DOJ seeks to protect leniency documents in auto parts antitrust class action

Posted on: November 6th, 2013 by Steve Larson
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Antitrust CasesThe United States DOJ on Friday moved to stop plaintiffs suing auto parts manufacturers for price-fixing from seeking materials the defendants turned over to the antitrust division in exchange for leniency in its criminal investigation.  The Antitrust Division, which has already collected more than $1.6 billion in fines from 21 companies as part of its massive investigation of the auto parts industry, moved to intervene in class actions in July in order to stay discovery relating to ongoing probes and to block all discovery relating to the DOJ’s investigation and grand jury proceedings.

Though the parties have since come to terms on most of the discovery issues, the DOJ said Friday that it was concerned that allowing the plaintiffs to seek sensitive information that was either provided to or created for the DOJ by companies and individuals seeking reduced penalties would undermine its successful leniency program.  “Granting plaintiffs the opportunity to obtain this information will provide them with little relevant evidence, while at the same time potentially causing grave harm to the division’s leniency program,” the DOJ wrote. “Regardless of whether this information is sought from the division or from any other source, such discovery would likely have a serious detrimental effect on the division’s ability to efficiently and effectively conduct its criminal investigations.”

The leniency program has proved tremendously successful for the DOJ by giving the first cartel participant to come forward full immunity and granting more limited benefits to other quick-cooperating defendants.

In particular, the auto parts probe, which covers a number of conspiracies related to several different automotive components, is thought to have been driven by the agency’s amnesty-plus program. Under that policy, a company that is too late to win traditional leniency in an investigation can still receive a discount if it alerts the watchdog to a new cartel.

But the DOJ warned Friday that the program could be threatened by the kind of discovery sought by the plaintiffs in the auto parts case, which includes not just statements witnesses made to the division but any statements made to the DOJ.

“As worded, and as plaintiffs have expressly indicated during the negotiations on the stipulation, plaintiffs may seek to discover information relating to plea discussions between the division and defendants that may have been participating in the leniency program,” the DOJ said. “Both the federal criminal and civil rules of procedure recognize that it is essential that information and statements relating to plea discussions remain confidential in order to facilitate the resolution of criminal and civil claims.”

Plaintiffs also want to use discovery to pursue statements made by defense counsel during cooperation with the agency, according to the DOJ’s file.

Plaintiffs are seeking the materials from the defendants and others, rather than from the DOJ itself.  However, the agency believes that the fact that plaintiffs could seek this kind of information at all might make companies reluctant to hand over information during criminal investigations to keep plaintiffs from seeking that data in follow-on litigation.

The case is In re: Automotive Parts Antitrust Litigation, case number 2:12-md-02311, in the U.S. District Court for the Eastern District of Michigan.