Recently, a US District Court awarded a woman more than $15 million in damages following a motorcycle accident involving a blown-out Goodyear Dunlop motorcycle tire. The plaintiff was Trish McCloud, who sustained injuries while riding her motorcycle. The lawsuit was filed in the Central District of Illinois – Peoria County. Goodyear disputed McCloud’s claim that the accident was caused by an underinflated tire or overloading.
Nichols offers discounts on Dunlop tires
A recent investigation reveals that motorcycle tire distributors like Nichols sometimes offer customers discounts of 20 percent or more on the Dunlop brand. Dunlop terminated its distributorship with Nichols on June 15, 1993, after 30 years of partnership. According to Dunlop’s Robin Mitchell, Nichols was terminated because of its price discounting. It provided invoices from Tucker/Rocky proving that Nichols was selling Dunlop motorcycle tires for less than retail price. In addition, Dunlop terminated its distribution deal with P.J. Cycle, which was delinquent on its payment obligations and filed for bankruptcy.
The lawsuit alleges that Dunlop gave a discount to distributors to attract new customers. While Nichols is not a distributor of motorcycle tires, its competitors have also received discounts from Dunlop to promote their Southern California facility. As such, Nichols’ competitors have a good reason to be skeptical of the suit. Nevertheless, these discounts should be considered a good incentive to purchase Dunlop motorcycle tires.
Nichols’ agreement with Dunlop is a vertical conspiracy
The Court finds that Nichols’ agreement with Dunlop to raise dealer resale prices and terminate Nichols was not a horizontal conspiracy. While the Gregg Letter raises conflicting inferences regarding price-fixing and concerted action, Nichols’ agreement with Dunlop was not a vertical conspiracy, and the plaintiff’s theory of liability is not supported by any evidence.
In the first instance, Tucker/Rocky had complained to Dunlop about the prices of the tires. They stated that they were not willing to sell at Nichols’ prices. Moreover, they complained about Dunlop’s expansion and claimed that they would be able to capture increased market share when Nichols was out of the picture. Although this evidence is not conclusive, they provide a significant opportunity for conspiracy, if Dunlop had indeed cheated.
Nichols’ expert’s calculations accurately approximate a violation-free state of affairs
In the present case, we consider Count VII of Nichols’ complaint, which challenges Nichols’ claims of price discrimination. This claim alleges that Nichols and Dunlop agreed to fix the price of motorcycle tires for the benefit of the former and denied that the latter sold the tires for less. The Robinson-Patman Act prohibits price discrimination. The Robinson-Patman Act, found at 15 U.S.C. SS 13(f), requires Tucker/Rocky to prove that Dunlop’s price was significantly lower than Nichols’.
As to the first issue, Nichols’ expert’s calculations for a violation-free state of affairs for the Dunlop motorcycle tire lawsuit are inexact. Because Dunlop’s decision to terminate its distributors had a variety of economic justifications, we must conclude that Dunlop’s actions constituted a voluntary decision to engage in anticompetitive behavior.
Nichols’ expert testimony
Nichols’ expert testimony in the Dunlop motorcycle tire lawsuit is largely based on information provided by the defendant. According to the trial judge, the expert’s testimony is not admissible because he has no basis to support it. For example, the expert’s testimony that Nichols was obligated to purchase a warehouse in Phoenix from Dunlop is hearsay. Moreover, Nichols did not disclose his plan to acquire the Phoenix warehouse until it was too late.
The central question in Nichols’ expert’s testimony in the Dunlop motorcycle tire lawsuit is whether the defendants agreed to raise the prices of motorcycle tires or to terminate Nichols. The Court concludes that there is no horizontal agreement in this case, even though the plaintiff claims that the defendants discriminated against T/R by raising prices. Therefore, the plaintiff can bring a vertical conspiracy claim against the three defendants and the alleged price fixing.
Summary judgment granted in favor of Dunlop
In the Timms v. Dunlop Motorcycle Tire case, Mr. and Mrs. Timm were injured in a motorcycle crash. Both motorcycle manufacturers, Harley-Davidson and Goodyear Dunlop moved for summary judgment. Harley-Davidson argues that Timms is not qualified to testify on behalf of the motorcycle tire manufacturer and thus the plaintiff has no case. A Daubert motion will grant summary judgment to Goodyear in this case.
During discovery, the plaintiff did not present any evidence that the tires she bought were defective. This means that summary judgment was appropriate. The plaintiff had not identified specific damages caused by the blowouts, but she did state in her deposition that all blown tires were placed into a trailer to be stored. Ultimately, the plaintiff could not prove that the defective tires caused her damages. Ultimately, the court granted summary judgment in favor of Dunlop Motorcycle Tire.