TRAVERSE CITY — City officials will lead a class action lawsuit they hope will land the city $25,000 to $50,000 from auto parts manufacturers who were convicted of price fixing.
The city became the first municipality to initiate a class action suit that was proposed by a downstate law firm. The city could serve as the umbrella government agency for other municipalities that purchased vehicles since 2000. The law firm Green & Noblin approached city commissioners through a link with former Mayor Chris Bzdok.
“We have foreign companies that pleaded guilty to criminal price fixing, which means essentially they stole the money from customers,” Bzdok told commissioners at a meeting this week. “It’s not a lot of money, but it was stolen from cities, including Traverse City.”
The U.S. Department of Justice obtained guilty pleas to criminal charges of bid-rigging and price-fixing from at least five manufacturers of wire harness systems used in virtually every motor vehicle created from 2000 through 2010, City Manager Jered Ottenwess said. During that period Traverse City purchased 116 vehicles.
The lead attorney for Green & Noblin is related to someone in Bzdok’s Traverse City law firm. Bzdok said he decided to approach the city because it has taken the lead on legal issues in past years and because city officials keep great records. He said several lawsuits already are pending against the manufacturers to compensate customers, but municipalities are barred from those lawsuits.
Traverse City will not pay for any costs or legal fees associated with the lawsuit.
Commissioner Barbara Budros, an attorney, said 28 guilty pleas have been entered in the criminal case, with jail time, large fines, and “major pots of money” set aside to reimburse end users.
“If nobody does anything, prices get fixed all over the place and we all pay a lot more for everything,” Budros said. “It’s very important that people take action in these types of cases and make sure the wrongdoers are held responsible.”