Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.1 Filed 05/02/24 Page 1 of 49
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
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` Case No. [_____________]
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` JURY TRIAL DEMANDED
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`
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`Plaintiffs,
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`MARTIN-LANDERS LLC D/B/A
`MARK MARTIN FORD AND
`MARTIN-LANDERS IMPORTS
`LLC D/B/A MARK MARTIN KIA,
`individually and on behalf of all
`others similarly situated,
`
`
`
`v.
`
`CONTINENTAL
`AKTIENGESELLSCHAFT;
`CONTINENTAL TIRE THE
`AMERICAS, LLC; COMPAGNIE
`GÉNÉRALE DES
`ÉTABLISSEMENTS; MICHELIN
`NORTH AMERICA, INC.; NOKIAN
`TYRES PLC; NOKIAN TYRES INC;
`NOKIAN TYRES U.S. OPERATIONS
`LLC; THE GOODYEAR TIRE &
`RUBBER COMPANY; PIRELLI & C.
`S.P.A.; PIRELLI TIRE LLC;
`BRIDGESTONE CORPORATION;
`and BRIDGESTONE AMERICAS,
`INC.
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`
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`
`
`
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`Defendants.
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`CLASS ACTION COMPLAINT
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`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`
`
`
`
`
`
` Case No. [_____________]
`
` JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`
`
`Plaintiffs,
`
`MARTIN-LANDERS LLC D/B/A
`MARK MARTIN FORD AND
`MARTIN-LANDERS IMPORTS
`LLC D/B/A MARK MARTIN KIA,
`individually and on behalf of all
`others similarly situated,
`
`
`
`v.
`
`CONTINENTAL
`AKTIENGESELLSCHAFT;
`CONTINENTAL TIRE THE
`AMERICAS, LLC; COMPAGNIE
`GÉNÉRALE DES
`ÉTABLISSEMENTS; MICHELIN
`NORTH AMERICA, INC.; NOKIAN
`TYRES PLC; NOKIAN TYRES INC;
`NOKIAN TYRES U.S. OPERATIONS
`LLC; THE GOODYEAR TIRE &
`RUBBER COMPANY; PIRELLI & C.
`S.P.A.; PIRELLI TIRE LLC;
`BRIDGESTONE CORPORATION;
`and BRIDGESTONE AMERICAS,
`INC.
`
`
`
`
`
`
`
`
`
`Defendants.
`
`
`CLASS ACTION COMPLAINT
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.2 Filed 05/02/24 Page 2 of 49
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`Plaintiffs Martin-Landers LLC dba Mark Martin Ford and Martin-Landers
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`Imports LLC dba Mark Martin Kia, individually and on behalf of all others similarly
`
`situated, brings this Class Action Complaint for damages and injunctive relief
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`against named Defendants Continental Aktiengesellschaft; Continental Tire the
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`Americas, LLC; Compagnie Générale des Établissements; Michelin North America,
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`Inc.; Nokian Tyres plc; Nokian Tyres Inc; Nokian Tyres U.S. Operations LLC; The
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`Goodyear Tire & Rubber Company; Pirelli & C. S.p.A.; Pirelli Tire LLC;
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`Bridgestone Corporation; Bridgestone Americas, Inc. for violations of Section 1 of
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`the Sherman Act (15 U.S.C. § 1) and violations of various state antitrust laws. All
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`allegations other than those concerning Plaintiffs are based on information and
`
`belief.
`
`I.
`
`INTRODUCTION
`1.
`This action arises from a per se unlawful agreement between
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`Defendants—some of the largest tire manufacturers in the United States and the
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`world—to artificially increase and fix the prices of new replacement tires for
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`passenger cars, vans, trucks, buses, and motorcycles (“Tires”) sold in the United
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`States. Defendants coordinated price
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`increases,
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`including
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`through public
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`communications.
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`2.
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`On January 30, 2024, the European Commission (“EC”) announced
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`dawn raids at the premises of “companies active in the tyres industry in several
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`2
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.3 Filed 05/02/24 Page 3 of 49
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`Member States.”1 The EC justified its dawn raids over suspicion that these
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`companies “violated EU antitrust rules that prohibit cartels and restrictive business
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`practices,” specifically that price coordination took place among these companies.2
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`3.
