Antitrust Lawsuits Potentially Headed for Multi-District Litigation

Antitrust Lawsuits Potentially Headed for Multi-District Litigation

January 8, 2018 — Eight of the 10 antitrust-related lawsuits filed against Reynolds and Reynolds and/or CDK Global in 2017 may be headed to multi-district litigation (MDL) this year. The cases include five dealer class action lawsuits that were filed the final two months of 2017 and three of the five third-party vendor lawsuits that have been filed since February 2017.

The lawsuits stem from allegations that the two dealership management system (DMS) giants have used an “unlawful” agreement in 2015 to force out companies providing independent data integration services to vendors and dealers.

As a result, the lawsuits claim dealers and third-party vendors are paying significantly more to access the data housed on Reynolds’ and CDK’s technology platforms. Combined, the firms control about 75% of the DMS market in the automotive retail space.

(For TBR’s complete coverage and analysis of the antitrust lawsuits, Click Here).

The MDL classification is a special civil procedure designed to streamline cases by consolidating pre-trial activity such as the discovery process, depositions and other court-related motions in civil cases involving similar issues and parties into one court. Once the pre-trial activity is completed, the cases then return to their original courts.

A Judicial Panel on Multi-District Litigation (JPML) is scheduled to hear arguments on January 25, 2018 (MDL number 2817) in Miami to determine whether to designate the eight cases as MDL cases and which court to assign them to if classified as MDL. As of now, the defendants and plaintiffs have agreed that an MDL classification makes sense. But they disagree which court should hear the cases.

According to motions filed with the JPML, Reynolds and CDK argue the MDL should be assigned to the Northern District in Illinois court. The plaintiffs argue the case should be assigned to the Western District court in Wisconsin because at least three of the lawsuits have been filed there and the court is familiar with the issues due to the amount of activity that’s already happened with Authenticom’s lawsuit against both CDK and Reynolds. If the JPML does not designate the Western District in Wisconsin as the court, the plaintiffs say they oppose centralization of the cases.

Below is an update on the 10 lawsuits:

DEALERSHIP CLASS ACTION LAWSUITS

  1. Teterboro Chrysler Dodge Jeep Ram v. CDK Global and Reynolds and Reynolds — District New Jersey (Case number: 2:17-cv-08714). Filed October 19, 2017
  2. Hartley Buick GMC v. CDK Global and Reynolds and Reynolds — Northern District Illinois (Case number: 1:17-cv-07827). Filed October 31, 2017
  3. John O’Neil/Johnson Toyota v. CDK Global (Reynolds and Reynolds mentioned as being a co-conspirator) — Southern District Mississippi (Case number: 3:17-cv-00888). Filed November 3, 2017
  4. Hoover Dodge Chrysler Jeep v. CDK Global and Reynolds and Reynolds — Western District Wisconsin (Case number: 3:17-cv-00864). Filed November 14, 2017
  5. JCF Autos LLC (Stevens Jersey City Ford), 440 Jericho Turnpike Sales LLC (Ford, Lincoln of Smithtown), Patchogue 112 Motors LLC (Stevens 112 Ford) v. CDK Global and Reynolds and Reynolds — District Court New Jersey (Case number: 2:17-cv-11975). Filed November 22, 2017
THIRD PARTY VENDOR LAWSUITS
  1. Motor Vehicle Software Corporation v. CDK Global, Reynolds and Reynolds and Computer Vehicle Registration (a CDK and Reynolds-owned company) — Central District California (Case number: 2:17-cv-00896). Filed in February 2017, amended complaint filed May 1, 2017
  2. Authenticom v. CDK Global and Reynolds and Reynolds — Western District Wisconsin (Case number: Case No. 17-cv-318). Filed May 1, 2017. Authenticom sought, and was a awarded a temporary injunction allowing it to access data in the Reynolds and CDK platforms in August. An appeals court later overturned the injunction. The case now is in the discovery and deposition phase and is scheduled for trial in October 2018.
  3. Cox Automotive and subsidiaries v. CDK Global (Reynolds and Reynolds is mentioned as being a co-conspirator) — Western District Wisconsin (Case number: 3:17-cv-00925). Filed December 11, 2017.
  4. Superior Integrated Systems and its subsidiary Darwin’s v. Reynolds and Reynolds — Southern District Florida (Case number: 9:17-cv-80961). Filed August 18, 2017. The case is scheduled for arbitration on January 26, 2018 in Aventura, FL.
  5. CRMSuite settled its lawsuit against CDK Global on November 20, 2017 — Middle District Florida (Case number: 8:17-cv-1883). Look for an announcement in the near future regarding a partnership between CRMSuite and another larger vendor. CRMSuite is part of IMagicLab owned by Keith Latman.

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