Billy Cook, et al. v. Powell Buick, Inc., et al.No. 94-1730 (U.S.D.C., W.D. LA)

Senior vice president Gary French submitted an affidavit and testified at a hearing on class certification issues in an antitrust case brought against the Louisiana Automobile Dealers Association (LADA).

Plaintiffs alleged that LADA added ad valorem taxes to the previously agreed-on prices between purchasers and dealers, instead of identifying those taxes as components of the agreed-on prices, as provided for in legislation passed in 1988. LADA had lobbied for passage of this legislation.

After analyzing sales documents, LADA documents, and the testimony of LADA officials, Dr. French concluded that ad valorem taxes had indeed been added and resulted in overcharges to each class member. And he determined that these overcharges could be estimated using a common formula. The court later certified both the plaintiff and defendant classes and approved the settlement reached by the parties.

To help obtain approval of the settlement, Dr. French estimated the savings to future vehicle purchasers in Louisiana from the injunction prohibiting any further addition of ad valorem taxes. He also demonstrated the value of cash rebate and service certificates that were to be issued to class members.

Under the settlement terms, plaintiff class members would receive (1) cash certificates equal to three times the amount of the ad valorem taxes on their new vehicle purchases over the previous 10 years, or (2) optional cash certificates that could be applied to up to 25 percent of the defendant dealers’ repair or service charges.

Certificates equaled three times the actual injury. They could be added and applied up to certain limits against the purchase of new vehicles or service, and they were saleable or transferable within certain limits.

For these reasons, Dr. French submitted another affidavit estimating the value of the certificates and the injunction to the class to be more than $100,000,000. In a final affidavit, he estimated that the value of the certificates decreased by about $2,000,000 because of an 8-month delay in their issuance caused by objections to the settlement.

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