Jury finds Eaton violated antitrust laws

The contentious legal battle between Eaton Corp. and ArvinMeritor took another turn yesterday when a Delaware jury ruled that Eaton violated U.S. antitrust laws in its marketing of truck transmissions

The contentious legal battle between Eaton Corp. and ArvinMeritor took another turn yesterday when a Delaware jury ruled that Eaton violated U.S. antitrust laws in its marketing of truck transmissions.

The decision, which an Eaton spokesperson said the company will appeal, was in response to an October 2006 filing by ZF Meritor LLC, a joint venture between ArvinMeritor, Germany’s ZF Friedrichshafen AG and Meritor Transmission Corp., an ArvinMeritor company. The suit claimed that Eaton was acting in an anticompetitive manner in the heavy-duty truck transmission market.

“Eaton is disappointed with the decision in U.S. District Court today in Wilmington, DE, in this first phase of the suit filed by ZF Meritor LLC and Meritor Transmission Corp.,” Eaton said in a statement released to Fleet Owner. “The court has made no ruling on any allowable damages at this stage of the litigation. We intend to appeal the ruling and are reviewing all our options. It is inappropriate for us to comment any further at this point.”

Yesterday’s ruling, if it stands, would send the suit into the next stage which would determine damages. According to a Bloomberg News report, damages could be as high as $800 million. However, ArvinMeritor’s Mike Pennington, senior director of global marketing communications & industry relations, told Fleet Owner that the company could not comment on any dollar figure, but that any damages awarded would be for lost revenue.

“The customers told us when we started the transmission business they wanted us to give them a choice,” Pennington said, echoing the basis of the arguments he said were made by ArvinMeritor’s attorney that Eaton’s practices prevented that from happening.

In 1999, ArvinMeritor and ZF Friedrichshafen formed ZF Meritor LLC. The firm lasted until 2003 when it was forced to cease operations due to a lack of business, Pennington said. The suit claims Eaton’s conduct was what prevented ZF Meritor from becoming a lasting entity.

“The legal matters going on between the two companies have been going on for a while,” Pennington said. A number of patent infringement cases, all related to transmissions, he noted, have been filed by both companies.

“We are elated that the jury recognized Eaton’s wrongful conduct in violation of antitrust laws that harmed competition in the markets for heavy-duty truck transmissions, forced us to exit the NAFTA line-haul transmission business and led to the demise of our joint venture with ZF Industries,” ArvinMeritor chairman & CEO Chip McClure said in a statement.

Phone messages left for Eaton attorney Robert Ruyak and ArvinMeritor attorney Jay N. Fastow were not returned.

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