Mercedes-Benz, Car Dealers May be Sued for Fixing Lease Prices

By Bob Van Voris, April 14 (Bloomberg)

Mercedes-Benz USA and a group of New York-area Mercedes dealers may be sued for price-fixing by consumers who leased cars from 1992 to 1999, a federal judge in New Jersey ruled.

U.S. District Judge William H. Walls said in a decision released yesterday that he'll permit lessees to sue over claims that Mercedes-Benz USA, a unit of DaimlerChrysler AG; a group of Mercedes-Benz dealers in New York, New Jersey and Connecticut, as well as accountant Sheft Kahn & Co. conspired to fix prices.

``Here there is evidence to demonstrate that the prices paid by leasing customers were inflated as a result of a conspiracy to fix the purchase prices of new Mercedes-Benz vehicles,'' Walls wrote in the decision.  The ruling, which a lawyer for the consumers says is the first of its kind, means that lessees will be included in a class action suit filed in 1999 on behalf of tens of thousands of people who bought or leased Mercedes-Benz cars from 25 New York-area dealerships in the 1990s.

``We believe that this is the first published decision to directly address whether persons who lease, rather than purchase, a product can sue for injury as a result of conduct which violates the federal antitrust laws,'' R. Joseph Barton of Washington's Cohen, Milstein, Hausfeld & Toll said in a statement. Barton represents the lessees.  Mercedes-Benz and the other defendants had claimed that the lessees could not sue under U.S. antitrust laws because they were not direct purchasers, an argument that Walls rejected.

                       `Flies in the Face'

``The decision flies in the face of prior precedent,'' said Mercedes-Benz USA spokeswoman Donna Boland.  The decision is procedural and does not reflect on the merits of the case, Boland said. Mercedes-Benz did nothing wrong and is confident the case will be resolved in its favor, she said.

James Serota, who represents eight of the dealerships, declined to comment on the decision.  John H. Eickemeyer, a lawyer for Sheft Kahn, did not return a voicemail message seeking comment.

In 2003, five of the dealers agreed to pay $4.7 million to settle the claims after a different federal judge decided the case could proceed as a class action.  The case is: In Re Mercedes-Benz Anti-Trust Litigation, 99-4311, U.S. District Court, New Jersey.