Auto Dealer System Antitrust Suits Now Under One Roof

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By Eleanor Tyler

The two companies that make software used by U.S. auto dealers to manage sales and service of millions of vehicles will face antitrust claims in a single courtroom in Chicago instead of in multiple courts around the country.

The suits all involve the same core antitrust allegations. The plaintiffs contend that CDK Global LLC and Reynolds & Reynolds Co. have monopolized access to the information in car dealer management systems to benefit their own related businesses, like digital car registration and title services, to the detriment of rivals.

The questions in the consolidated suit could resonate in other industries besides those that use the auto dealer software, known as Dealership Management System (DMS). Who has access to these types of closed platforms and systems, and how the data can be used and resold, is widely disputed in a number of industries.

The most advanced of the pending cases over DMS has already seen one appeal to the U.S. Court of Appeals for the Seventh Circuit on whether a rival dealer services company should be able to access the defendants’ software systems.

One Judge

The U.S. Judicial Panel on Multidistrict Litigation Feb. 1 drew together suits filed in California, Mississippi, New Jersey, Illinois, and Wisconsin into one multidistrict case (MDL) before Judge Amy St. Eve in the U.S. District Court for the Northern District of Illinois. St. Eve will preside over the important questions that are common in all the cases, and then they will be returned to their original jurisdictions for trial.

The Judicial Panel consolidates disputes about the same set of facts, usually against the same or similar defendants, to save resources for courts and litigants. Typically a defendant requests consolidation rather than fighting similar lawsuits in far flung jurisdictions.

The DMS systems themselves are proprietary to CDK and Reynolds, but each dealership owns the data that it keeps on the system. The plaintiffs say other dealership vendors, like title service providers, have been denied information on which their businesses depend and forced out of the market. Some lawsuits also allege this is a conspiracy between CDK and Reynolds to seal off their systems to competitors.

The panel chose St. Eve, who doesn’t currently preside over any of the cases, as an “able and experienced jurist who has skillfully handled a number of other MDLs,” according to the order. The defendants requested another judge in St. Eve’s district, Samuel Der-Yeghiayan, who already is assigned to handle one of the pending cases.

According to Bloomberg Law’s Litigation Analytics, St. Eve has a solid record on appeal. In her 15 years on the bench, she’s been affirmed on a broad range of legal appeals 78.7 percent of the time. She has been fully reversed in only 14 appellate cases.

The case In re Dealer Management Systems Antitrust Litigation, 18-MD-2817 (2/1/18).

To contact the reporter on this story: Eleanor Tyler in Washington at etyler@bloomberglaw.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com

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