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Meritor May Be Able to Seek $2 Billion Damages From Eaton

Eaton Corp., which lost an antitrust suit to Meritor Inc. in 2009 over the marketing of truck transmissions, may have to face more than $2 billion in claims after a judge refused to exclude some testimony on damages.

U.S. District Judge Sue L. Robinson in Wilmington, Delaware, today decided jurors in an eight-day trial scheduled to begin June 23 will be able to consider some evidence Eaton tried to avoid.

“Although I recognize the general applicability” of Eaton’s legal arguments, the plaintiffs “have the better arguments,” Robinson wrote.

Based on legal standards, “a damages award not only benefits the plaintiff, it also fosters competition and furthers the interests of the public by imposing a severe penalty,” she said.

Meritor Transmission, a unit of Troy, Michigan-based Meritor, and its affiliate ZF Meritor LLC sued Cleveland-based Eaton in 2006.

A jury in the liability phase of the case ruled in 2009 that Eaton had damaged Meritor by offering “exclusive dealing contracts” and unfair rebates that thwarted competition in North America and gained Eaton 90 percent of the market.

Meritor asked for more than $800 million in damages in the coming second trial, which would automatically be tripled under antitrust law, according to Meritor.

Joint Venture

The plaintiffs are Meritor Transmission and the former heavy-duty transmission maker ZF Meritor LLC of Laurinburg, North Carolina, a joint venture formed in 1999 between Meritor and Germany’s ZF Friedrichshafen AG that lasted until 2003, according to testimony.

Robert Herta, a spokesman for Meritor, and Scott Schroeder, Eaton’s spokesman, didn’t immediately respond to requests for comment on the ruling.

Meritor rose 80 cents to $14.40 at 2:18 p.m. in New York trading. Eaton rose 14 cents $73.52.

The case is ZF Meritor LLC v. Eaton Corp., 06-cv-00623, U.S. District Court, District of Delaware (Wilmington).

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