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`Defendants’ unlawful agreement to fix prices of Tires is supported by,
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`among other things: (i) Defendants’ sudden and dramatic parallel price increases,
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`which absent a conspiracy to fix prices, ran contrary to their economic interests; (ii)
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`EC dawn raids of Defendants; (iii) the high level of market concentration in the Tires
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`market; (iv) significant barriers to entry; (v) lack of economic substitutes for Tires;
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`(vi) standardization of Tires with a high degree of interchangeability; and (vii) the
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`many opportunities that Defendants’ employees had to conspire with one another to
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`fix prices of Tires, coupled with their motivation to achieve an unlawful end.
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`4.
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`Plaintiffs seek to represent a Class of individuals and entities that
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`purchased Tires indirectly from Defendants at supra-competitive prices to recover
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`damages, injunctive relief, and other relief as is appropriate, based on Defendants’
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`violation of federal and state antitrust laws. Plaintiffs demand a trial by jury.
`
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`1 Commission carries out unannounced antitrust inspections in the tyres sector, European Commission (Jan. 30,
`2024) (https://ec.europa.eu/commission/presscorner/detail/en/ip_24_561).
`2 Id.
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`3
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.4 Filed 05/02/24 Page 4 of 49
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`II.
`
`PARTIES
`A.
`PLAINTIFFS
`5.
`Plaintiff Martin-Landers LLC dba Mark Martin Ford is an Arkansas
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`limited liability company located at 1601 Batesville Blvd., Batesville, AR 72501.
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`Plaintiff Martin-Landers LLC purchased Tires manufactured by one or more of
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`Defendants within the States of Arkansas during the Class Period defined below, and
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`Plaintiff Martin-Landers LLC suffered antitrust injury as a result of the violations
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`alleged in this complaint.
`
`6.
`
` Plaintiff Martin-Landers Imports LLC dba Mark Martin Kia is an
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`Arkansas limited liability company located at 1601 Batesville Blvd., Batesville, AR
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`72501. Plaintiff Martin-Landers Imports LLC purchased Tires manufactured by one
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`or more of Defendants within the States of Arkansas during the Class Period defined
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`below, and Plaintiff Martin-Landers Imports suffered antitrust injury as a result of
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`the violations alleged in this complaint.
`
`B. DEFENDANTS
`1.
`Continental
`Defendant Continental Aktiengesellschaft (“Continental AG”), is a
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`7.
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`German company with its headquarters at Vahrenwalder Strasse 9, 30165 Hannover,
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`Germany. Continental AG is divided into four group sectors: Automotive, Tires,
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`4
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.5 Filed 05/02/24 Page 5 of 49
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`ContiTech, and Contract Manufacturing.3 The Tires group has five business areas:
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`(i) Original Equipment, (ii) Replacement APAC, (iii) Replacement EMEA, (iv)
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`Replacement the Americas, and (iv) Specialty Tires.4
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`8.
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`In its 2022 Annual Report, Continental AG reported that its “Tires
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`group sector achieved a particularly positive result, even surpassing expectations
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`with an adjusted EBIT margin of 13.1 percent.”5 In 2022, Continental AG reported
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`sales of €14 billion globally for its tire group.6 Continental AG’s tire group boasts
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`56,987 employees worldwide.7
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`9.
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`In the Tires group sector, sales to dealers and end users represent the
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`largest share of the tire-replacement business.8 For the Tires group sector, economies
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`of scale are important drivers of profitability. For that reason, “manufacturing takes
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`place at major locations in the dominant automotive markets, namely Europe, the
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`U.S., and China.”9
`
`10. Defendant Continental Tire the Americas, LLC (“Continental
`
`U.S.”) is a limited liability company incorporated under Ohio law, with its principal
`
`place of business at 1830 MacMillian Park Drive, Fort Mill, SC 29707. Continental
`
`
`3
`at
`Report,
`Annual
`2022
`Group,
`Continental
`3
`(https://cdn.continental.com/fileadmin/__imported/sites/corporate/_international/english/hubpages/30_20invest
`ors/30_20reports/annual_20reports/downloads/continental_annual_report_2022.pdf).
`4 Id. at 27.
`5 Id. at 4.
`6 Id. at 75.
`7 Id. at 76.
`8 Id. at 26.
`9 Id. at 28.
