The person who took the minutes sent them in draft form to an executive of the defendant company.  The executive made a few corrections and returned them saying they were “pretty accurate.”  This constituted adoption of the notes’ recitation of what transpired at the meeting. 

The trial court correctly granted Ford US summary judgment in this antitrust suit which accused the defendants of conspiring with other car manufacturers to keep their lower priced but otherwise identical cars sold in Canada from being exported to the United States where they could be sold for less than the same models sold for the United States market.  While the evidence showed that Ford US had ample motive to restrict the export of Canadian cars, it did not show that Ford US had done anything in concert with other manufacturers (as opposed to in concert with its own subsidiary, Ford Canada).  At most, it had merely collected information on steps other manufacturers took to control Canadian exports.  However, the trial court erred in granting Ford Canada summary judgment.  The evidence showed that its executives had attended an industry meeting at which the problem was addressed, various means of restricting exports were discussed, and a consensus was reached that the participants would each individually pursue one or more means of restricting exports.  There was no need for a formal agreement or any joint action.  That all manufacturers agreed to restrict exports rather than break ranks and seek to grab the opportunity to increase sales volume by pursuing expanded Canadian export trade was sufficient to offend the antitrust laws.

 California Court of Appeal, First District, Division 4 (Reardon, J.); July 5, 2016; 2016 WL 3640088

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s