State Ex Rel. Sachs v. Mid-Atlantic Toyota Distributors, Inc.

605 F. Supp. 440, 1984 U.S. Dist. LEXIS 25006
CourtDistrict Court, D. Maryland
DecidedSeptember 24, 1984
DocketMDL-456. Civ. A. Nos. Y-80-3238, Y-81-650, Y-81-726, Y-81-805, Y-81-1880, Y-82-479, Y-81-806 and Y-81-2954
StatusPublished
Cited by8 cases

This text of 605 F. Supp. 440 (State Ex Rel. Sachs v. Mid-Atlantic Toyota Distributors, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Sachs v. Mid-Atlantic Toyota Distributors, Inc., 605 F. Supp. 440, 1984 U.S. Dist. LEXIS 25006 (D. Md. 1984).

Opinion

MEMORANDUM

JOSEPH H. YOUNG, District Judge.

This multidistrict antitrust litigation involves six parens patriae actions, 15 U.S.C. § 15c, and two private treble damages actions, 15 U.S.C. § 15, which have been consolidated. All parties have reached compromised settlements of the claims, and have submitted their proposals to the Court for determination, required by Fed.R.Civ.P. 23(e) and 15 U.S.C. § 15c(c), as to whether the settlement is fair, reasonable, and adequate. The parties have also filed a joint application for award of counsel fees and costs. At a hearing on July 13, 1984, this court granted final approval of the proposed settlements for the reasons stated herein.

HISTORY OF THE LITIGATION

The states of Maryland, Delaware, West Virginia, and the District of Columbia initiated this action in December, 1980. By September, 1981, the Commonwealths of Pennsylvania and Virginia, as well as the private plaintiffs, had filed suit. All the plaintiffs sued two classes of defendants: Toyota dealers in Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia (“Dealer defendants”); and several entities essentially comprising the single Toyota distributor for the six jurisdictions (“Distributor defendants”). The plaintiffs alleged that all defendants conspired together in violation of § 1 of the Sherman Act, 15 U.S.C. § 1, to force purchasers of certain new 1980 Toyotas to pay more for their cars than they would have paid in the absence of a conspiracy.

Over defendants’ opposition all the actions were transferred to the District of Maryland for pretrial purposes by the Judicial Panel on Multidistrict Litigation. After the transfer, Distributor defendants moved to dismiss many of the actions on the ground that they were brought by, or on behalf of, indirect purchasers barred from financial recovery under Illinois Brick v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). On June 30, 1981, this Court ruled that Illinois Brick did not bar plaintiffs’ claims. In re Mid-Atlantic Toyota Antitrust Litigation, 516 F.Supp. 1287 (D.Md.1981).

Defendants also raised other grounds for dismissal including lack of personal jurisdiction over certain defendants, improper venue, failure to state a claim upon which relief can be granted, failure to comply with Rule 11, and the unconstitutionality of the Hart-Scott-Rodino Antitrust Improvements Act. On October 14, 1981, this Court upheld the constitutional authority of the governmental plaintiffs to pursue these actions but dismissed several defendants on the basis of jurisdiction and venue. The Court also denied the motions to dismiss based on Rule 11, while granting the mo *442 tions to dismiss the Pennsylvania complaint for failure to state a claim for relief to the extent that it was based on a claim for damages under 15 U.S.C. § 14. In re Mid-Atlantic Toyota Antitrust Litigation, 525 F.Supp. 1265 (D.Md.1981). On December 22, 1981, this Court amended its opinion. In re Mid-Atlantic Toyota Antitrust Litigation, 541 F.Supp. 62 (D.Md.1981). At defendants’ request, the issue of parens patriae authority was certified to the Fourth Circuit. That court affirmed the holding that the governmental plaintiffs had authority to pursue these actions. Pennsylvania v. Mid-Atlantic Toyota Distributors, Inc., 704 F.2d 125 (4th Cir.1983).

In the interim, private plaintiffs sought class certification under Fed.R.Civ.P. 23(b)(3). In January, 1982, this Court denied these motions on the grounds that the fee arrangements between the named plaintiffs in the class action and their attorneys violated the ABA Code of Professional Responsibility, while noting that it did not intimate “that there has been or that there will be improprieties on the part of counsel in the instant case.” In re Mid-Atlantic Toyota Antitrust Litigation, 93 F.R.D. 485, 487, 491 n. 9 (D.Md.1982).

Substantial discovery occurred during the winter and spring of 1981-82. Eventually approximately 500,000 documents, selected from transactional records, were organized in a document depository in Baltimore.

On October 29, 1982, this Court heard argument on summary judgment motions filed by defendants raising three principal issues: (1) whether defendants’ conduct would be scrutinized on a per se or rule of reason basis, (2) whether sufficient evidence had been developed to infer that a § 1 “contract, combination or conspiracy” existed among the defendants, and (3) whether plaintiffs had alleged an antitrust injury to the Toyota purchasers. On April 4, 1983, the Court ruled that plaintiffs’ claims would be considered under the per se standard, that sufficient facts regarding conspiratorial activities had been developed, and that purchasers of Toyotas under the Double Value Days Program did not suffer antitrust injury. In re Mid-Atlantic Toyota Antitrust Litigation, 560 F.Supp. 760 (D.Md.1983).

Settlement discussions continued throughout the litigation. On May 27, 1983, this Court preliminarily approved a proposed settlement (“Original Settlement Agreement”) between all plaintiffs and the Distributor defendants. In re Mid-Atlantic Toyota Antitrust Litigation, 564 F.Supp. 1379 (D.Md.1983). Designed to achieve a “global” resolution of this litigation, the Original Settlement Agreement gave each Dealer defendant the option of joining in the settlement. When an insufficient number of Dealer defendants chose to “opt-in,” plaintiffs continued the litigation against the remaining defendants, while engaging in negotiations in a renewed attempt to achieve a global settlement. Plaintiffs eventually concluded settlements with all remaining defendants, and the Court preliminarily approved these settlements on May 9, 1984. In re Mid-Atlantic Toyota Antitrust Litigation, 585 F.Supp. 553 (D.Md.1984). Notice of the proposed settlements was mailed to purchasers on May 11, 1984, and notice by publication was made on May 20-21, 1984. A hearing on final approval of the proposed settlements and the joint fee petition was held on July 13, 1984.

The Court has already provided detailed summaries of the proposed settlements in the litigation, see In re Mid-Atlantic Toyota Antitrust Litigation, 564 F.Supp. 1379, 1382 (D.Md.1983); In re Mid-Atlantic Toyota Antitrust Litigation, 585 F.Supp. 1553 (D.Md.1984), and will presume familiarity with the terms of the proposed settlements.

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605 F. Supp. 440, 1984 U.S. Dist. LEXIS 25006, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-sachs-v-mid-atlantic-toyota-distributors-inc-mdd-1984.