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`
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`5
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.6 Filed 05/02/24 Page 6 of 49
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`U.S. “manufactures and distributes a complete premium line of passenger, light truck
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`and commercial tires for original equipment and replacement markets.”10
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`Continental US sells its tires through “independent tire dealers, car dealers, and mass
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`retail companies across North America.”11 Continental U.S. has manufacturing
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`facilities in Barnseville, Georgia (Tire Cord [textile]), Mt. Vernon, Illinois
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`(Passenger/light
`
`truck/Commercial
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`truck
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`tires), Sumter, South Carolina
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`(passenger/light truck tires), and Jackson, Missouri (commercial truck tires).12
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`11. Continental U.S.’s headquarters in Fort Mill, SC is the “operational hub
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`for business in the region and oversees all tire product lines including passenger,
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`light truck, commercial, two wheel and specialty tires.”13 The facility has 500+
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`employees and includes teams for Engineering & Technology, Sales & Marketing,
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`and “Central Functions.”14
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`12. Continental U.S.’s Sumter Plant is “a tire manufacturing facility [that]
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`produces high-quality, premium lines of passenger and light truck tires for original
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`equipment and replacement markets.”15 It has a “State of the Art manufacturing
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`facility with a growing team of more than 1200 employees.”16
`
`
`10 Members: Continental
`the Americas,
`Tire
`(https://www.ustires.org/continental-tire-americas-llc).
`11 Id.
`12 Id.
`13 Fort Mill, SC, Continental AG (2024) (https://www.continental.com/en-us/career/our-locations/fort-mill/).
`14 Id.
`15 Sumter, SC, Continental AG (2024) (https://www.continental.com/en-us/career/our-locations/sumter/).
`16 Id.
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`LLC, U.S. Tire Manufacturers Ass’n
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`6
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.7 Filed 05/02/24 Page 7 of 49
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`2. Michelin
`13. Defendant Compagnie Générale des Établissements (“CGEM”) is
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`organized under the laws of France with its principal place of business at 23 place
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`des Carmes-Déchaux, 63000 Clermont-Ferrand, France. CGEM is the Michelin
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`Group’s parent company, which directly or indirectly owns all of its subsidiaries.17
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`CGEM’s two main subsidiaries are Manufacture Française des Pneumatiques
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`Michelin (“MFPM”), a wholly-owned subsidiary that coordinates all of the Group’s
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`manufacturing, sales and research operations in France and Compagnie Financière
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`Michelin (“CFM”), a wholly-owned subsidiary that owns most of the Group’s
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`manufacturing, sales and research companies outside of France and coordinates their
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`operations.18
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`14. Defendant Michelin North America, Inc. is a corporation organized
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`under New York law with its principal place of business at One Parkway South,
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`Greenville, SC 29615-5022. Michelin designs, manufactures, and sells tires for
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`every type of vehicle, including airplanes, automobiles, bicycles, earthmovers, farm
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`equipment, heavy-duty trucks, and motorcycles.19 Michelin is one of the leading
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`manufacturers of tires in the United States. In 2022, Michelin had €10.92 billion in
`
`
`17 CGEM, 2022 Universal Registration Document at 403 (https://www.michelin.com/en/documents/2022-
`universal-registration-document/).
`18 Id.
`19 Members: Michelin, U.S. Tire Manufacturers Ass’n (https://www.ustires.org/michelin-north-america-inc).
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`7
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.8 Filed 05/02/24 Page 8 of 49
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`sales North America, 80% of which were generated in the United States.20 Michelin
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`employs 23,000 people across 34 plants in the United States and Canada.21 Michelin
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`has manufacturing facilities in, among others, Alabama (light trucks and passenger
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`tires), Indiana (car tires), Oklahoma (passenger tires), and South Carolina (passenger
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`tires and truck and bus tires).
`
`3.
`Nokian Tyres
`15. Defendant Nokian Tyres plc is organized under the laws of Finland
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`with its principal place of business at Pirkkalaistie 7, P.O. Box 20, 37101 Nokia,
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`Finland. Nokian Tyres plc is the parent company of the Nokian Tyres Group, which
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`includes subsidiaries worldwide. Nokian Tyres plc develops and manufactures tires
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`for passenger cars, trucks, and heavy machinery. In 2019, the company’s net sales
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`were $1.8 billion, and it employed some 4,700 people.
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`16. Defendant Nokian Tyres Inc. is a corporation organized under
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`Delaware law. It is a fully owned subsidiary of Nokian Tyres U.S. Holdings Inc.,
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`and an indirect subsidiary of Nokian Tyres plc. In December 2018, Nokia Tyres
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`announced its new headquarters located at 501 Union Street in Nashville, Tennessee,
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`which would house Nokia Tyres’ Vice President along, along with members of the
`
`
`20 CGEM, 2022 Universal Registration Document at 344 (https://www.michelin.com/en/documents/2022-
`universal-registration-document/).
`2023, Michelin
`21 Michelin
`Sheet
`Fact
`North
`America
`(https://michelinmedia.com/site/user/files/1/MNA-Fact-Sheet-2023_2.pdf).
