A squadron of top litigators has descended on Wilmington, Del., ready to duke it out over claims that truck components manufacturer Eaton Corp. owes billions of dollars in damages to rival Meritor Inc.
A damages-only trial kicks off on June 23 in an antitrust case Meritor has been pressing against Eaton since 2006. In 2009 a different jury returned a verdict that Eaton negotiated anticompetitive supply contracts with customers in order to preserve a near-monopoly on truck transmission sales. Meritor is seeking $800 million in the latest phase of the case, which works out to $2.4 billion after automatic trebling of damages.
U.S. District Judge Sue Robinson’s courtroom will likely be overflowing with lawyers. A trio of big firms—Winston & Strawn, Latham & Watkins and Baker Botts—are jointly defending Eaton. The defense team includes Dan Webb, Winston & Strawn’s chairman, and Latham partner Al Pfeiffer Jr., who cochairs that firm’s antitrust group. Meritor has plenty of muscle of its own, including Joseph Schoell of Drinker Biddle & Reath, Jay Fastow of Ballard Spahr, Jennifer Hackett of Dickstein Shapiro and R. Bruce Holcomb of Adams Holcomb.
Eaton has dominated the market for truck transmissions since the 1950s. In hopes of busting its monopoly, Meritor began selling transmissions in 1989. Within a decade, Meritor had garnered 17 percent of the combined market for manual and automatic transmissions. But by 2005 Meritor’s market share had fallen into the single digits, and by 2007 it stopped selling transmissions altogether.
Meritor blamed its loss of market share on long-term supply contracts that Eaton negotiated with the top trucking companies—Mack Trucks Inc., AB Volvo, Peterbilt Motors Company—around the turn of the millennium. In a 2006 complaint, Meritor alleged that Eaton’s supply agreements were “de facto exclusive dealing contracts” that illegally stifled competition.
Meritor had the upper hand after the 2009 liability trial. But Robinson ruled in 2011 that Meritor wasn’t entitled to any damages. In September 2012 the U.S. Court of Appeals for the Third Circuit vacated Robinson’s damages ruling and also affirmed the underlying verdict that Eaton broke antitrust law. Eaton hired Theodore Olson of Gibson, Dunn & Crutcher to file a cert petition to the U.S. Supreme Court. The high court declined to hear the case in May 2013.
Earlier this month, Eaton’s lawyers filed a motion urging Robinson to block Meritor’s expert witness from testifying about certain lost profit damages. The motion would have have cut Eaton’s potential liability in half. Robinson denied the motion in a short order issued on Wednesday, though she wrote that Eaton’s lawyers can renew their motion during trial.