By Jeffrey May, J.D.
The federal district court in Cincinnati yesterday sentenced Hitachi Automotive Systems, Ltd. for its role in a conspiracy to fix the price of automotive shock absorbers. While the company had agreed to plead guilty and pay a $55.48 million fine, there was a dispute over whether it should be sentenced to probation. The court imposed the $55.4 million fine and sentenced Hitachi Automotive Systems to a term of probation of 18 months (U.S. v. Hitachi Automotive Systems, Ltd., Criminal No. 1:16-CR-00078).
In August 2016, the government filed a one-count criminal information charging the company with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate markets of, rig bids for, and to fix the prices of shock absorbers sold to Suzuki Motor Corporation and Toyota Motor Corporation. At that time, a plea agreement was announced. Hitachi had earlier pleaded guilty in 2013 and paid a $195 million fine for fixing the prices of starters, alternators, and other electrical automotive parts. Probation was not imposed when judgment was entered in 2013.
In calling for probation in the shock absorber case, the Justice Department identified in its sentencing memorandum Hitachi's earlier guilty plea in the auto parts investigation. It also suggested that Hitachi's compliance program was new. The government contended that, when confronted with allegations of violations of the antitrust laws relating to shock absorbers, the company’s response was slow. The company purportedly failed to cooperate in the government’s investigation until after one of its co-conspirators pleaded guilty in 2015. Probation was intended to ensure that the company remained focused on implementing a robust compliance program.
Hitachi Automotive Systems unsuccessfully argued to the court that probation was not a necessary sanction because it had an effective compliance and ethics program. The company also argued that its program was not new but instead had been enhanced. Hitachi also argued that the company culture had changed. Lastly, Hitachi argued that probation was a rare sanction in antitrust cases and that imposing it would create an "unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct." Apparently, the court disagreed.
Attorneys: Carla M. Stern for Department of Justice. Matthew J. Jacobs, Craig P. Seebald, Katherine C. Kim, and Brian D. Schnapp (Vinson & Elkins LLP) and Jeffrey R. Teeters (Wood Lamping LLP) for Hitachi Automotive Systems, Ltd.
Companies: Hitachi Automotive Systems, Ltd.
MainStory: TopStory Antitrust AntitrustDivisionNews
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