Antitrust Lawsuit Trial Begins for Rivals ArvinMeritor, Eaton
By Dan Leone, Staff Reporter
This article appears in the Sept. 21 print edition of Transport Topics. Click here to subscribe today.
Transmission-maker ArvinMeritor Inc. on Sept. 14 had its first day in court with rival Eaton Corp., which ArvinMeritor said has monopolized the North American market for heavy-truck transmissions.
The jury trial is the result of a 2006 antitrust lawsuit brought against Eaton by Meritor Transmission Corp., part of ArvinMeritor, and ZF Meritor, a former joint venture of Meritor and German transmission maker ZF Friedrichshafen AG.
ArvinMeritor, Troy, Mich., alleged in court documents, “Eaton engaged in anticompetitive conduct to thwart Meritor’s transmission sales.”
In its own court filings, Eaton denied those allegations and said it had broken no laws.
“Eaton specifically denies that it has engaged in any conduct in violation of Sections 1 and 2 of the Sherman Act, Section 3 of the Clayton Act, or any other laws cited in [ArvinMeritor’s] complaint,” wrote the manufacturer, which is based in Cleveland.
Neither ArvinMeritor nor Eaton returned Transport Topics’ calls for comment.
ArvinMeritor, Troy, Mich., was “driven out of the market” by Eaton, a lawyer for the company said in his opening statement to a judge and jury in U.S. District Court for Delaware, Bloomberg News reported.
A lawyer for Eaton said the company “developed the best products for the lowest prices,” and called into question the reliability of Meritor transmissions, Bloomberg reported.
The Meritor companies claim Eaton abused its monopoly power to offer North American truck manufacturers volume discounts ZF Meritor could not match — and for which truck makers would not qualify unless they pared back their purchases of Meritor transmissions.
In the same filing, ArvinMeritor said Eaton’s actions harmed consumers by delaying the commercial availability of new transmission technology.
ArvinMeritor is seeking hundreds of millions of dollars in damages from Eaton.
An estimate produced for ArvinMeritor pegged the damage done to the company through Eaton’s alleged anticompetitive acts at more than $800 million, court papers show.
However, that estimate was barred from admission in the trial in an Aug. 20 ruling by District Judge Sue Robinson.
Eaton currently produces, and Meritor produced, both manual and automated transmissions for use in heavy trucks.
Eaton transmissions are standard equipment on a number of models from the major North American truck makers, Daimler AG, Navistar Inc., Paccar Inc., and Volvo AB, which owns Mack Trucks.
ArvinMeritor has exited the heavy-truck transmission business, but it still markets FreedomLine transmissions in North America on behalf of ZF Friedrichshafen.
ArvinMeritor and ZF pulled the plug on their manufacturing joint venture in 2007.
ArvinMeritor and Eaton were trading lawsuits and patent in-fringement claims well before the 2006 antitrust suit went to court last week.
Patent disputes have focused on the technology used in automated truck transmissions.
Most recently, a federal jury in Michigan found transmission designs by ArvinMeritor and ZF Friedrichshafen did not infringe on two Eaton Corp. patents.
The Michigan trial arose from a 2003 lawsuit in which Eaton accused ZF Meritor of using patent-infringing technology in its FreedomLine transmissions. The jury found that Eaton’s patents were void and therefore unenforceable.
After filing the 2003 lawsuit, Eaton sought relief from the U.S. International Trade Commission, the federal agency that investigates patent-infringement claims.
In a 2005 decision, ITC sided with Eaton and barred ZF Meritor from importing FreedomLine transmission components to the United States from Germany.
However, ITC reversed that decision in 2006 after ZF Meritor tweaked the FreedomLine’s design.
Prior to the Michigan trial and the ITC dispute, Eaton won a patent infringement suit against Meritor in the same Delaware district court where the 2006 suit is now being tried.
In 1998, a Delaware jury found that Rockwell International Corp. and Meritor Automotive’s Engine Synchro Shift transmission in-fringed on an Eaton patent.
At the time Eaton filed the suit that led to the 1998 trial, Meritor’s automotive business was still part of the now-defunct Rockwell.
Rockwell spun Meritor off in 1997. Meritor and ZF Friedrichshafen created the ZF Meritor joint venture in 1999, according to ArvinMeritor’s Web site.
In 2000, Meritor Automotive Inc. and Arvin Industries combined to form ArvinMeritor.
Eaton has been in the heavy-truck transmission business since 1958, when it acquired Fuller Manufacturing.