`
`Inc.
`
`North
`
`America,
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`8
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.9 Filed 05/02/24 Page 9 of 49
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`company’s sales, customer service, IT, logistics, finance, and marketing teams.22 In
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`2017, Nokian Tyres announced it had opened a $360 million manufacturing facility
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`located at 520 Nokian Tyres Dr., Dayton, TN., 37321.23 The manufacturing facility
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`produces car and light truck all season tires and all-weather tires for consumers in
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`the United States and Canada.
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`17. Defendant Nokian Tyres U.S. Operations LLC is a limited liability
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`company organized under Tennessee law. It is a fully owned subsidiary of Nokian
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`Tyres U.S. Holdings Inc., and an indirect subsidiary of Nokian Tyres plc.
`
`4. Goodyear
`18. Defendant The Goodyear Tire & Rubber Company is a corporation
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`organized under Ohio law with its principal place of business at 200 Innovation Way
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`Akron, Ohio 44316-0001. Goodyear is one of the world’s leading tire companies,
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`with one of the most recognizable brand names. It develops, manufactures, markets
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`and distributes tires for most applications and manufactures and markets rubber-
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`related chemicals for various uses. 24 Through its worldwide network of aligned
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`dealers and wholesale distributors and its own retail outlets and commercial truck
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`centers, Goodyear offers its products for sale to consumer and commercial
`
`
`22 Wes Boiling, Nokian Tyres Thriving in New Nashville Headquaters, Nokian Tyres plc (Dec. 12, 2018)
`(https://www.nokiantires.com/company/news-article/nokian-tyres-thriving-in-new-nashville-headquarters/).
`23 Associate Press, Nokian Tyres opens $360M tire factory in Tennessee, The Journal Record (Oct. 3, 2019)
`(https://journalrecord.com/2019/10/nokian-tyres-opens-360m-tire-factory-in-tennessee/).
`24 The Goodyear Tire & Rubber Co., 2022 Annual Report, 2 (Feb. 14, 2023).
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`9
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.10 Filed 05/02/24 Page 10 of 49
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`customers, along with repair and other services.25 Goodyear manufactures its
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`products in 57 facilities in 23 countries and has operations in most regions of the
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`world.26 Goodyear manufactures and sells under the Goodyear, Cooper, Dunlop,
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`Kelly, Debica, Sava, Fulda, Mastercraft and Roadmaster brands.27 Approximately
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`86% of Goodyear’s sales in 2022, 85% in 2021 and 84% in 2020 were for tire units.28
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`The principal channel for the sale of Goodyear and Cooper brand tires in Americas
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`is a large network of independent dealers. Goodyear, Cooper, Dunlop, Kelly and
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`Mastercraft brand tires are also sold to numerous national and regional retailers, in
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`Goodyear Company-owned stores in the United States, and through the wholesale
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`channel, including through TireHub, LLC, Goodyear’s national wholesale tire
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`distributor in the United States, and a network of aligned U.S. regional wholesale
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`tire distributors.29
`
`5.
`Pirelli
`19. Defendant Pirelli & C. S.p.A. is organized under the laws of Italy with
`
`its principal place of business at Via Bicocca degli Arcimboldi, 3, 20126 Milano MI,
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`Italy. Pirelli designs, manufactures, and distributes tires for cars, motorcycles, and
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`bicycles. Pirelli focuses its business on the high end, premium product segment
`
`
`
`25 Id.
`26 Id.
`27 The Goodyear Tire & Rubber Co., 2022 Annual Report, 2 (Feb. 14, 2023).
`28 The Goodyear Tire & Rubber Co., 2022 Annual Report (Form 10-K), 2 (Feb. 14, 2023).
`29 Id. at 3.
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`10
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`where it is a world leader. Pirelli has a commercial presence in over 160 countries
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`and 19 manufacturing sites in 12 countries.30
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`20. Defendant Pirelli Tire LLC is a foreign limited liability company
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`organized under Delaware law with its principal place of business located at 100
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`Pirelli Drive Rome, GA 30161. Pirelli Tire LLC includes the Modular Integrated
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`Robotized System (MIRS) facility and research and development center at its Rome,
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`Georgia headquarters, a state-of-the-art manufacturing plant in Silao, Mexico, sales
`
`and marketing offices in New York City, Los Angeles, Detroit, Montreal and
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`Atlanta, and a prestige flagship store in Los Angeles.31 The company manufactures,
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`distributes, and markets original equipment and replacement tires for export and
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`domestic car/motorcycle applications.
