May 14, 2021
On May 14, 2021, Weil won an important, case-dispositive appellate victory for Bridgestone in a component case of one of the largest multidistrict litigations in recent years, the Auto Parts MDL – antitrust suits relating to 39 different automotive parts, assemblies, or systems, with more than 50 defendants. The Sixth Circuit’s opinion, which unanimously reversed a lower court’s adverse decision, rebuffs an attempt to end-around a negotiated settlement and upholds important contractual principles at the core of settlement agreements.
The specific case involves the sale of anti-vibrational rubber parts. In 2016 and 2017, Bridgestone and each of the manufacturers entered into settlements with a nationwide class of indirect purchasers, paying more than $80 million. Nonetheless, a second group of ordinary consumers who actually purchased indirectly brought another putative nationwide class action, contending that they should be deemed to represent “direct” purchasers notwithstanding that they purchased from an intermediary, because (they alleged) the intermediary was owned or controlled by the manufacturers and their suit thus allegedly fit within the “ownership-or-control exception” to Illinois Brick. Bridgestone moved to enforce the indirect-purchaser settlements, and thus to block the second suit, but the district court denied the motion, agreeing with the plaintiffs and deeming them to be direct purchasers outside the scope of the settlements.
The Sixth Circuit reversed, agreeing with Weil that the settlement agreements “unambiguously bar[red] Plaintiffs from maintaining their alleged direct-purchaser lawsuit.” The court explained that the purchase was “indirect,” as a matter of ordinary meaning, because it was through an intermediary, and “[b]y definition then, it was not direct. It was indirect.” The court also rejected the plaintiffs’ efforts to use the “ownership-or-control” exception to reach a different result, holding: “that plaintiffs might be considered to have standing under Illinois Brick does not alter the reality that they indirectly purchased anti-vibration rubber parts from Defendant Bridgestone Corporation[,]” and “[t]he ownership-or-control exception mentioned in Illinois Brick is ultimately a pragmatic carveout to a federal antitrust standing rule, not a redefinition of indirect purchaser.” Ultimately, the court found that the context and structure of the settlement supported that result, as the settlements included “eight express exclusions from the class-wide releases, none of which references this ownership-or-control exception[,]” and that omission “strongly suggests that Plaintiffs cannot maintain their federal claims.”