Another company has filed suit against Reynolds and Reynolds, a substantial Kettering employer, again alleging that the business has formed a “duopoly” with an Illinois company to push smaller competitors out of business.
A California tech company, i3 Brands, which sells Original Equipment Manufacturer warranties on new cars, has sued Reynolds, charging that the Kettering company is “conspiring with CDK Global to improperly form a duopoly to dominate the auto dealership tech sector.”
The complaint was filed in federal district court for the Southern District of California. CDK Global LLC is also named as a defendant.
Reynolds and CDK provide online data management systems to help auto dealers run their businesses.
“Anyone who has purchased a new car in the last several years has been offered an extended warranty on OEM parts,” a spokesman for i3 Brands said in an email. “CDK and Reynolds have forced several rivals out of business by agreeing to freeze out all rivals and not to tread on each other’s turf, it is alleged.”
The suit states: “That (i3 President Michael) Lucas has been able to establish a footprint in the auto services industry is a miracle because corporate behemoths, defendants Reynolds and CDK Global … have dominated that industry for years and have used their positions of power to oppress entrepreneurs, such as Mr. Lucas, who have posed a threat to them.”
Lucas has a product his company calls “PartProtection,” a 36-month, unlimited miles service contract or warranty for individual parts on vehicles.
There have been at least two other lawsuits filed against Reynolds and CDK alleging anti-competitive behavior. Data integrator Authenticom filed suit against both in 2017, as did a Chrysler-Jeep-Dodge-Ram auto dealership in Little Ferry, N.J.
On Jan. 22, a judge in a federal court in Illinois approved a settlement between Reynolds and a class of auto dealer plaintiffs in a separate suit that made similar allegations.
That settlement was nearly $30 million, including about $3 million for attorneys’ fees and another $250,000 to cover the costs of notifying members of the legal class of the terms of the settlement.
That lawsuit alone had more than 50 plaintiffs, including Cox Automotive Inc. Cox Automotive is part of Cox Enterprises, which owns Cox Media Group, of which the Dayton Daily News is a part.
A spokesman for Reynolds declined to comment on the latest suit. A message seeking comment was sent to representatives of CDK.
Reynolds has about 1,300 employees on a campus off County Line Road in the Miami Valley Research Park.
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