`
`6.
`Bridgestone
`21. Defendant Bridgestone Corporation is organized under the laws of
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`Japan with its principal place of business at 1-1, Kyobashi 3-chome, Chuo-ku, Tokyo
`
`104-8340. Bridgestone Corporation is the parent corporation of the Bridgestone
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`Group (the “Group”), which refers to all Group companies, including Bridgestone
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`Americas (“BSAM”), Bridgestone China, Asia Pacific (“BSCAP”), Bridgestone
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`Europe, Russia, Middle East, India, and Africa (“BSEMIA”), and Bridgestone Japan
`
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`30 Members: Pirelli, U.S. Tire Manufacturers Ass’n (https://www.ustires.org/pirelli-tire-llc).
`31 Id.
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`11
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.12 Filed 05/02/24 Page 12 of 49
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`(“BSJP”).32 Bridgestone Corporation is the world’s largest tire and rubber
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`company.33
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`22. Defendant Bridgestone Americas, Inc. (“BSAM”) is incorporated
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`under Nevada law with its principal place of business at 200 4th Ave, Suite 100,
`
`Nashville, Tennessee, 37201-2256. BSAM and
`
`its subsidiaries develop,
`
`manufacture, and market a wide range of Bridgestone, Firestone, and associate brand
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`tires to address the needs of a broad range of customers, including consumers,
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`automotive and commercial vehicle original equipment manufacturers, and those in
`
`the agricultural, forestry and mining industries.34 BSAM has U.S. manufacturing
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`facilities in Arkansas, Georgia, Iowa, Illinois, North Carolina, Ohio, South Carolina,
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`Tennessee, and Texas.35 Defendant BSAM also owns Firestone Tire and Rubber
`
`Company, which operates twenty commercial retailers in Michigan and hundreds
`
`nationwide.
`
`III. AGENTS AND CO-CONSPIRATORS
`23. The anticompetitive and unlawful acts alleged against Defendants in
`
`this Complaint were authorized, ordered, or performed by Defendants’ officers,
`
`Integrated
`2023
`Corp.,
`Bridgestone
`32
`(https://www.bridgestone.com/ir/library/integrated_report/pdf/2023/ir2023_single.pdf).
`33 Members: Bridgestone Americas, Inc,, U.S. Tire Manufacturers Ass’n (https://www.ustires.org/bridgestone-
`americas-inc).
`34 Id.
`35 Id.
`
`Report,
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`3
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`12
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`agents, employees, or representatives, while engaged in the management, direction,
`
`or control of Defendants’ businesses or affairs.
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`24. Each corporate Defendants’ agents operated under the authority and
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`apparent authority of its principals.
`
`25. Each corporate Defendant, through its subsidiaries, affiliates, and
`
`agents, operated as a single unified entity.
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`26. Various persons and/or firms not named as Defendants here may have
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`participated as co-conspirators in the violations alleged here and may have
`
`performed acts and made statements in furtherance thereof.
`
`27. Each Defendant acted as the principal or agent of, or for, other
`
`Defendants with respect to the acts, violations, and common course of conduct
`
`alleged herein.
`
`28. When Plaintiffs refer to a corporate family or companies by a single
`
`name in their allegations of participation in the conspiracy, it is to be understood that
`
`Plaintiffs are alleging that one or more employee or agent of entities within the
`
`corporate family engaged in conspiratorial acts or meetings on behalf of all the
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`Defendant companies within that family. Furthermore, if subsidiaries within
`
`corporate families distributed the Tire products discussed in this Complaint, these
`
`subsidiaries played a significant role in the conspiracy because Defendants wished
`
`to ensure that the prices paid for such products would not undercut their pricing
`
`13
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`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.14 Filed 05/02/24 Page 14 of 49
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`agreements. Thus, all Defendant entities within the corporate families were active,
`
`knowing participants in the conspiracy to maintain supracompetitive prices
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`IV.
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`JURISDICTION AND VENUE
`29. The Court also has subject matter jurisdiction under 28 U.S.C. §§ 1331,
`
`1332(d), 1337(a), and 1367. The Court has jurisdiction over Plaintiff’s claim for
`
`injunctive relief under Section 16 of the Clayton Act, 15 U.S.C. § 26.
