Cliff Banks - The Banks Report

Dealer Files Class Action Lawsuit Against DMS Vendors

October 20, 2017 — Teterboro Chrysler Dodge Jeep Ram filed a class action lawsuit yesterday against Reynolds and Reynolds and CDK Global alleging various antitrust violations. The case was filed in United States District Court in the New Jersey District.

Teterboro, who is a Reynolds and Reynolds client, alleges the two companies during the period from January 1, 2011 to now allocated market share, reduced competition, fixed and raised prices paid for dealer management system services along with doing the same in the data and extraction and services secondary market. Leonard Bellavia from Bellavia, Blatt & Crossett in New York is representing the plaintiff.

The Banks Report has predicted several times this year that a dealer class-action was in the works following the earlier lawsuits filed by MVSC, Authenticom, SIS (against Reynolds and Reynolds) and CRMSuite (CDK Global).

Currently, the lawsuit filed by Authenticom is awaiting a ruling from the Seventh District Court of Appeals in Chicago, to determine whether an injunction issued by the Western District in Wisconsin granting access to Authenticom to the CDK and Reynolds’ systems will be allowed to move forward.

The Federal Trade Commission also opened an investigation a couple of months ago into a potentially illegal 2015 contract Reynolds and CDK signed regarding data integration practices. Numerous vendors impacted by the contract have received subpoenas from the FTC in recent weeks. Dealerships using Reynolds or CDK also are expected to receive subpoenas regarding the practices of the two DMS vendors.

The case number for the class action lawsuit is: 2:17-cv-08714.

TBR will continue to report on developments from the lawsuits. Meanwhile, for more in-depth analysis of the data integration lawsuits, click HERE.


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