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Dealers Want Final OK On Reynolds’ $29.5M Antitrust Deal


Law360 (December 20, 2018, 4:59 PM EST) — Auto dealerships asked an Illinois federal judge on Wednesday to definitively sign off on their $29.5 million deal that would jettison Reynolds and Reynolds Co. from their class action alleging the auto software company conspired with another industry giant to monopolize the dealer data market.

After receiving the initial green light last month, the car dealers asked the judge Wednesday for his final seal of approval on the deal settling their claims that Reynolds and CDK Global LLCstruck an agreement three years ago to dominate the auto software data distribution chain, eliminating competitors and middlemen, and sending prices sky-high.

The deal came about after “hard-fought, arm’s-length negotiations,” including intensive talks and one 12-hour mediation, the dealers said, and allows them to focus on their claims against CDK, which has not yet settled.

“The settlement with Reynolds allows dealership plaintiffs to focus on litigating against — and potentially facilitating a future settlement with — remaining defendant CDK,” they said.

An attorney for the dealers, Peggy Wedgworth of Milberg Tadler Phillips Grossman LLP, said they don’t plan to let up on the other auto software giant.

“We continue to vigorously pursue claims against the remaining defendant, CDK,” Wedgworth told Law360 on Thursday.

Counsel and representatives for Reynolds and CDK did not immediately respond to requests for comment on Thursday.

Class counsel have yet to ask for fees within the nearly $30 million deal, including another quarter of a million Reynolds will pony up for class notice costs, but they have staked a claim for up to $3 million in expenses.

Wednesday’s motion comes amid multidistrict litigation that has seen other companies down the auto software distribution chain air their grievances, including software vendors and independent data integrators.

The focal point of the litigation is software platforms called data management systems that are developed by Reynolds and CDK and help run the everyday auto dealer operations, including accounting, payroll, inventory, sales, parts, service, finance and insurances. Auto dealers, competing software vendors and third-party data integrators all allege the two companies violated antitrust laws by agreeing to stop competing with each other and embarking on a mission to use their existing duopoly in that platform market to dominate the rest of the distribution chain.

The auto dealers are is represented by Peggy J. Wedgworth and Elizabeth McKenna of Milberg Tadler Phillips Grossman LLP, Leonard A. Bellavia and Steven Blatt of Bellavia Blatt PC, Daniel C. Hedlund, Michelle J. Looby, Daniel E. Gustafson, David A. Goodwin and Daniel J. Nordin of Gustafson Gluek PLLC, James E. Barz, Frank Richter, David W. Mitchell, Alexandra S. Bernay and Carmen A. Medici of Robbins Geller Rudman & Dowd LLP and Robert A. Clifford and Shannon M. McNulty of Clifford Law Offices PC.

Reynolds is represented by Aundrea K. Gulley, Kathy D. Patrick, Brian T. Ross, Brice A. Wilkinson and Ross M. MacDonald of Gibbs & Bruns LLP and Michael P.A. Cohen and Leo D. Caseria of Sheppard Mullin Richter & Hampton LLP.

CDK is represented by Britt M. Miller, Michael A. Scodro, Matthew D. Provance and Mark W. Ryan of Mayer Brown LLP.

The MDL is In re: Dealer Management Systems Antitrust Litigation, case number 18-cv-00864, in the U.S. District Court for the Eastern District of Illinois.

–Additional reporting by John Petrick. Editing by Connor Relyea.


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