`
`30. This Court has personal jurisdiction over Defendants because they
`
`purposefully directed their business activity toward this jurisdiction and had
`
`substantial contacts with this jurisdiction, and because Plaintiffs’ claims for relief
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`arise from and relate to illegal acts committed by Defendants within this
`
`jurisdiction.36
`
`31. Venue is proper in this district under 28 U.S.C. §§ 1391(a), (b), (c), and
`
`(d), and 15 U.S.C. §§ 15(a) and 22. During the Class Period (defined below),
`
`Defendants transacted business in this District, and a substantial portion of the
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`activity at issue here occurred in this District.
`
`32. Defendants’ conduct alleged herein occurred within the flow of
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`interstate commerce, including in this District, and was intended to and did have a
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`direct and substantial effect upon such commerce.
`
`
`36 In Michigan, Defendant Bridgestone Corporation has over 120 commercial Tire dealer locations in addition
`to the third-party retailers that stock Bridgestone Tires; Defendants The Goodyear Tire & Rubber Company,
`Continental Tire the Americas, LLC, Pirelli Tire LLC, Nokian Tires Inc., and Michelin North America Inc. all
`distribute and sell Tires to and through dozens, if not hundreds, of commercial entities in Michigan.
`
`14
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`33. During the Class Period, Defendants manufactured, sold, and shipped
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`Tires in a continuous and uninterrupted flow of interstate commerce, which included
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`sales of Tires in this District, advertisement of Tires in media in this District, and
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`employment of sales personnel in this District. Defendants’ conduct had and
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`continues to have a direct, substantial, and reasonably foreseeable effect on interstate
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`commerce, including commerce within this District.
`
`V.
`
`FACTUAL ALLEGATIONS
`A. The Tires Market
`34. Virtually all wheeled land vehicles in operation, whether off-road or
`
`on-road, use tires. This dependence makes the tire industry a critical component of
`
`the U.S. automobile industry. With nearly 9.2 million passenger and commercial
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`vehicles being produced and almost 14 million vehicles being sold in the United
`
`States in 2022, the U.S. market calls for a large number of tires to be manufactured
`
`annually.
`
`35. Given the critical need for tires in all wheeled land vehicles, automobile
`
`tire manufacturers have existed in the United States as long as there have been cars.
`
`For example, Defendant Goodyear began producing automobile tires in 1899.37
`
`36. U.S. tire manufacturing has an annual economic footprint of $170.6
`
`billion.38 The United States Tire Manufacturers Association (“USTMA”) projects
`
`
`37 Company History, Goodyear Corporate (https://corporate.goodyear.com/us/en/about/history.html).
`38 Economy, U.S. Tire Manufacturers Ass’n (https://www.ustires.org/economy).
`
`15
`
`
`
`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.16 Filed 05/02/24 Page 16 of 49
`
`total U.S. tire shipments of 334.2 million units in 2023, compared to 332.0 million
`
`units in 2022 and 332.7 million units in 2019.39 The market for replacement tires in
`
`the United States was sized at approximately $61 billion in 2022.
`
`37. Manufactured tires can either be used in new cars (“Original Equipment
`
`Tires” or “OE” tires) or produced as replacement tires (“Dedicated Replacement
`
`Tires”). There are differences between OE tires and Dedicated Replacement Tires.
`
`OE tires are specified by the vehicle manufacturer and are initially fitted to the
`
`vehicle when new. The car manufacturer works with tire companies to choose a tire
`
`that will meet any number of performance requirements for their brand-new vehicle.
`
`The manufacturer selects a tire that balances ride noise, handling, longevity, and fuel
`
`efficiency to achieve the overall characteristics that the vehicle manufacturer
`
`believes is important to the end-user.
`
`38. By contrast, Dedicated Replacement Tires are selected by individual
`
`consumers.
`
`B.
`
`Tire Prices in the United States increased dramatically after long
`periods of stable pricing.
`39. For most of the 2010s, the price level of Tires was stable, changing only
`
`by small amounts slowly. Over the last four years, however, the prices of Tires have
`
`seen dramatic increases, driven by lock-step prices increases from the major U.S.
`
`
`39 2023 Tire Shipment Outlook, U.S. Tire Manufacturers Ass’n (Feb. 28, 2023) (https://www.ustires.org/2023-
`tire-shipment-outlook).
`
`16
`
`
`
`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.17 Filed 05/02/24 Page 17 of 49
`
`Tire manufacturers. For example, statistics provided by the Federal Reserve
`
`Economic Data (FRED) show a spike in the producer price index by industry for tire
`
`manufacturing (except retreading) for pneumatic tires (which includes passenger,
`
`truck, bus, tractor, industrial, and other tires):40
`
`
`This drastic increase in the price index cannot be explained by COVID-19 nor is it
`
`
`
`a historical trend.
