Class Action Lawsuit Alleges Eaton-Truck Maker Conspiracy

A class action lawsuit accuses truck makers of conspiring with Eaton to help Eaton maintain a monopoly in the Class 8 truck transmission market, forcing up the price of trucks containing Eaton transmissions.

On Oct. 4, the New York-based plaintiff's law firm Murray, Frank & Sailer LLP filed a class action complaint in the U.S. Court for the District of Kansas on behalf of a nationwide class of Class 8 truck purchasers who indirectly bought Eaton transmissions by purchasing Class 8 trucks from October 2002 to the present.

The suit alleges that Eaton cut deals with truck makers to cut other transmission makers out of the market, especially ZF Meritor, which was forced out of the market. ZF Meritor is a joint venture of ArvinMeritor and ZF Friedrichshafen AG formed in 1999. Although ZF Meritor still exists as a legal entity, ArvinMeritor said it was forced to stop selling transmissions because of Eaton's actions.

Because of this, the suit claims, truck buyers paid more than they would have if there had been serious competition.

Named in the suit are Eaton Corp., Daimler Trucks North America LLC, Freightliner LLC, Navistar International Corp., International Truck and Engine Corp., Paccar Inc., Kenworth Truck Co., Peterbilt Motors Co., Volvo Trucks North America and Mack Trucks Inc. The plaintiffs are Ryan Avenarius and Rodney E. Jaeger.

One More Chapter

This suit is the latest in the ongoing legal battle between Eaton and ArvinMeritor over this issue.

Four years ago, ZF Meritor and Meritor Transmission Corp. filed an antitrust lawsuit against Eaton, accusing its competitor of engaging in anticompetitive conduct.

The lawsuit alleged that Eaton offered truck manufacturers "lucrative rebates and share penetration incentives" in an attempt to divert purchasers of ZF Meritor transmissions to Eaton transmissions. It also claimed that Eaton threatened one or more OEMs with price retaliation if they purchased ZF Meritor transmissions and that it required truck manufacturers to exclude ZF Meritor transmissions from their sale materials and/or penalize customers with higher prices or other punitive measures if they specified ZF Meritor transmissions.

The end result, according to the lawsuit, was to harm competition in the markets by "limiting consumer choice, eliminating competitive checks in pricing and suppressing innovation."

A year ago, a jury determined that Eaton's exclusivity agreements with the OEMs "constituted a contract, combination, or conspiracy that unreasonably restrained trade," the complaint notes, in the case ZF Meritor LLC and Meritor Transmission Corporation v. Eaton Corporation. (See "ArvinMeritor Prevails in Eaton Antitrust Suit," 10/9/2009)

Eaton Responds

Eaton issued the following statement in response to this new lawsuit:

"We are aware of the lawsuit that has been filed recently in Kansas Federal court. We believe that the claims in this suit are meritless and we will vigorously defend the company against these claims. Eaton remains committed to providing industry-leading technologies, and to protecting the investments made for the long-term success of its businesses."

You can read the entire complaint here.