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Court to weigh $29.5M Reynolds and Reynolds settlement

A federal court in Illinois has given preliminary approval to a proposed settlement that would have Kettering-based Reynolds and Reynolds pay a group of auto dealers nearly $30 million to settle a lawsuit that alleged antitrust activities.

The settlement includes about $3 million for attorneys’ fees and another $250,000 to cover the costs of notifying members of a legal class of the terms of the settlement.

A hearing on final approval of the $29.5 million settlement is scheduled for Jan. 22, 2019 in federal court in the Northern District of Illinois. It was given preliminary approval earlier this month.

RELATEDDealers sue Reynolds, second firm for allegedly violating Sherman Act

Illinois-based CDK Global, a fellow defendant with Reynolds in the lawsuit, is not part of the proposed settlement, court documents indicate.

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The case stems from allegations made in lawsuits filed in 2017 that the two dealership management system companies — Reynolds and CDK — conspired to block smaller companies like Motor Vehicle Software Corp. and Authenticom from access to data about auto dealers on a computerized “dealer management system.”

Reynolds and CDK offer services and products tied to dealer management systems that hold pertinent information in running auto dealerships. Often, dealers say they need to give third-party vendors access to that information.

RELATEDFederal Trade Commission probes Reynolds, CDK

The overall allegation is that Reynolds and CDK wanted to give themselves and a joint venture company, Computerized Vehicle Registration, an advantage in the market by blocking smaller competitors.

Plaintiffs in the case have also included vendors who are not auto dealers, including Cox Automotive Inc. and Superior Integrated Solutions. (Superior Integrated settled its lawsuit against Reynolds earlier this year.)

Cox Automotive is part of Cox Enterprises, which also owns Cox Media Group, of which the Dayton Daily News is a part.

Federal court documents in the massive case list at least 54 plaintiffs.

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Over the past 19 or so months, there were at least four attempts by Reynolds and CDK to have the lawsuit dismissed. The court rebuffed all of them.

Thomas Schwartz, a spokesman for Reynolds, confirmed that the agreement is subject to final court approval.

“As part of the court’s process, a notice about the proposed settlement was being mailed the week of Nov. 12 to members of the class (dealers),” he said in an email.

Schwartz noted that court documents also state: “Reynolds denies any wrongdoing alleged in the lawsuit and the court has not ruled that Reynolds did anything wrong or violated any law.”

Reynolds has about 1,300 employees on a large campus off County Line Road in the Miami Valley Research Park.

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