`
`40. The following table summarizes Defendants’ price increases on
`
`passenger and light truck replacement tires between 2021 and 2023:
`
`Table 1: Defendants’ Prices Increases During the Class Period
`
`Defendant
`Michelin
`
`Effective Date
`February 1, 2021
`
`Price Increase
`Up to 5%
`
`
`40 Producer Price Index by Industry: Tire Manufacturing, Except Retreading: Pneumatic Tires (Including
`Passenger, Truck, Bus, Tractor, Industrial, and Other Tires) (PCU3262113262110), U.S. Bureau of Labor
`Statistics (https://fred.stlouisfed.org/series/PCU3262113262110).
`
`17
`
`
`
`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.18 Filed 05/02/24 Page 18 of 49
`
`Defendant
`Continental
`Michelin
`Goodyear
`Pirelli
`Bridgestone
`Goodyear
`Michelin
`Continental
`Pirelli
`Goodyear
`Michelin
`Continental
`Pirelli
`Michelin
`Goodyear
`Continental
`Pirelli
`Continental
`Michelin
`Bridgestone
`Pirelli
`Continental
`Michelin
`Pirelli
`Goodyear
`Bridgestone
`Bridgestone
`Michelin
`Bridgestone
`Pirelli
`
`Effective Date
`March 1, 2021
`April 1, 2021
`April 1, 2021
`April 15, 2021
`May 1, 2021
`June 1, 2021
`July 1, 2021
`July 1, 2021
`July 1, 2021
`September 1, 2021
`September 1, 2021
`October 1, 2021
`October 1, 2021
`January 1, 2022
`January 1, 2022
`January 3, 2022
`January 17, 2022
`April 1, 2022
`April 1, 2022
`April 1, 2022
`April 11, 2022
`June 1, 2022
`June 1, 2022
`June 15, 2022
`July 1, 2022
`July 1, 2022
`October 1, 2022
`January 1, 2023
`January 1, 2023
`January 15, 2023
`
`Price Increase
`Undisclosed
`Up to 8%
`Up to 8%
`Up to 7%
`Up to 8%
`Up to 8%
`Up to 6%
`Undisclosed
`Up to 6%
`Up to 8%
`Up to 14%
`Undisclosed
`Up to 8%
`Up to 12%
`Up to 12%
`Undisclosed
`Up to 10%
`Undisclosed
`Up to 5%
`Up to 10%
`Up to 10%
`Undisclosed
`5-12%
`Up to 10%
`Up to 10%
`Up to 10%
`Up to 9%
`Up to 9%
`Undisclosed
`Up 10%
`
`41. Effective February 1, 2021, Michelin increased prices on select
`
`
`
`Michelin and BFGoodrich brand passenger and light truck tires, as well as on select
`
`18
`
`
`
`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.19 Filed 05/02/24 Page 19 of 49
`
`commercial truck tires, up to 5% “due to changing business dynamics of the U.S.
`
`market.”41
`
`42. Effective March 1, 2021, Continental increased prices on select
`
`passenger and light truck tires in the U.S. within the Continental and General brands
`
`by an undisclosed amount.42
`
`43. Effective April 1, 2021, Michelin and Goodyear both increased prices
`
`on tires. Michelin increased prices on select Michelin, BFGoodrich and Uniroyal
`
`passenger and light truck tires up to 8%, citing “changing business dynamics and
`
`rising costs of raw materials.”43 Goodyear raised prices of its Goodyear, Dunlop, and
`
`Kelly-brand consumer tires by up to 8%.44
`
`44. Effective April 15, 2021, Pirelli increased prices on passenger and light
`
`truck tires in the United States up to 7%, citing “higher price of raw materials and
`
`changing market conditions.45
`
`
`41 Michelin Will Raise Consumer, Commercial Prices on Feb. 1, Modern Tire Dealer (Dec. 19, 2020)
`(https://www.moderntiredealer.com/topic-category/topics/article/11475158/michelin-will-raise-consumer-
`commercial-prices-on-feb-1-2020-12-19).
`(Jan. 6, 2021)
`42 Continental Plans Price Hike on PLT Tires, Modern Tire Dealer
`(https://www.moderntiredealer.com/topics/industry-news/article/11474953/continental-plans-price-hike-on-
`plt-tires-2021-01-06).
`43 Michelin Will Raise Consumer Tire Prices on April 1, Modern Tire Dealer (Mar. 1, 2021)
`(https://www.moderntiredealer.com/topic-category/topics/article/11473824/michelin-will-raise-consumer-tire-
`prices-on-april-1-2021-03-01).
