Filed in two Federal District Courts, Eastern Pennsylvania (Philadelphia) and New Jersey, the suits all seek class action status and claim that the various paint companies conspired to charge artificially inflated prices for refinishing products. The lawsuits ask monetary damages as well as a court injunction barring collusion.
Prominent California shop sues
Autobody by Caldwell Inc., of Laguna Hills, California is the plaintiff in one of the suits, filed in U.S. District Court for New Jersey, a state in which the five defendants, PPG, Sherwin-Williams, DuPont, BASF and Akzo Nobel all have offices. These paint makers have all acknowledged the Justice Department investigation and all have denied any wrongdoing.
The suit filed on behalf of Autobody by Caldwell has drawn the most media attention because the business is owned by Jack and Kevin Caldwell, father and son, both industry leaders and former chairmen of NACE as well as directors of the Automotive Service Association (ASA). Kevin Caldwell is also very active in the Collision Industry Conference and in CIECA, the electronic commerce group.
Caldwell noted that he has bought paint both direct and through a paint jobber, and that he would prefer to deal through a local jobber because he receives a higher level of service, "but the direct price is usually lower and we have to compete with consolidators and other large operations that buy direct."
The paint market in the United States, which various sources estimate at $1.8 - $2.5 billion in annual sales, breaks down roughly as follows: DuPont Performance Coatings (DuPont, Spies Hecker and Standox brands), 32%; PPG, including ICI AutoColor, 29%; Sherwin-Williams, 18%; BASF, 12%; Akzo Nobel 7%; others, 2%.
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| Loftus |
When Sheila Loftus, editor of Hammer & Dolly in Washington, D.C. wrote last March that "a source told Hammer and Dolly that allegedly the paint companies agreed to fix prices during a meeting in Europe five years ago" she had no idea that the Justice Department would end up looking into the matter or that it would lead to over 30 lawsuits for price-fixing being filed against the major paint manufacturers by body shops and paint distributors. Loftus said that she never spoke directly to anyone with actual knowledge of the alleged 1993 meeting and that while her source was reliable the information was, in fact, hearsay (second hand). She therefore finds it incredible that some attorneys are citing her article in their lawsuits.
One high-visibility plaintiff, Jack and Kevin Caldwell of Autobody by Caldwell in Laguna Hills, California has instructed its attorney to withdraw the complaint. "Dad and I decided on the plane after I-CAR in Baltimore that this was getting out of hand and that we would decline to be part of it," Kevin Caldwell said.