General Motors Corp. and six other automakers were successful in reversing a ruling allowing as many as 13 million U.S. consumers to seek as much as $3 billion on claims they were blocked from buying cars made in Canada. The 1st U.S. Circuit Court of Appeals in Boston reversed class certification in an antitrust lawsuit against the automakers including Ford Motor Co. and Honda Motor Co. The appeals court said a lower court erred when it said consumers could pursue as a group claims that they should be compensated for overcharges that resulted when automakers restricted the availability of lower- priced Canadian-made cars in the U.S.
The appeals court said class status wasn’t warranted because prices paid by car buyers depend on negotiations with dealers and the exchange rate between the Canadian and U.S. dollars, which tipped in favor of the Canadian dollar since the lawsuit was filed in 2003. The court felt that alone eliminates any realistic current threat of injury. The court reversed class certification for consumers seeking an injunction to force carmakers to honor warranties on Canadian cars and sent a ruling establishing group claims for monetary damages back to the lower court for reconsideration.
The automakers said the amount of damages at stake in the case totaled $3 billion for as many as 13 million consumers. The original lawsuits, filed in San Francisco and Chicago, claim car companies restrict competition by penalizing Canadian dealers who sell to American importers and by refusing to honor warranties on the vehicles. This was clearly a major win for the automakers.
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