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Letter to the Editor

California Shops File Suit Alleging Paint Company Price Fixing

An auto body group representing several hundred auto body shops in California hasfiled suit, on August 15, in Los Angeles Superior Court, against the major refinish paint manufacturers, alleging that representatives of the paint manufacturers met in Europe in 1993 to agree on the wholesale price of paint sold in the United States.

The auto body suit named PPG Industries Inc., DuPont, Sherwin-Williams Co., BASF AG, and Akzo Nobel, among others, as defendants.

The defendants allegedly agreed to set minimum paint resale prices at which wholesale distributors or jobbers could resell the paint to auto body shops during the 1993 meeting in Europe.

Distributor defendants include D'Angelo & Sons Inc., Tri- City Paint Corp., California Car Color, FinishMaster Inc., Auto Color Specialists Inc., National Oak Distributors Inc., and Hayward Color Inc.

Civil suits with similar allegations have been filed in Pennsylvania in recent years. The Justice Department in Philadelphia subpoenaed company records last year from paint companies in its inquiry into price- fixing accusations. The California suit, which seeks restitution of about $50 million in losses from paint companies and distributors that allegedly refused to pass along a 15 percent discount on the paint under resale paint maintenance agreements.

The Los Angeles law firm of Blecher & Collins PC, representing the shop group, also allege that the manufacturers and distributors broke California's antitrust laws and unfair competition laws by conspiring to fix prices.

A court date for a hearing on the matter has not yet been set. Meanwhile, the Justice Department investigation on the east coast is still ongoing.

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