`(Mar. 3, 2021)
`44 Goodyear
`to
`Increase Consumer Tire Prices, Modern Tire Dealer
`(https://www.moderntiredealer.com/topics/industry-news/article/11473768/goodyear-to-increase-consumer-
`tire-prices-2021-03-03).
`(Mar. 9, 2021)
`in U.S. on April 15, Modern Tire Dealer
`45 Pirelli Will Raise Prices
`(https://www.moderntiredealer.com/topic-category/topics/article/11473594/pirelli-will-raise-prices-in-us-on-
`april-15-2021-03-09).
`
`19
`
`
`
`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.20 Filed 05/02/24 Page 20 of 49
`
`45. Effective May 1, 2021, Bridgestone increased prices on select
`
`Bridgestone and Firestone brand passenger and light truck tires up to 8% in the
`
`United States and Canada due to “increased business costs and other market
`
`dynamics.”46
`
`46. Effective June 1, 2021, Goodyear increased prices on Goodyear,
`
`Dunlop, and Kelly consumer tires by up to 8%. Goodyear blamed the increase on
`
`“changing market dynamics in the industry and [a] reflect[ion of] the strong value
`
`of the Goodyear brands”—using identical wording from its April 1, 2021 price
`
`increase.47
`
`47. Effective July 1, 2021, Michelin, Continental, and Pirelli implemented
`
`price increases on tires. Michelin increased prices on certain aftermarket Michelin,
`
`BFGoodrich, and Uniroyal passenger and light truck tires by up to 6%. Continental
`
`increased prices on select Continental and General brand passenger and light truck
`
`tires by an undisclosed amount.48 Pirelli increased prices of passenger and light truck
`
`
`46 Bridgestone to Raise Consumer Tire Prices on May 1, Modern Tire Dealer (Mar. 24, 2021)
`(https://www.moderntiredealer.com/site-placement/featured-stories/article/11473222/bridgestone-to-raise-
`consumer-tire-prices-on-may-1-2021-03-24).
`47 Goodyear Plans Another Consumer Tire Price Hike, Modern Tire Dealer (May 3, 2021)
`(https://www.moderntiredealer.com/topics/industry-news/article/11472039/goodyear-plans-another-consumer-
`tire-price-hike).
`48 Continental Will Raise Consumer Tire Prices in July, Modern Tire Dealer (May 5, 2021)
`(https://www.moderntiredealer.com/topic-category/topics/article/11471940/continental-will-raise-consumer-
`tire-prices-in-july-1-2021-05-05).
`
`20
`
`
`
`Case 2:24-cv-11185-LVP-DRG ECF No. 1, PageID.21 Filed 05/02/24 Page 21 of 49
`
`tires by up to 6%, citing higher price of raw materials and changing market
`
`conditions.49
`
`48. Effective September 1, 2021, Michelin and Goodyear implemented
`
`price increases on consumer tires. Michelin increased prices on certain aftermarket
`
`Michelin, BFGoodrich, and Uniroyal passenger and light truck tires by up to 14%.50
`
`Goodyear increased prices on passenger and light truck tires by up to 8%.51
`
`49. Effective October 1, 2021, Continental and Pirelli increased prices on
`
`tires. Continental increased prices on some Continental and General passenger and
`
`light truck tires by an undisclosed amount.52 Pirelli increased prices on car and light
`
`truck tires by up to 8%, citing higher prices of raw materials and changing market
`
`conditions.53
`
`50. Effective January 1, 2022, Defendant Michelin implemented price
`
`increases up to 12% on select Michelin, BFGoodrich, and Uniroyal passenger and
`
`
`2021)
`18,
`(May
`Tire Dealer
`Price Hike, Modern
`Plans Another
`Pirelli
`49
`(https://www.moderntiredealer.com/topics/industry-news/article/11471596/pirelli-plans-another-price-hike).
`50 Stephen Goodchild, Michelin announces North America price increases, TyrePress (Aug. 3, 2021)
`(https://www.tyrepress.com/2021/08/michelin-announces-north-america-price-increases/).
`51 Goodyear and Cooper Consumer Tire Prices Are Going Up, Ratchet+Wrench (Aug. 10, 2021)
`(https://www.ratchetandwrench.com/topics/news/article/11463860/goodyear-and-cooper-consumer-tire-prices-
`are-going-up-modern-tire-dealer).
`52 Danielle Hess, Continental Tire Announces Price Increase, Tire Review (Aug. 30, 2021)
`(https://www.tirereview.com/continental-tire-announces-pri
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