AKRON (Jan. 19, 2000)—A $3.5 billion lawsuit filed by Hong Kong-based tire maker China Tire Holdings Ltd. is the "latest attempt to resurrect" a prior suit against Goodyear, the Akron rubber firm claims.
The civil action, filed last month in the U.S. District Court for the Northern District of Ohio in Cleveland, alleges that Goodyear engaged in "deceptive trade practices, trade libel and violations of the Foreign Corrupt Practices Act," a China Tire release said.
The suit, which seeks actual and punitive damages amounting to $3.5 billion, stems from Goodyear´s establishment in 1994 of a joint venture in Dalian, China, that circumvented a previous joint venture agreement between China Tire and Dalian General Rubber Factory.
China Tire and its U.S. distributor, Orion Tire Corp., filed a $1 billion lawsuit against Goodyear in March 1995 in U.S. District Court in Los Angeles. That suit was dismissed last September on summary judgment.
China Tire is appealing that decision to the 9th Circuit Court of Appeals, but decided to file a new complaint in Ohio. The case was transferred to Akron shortly after its filing.
"We are confident that once we have presented our evidence, it will be apparent that Goodyear improperly interfered in our contractual relationship with a strategically located Chinese tire factory," said Peter McNulty, a Bel Air, Calif., attorney who represents China Tire. "In so doing, Goodyear caused substantial harm to China Tire and its shareholders."
The lawsuit alleges that Goodyear unlawfully persuaded officials from the state-owned Dalian factory to abandon a binding contract with China Tire to manufacture radial tires in China and other international locations.
Goodyear made false and disparaging statements about China Tire executives and gave jewelry, clothes, travel and employment contracts to factory officials to persuade them to cut ties with China Tire, the suit claims.
These actions violated the FCPA, trade libel laws, the Racketeer Influenced and Corrupt Organizations Act and the Ohio Deceptive Trade Practices Act, the suit says.
Goodyear officials wouldn´t comment on the suit, but a spokesman said in a statement that the company´s joint venture in China was "wholly appropriate."
"Goodyear has for the past four years successfully defended its good name against China Tire´s reckless and feckless allegations," the company said. "China Tire´s recent filing is retreaded allegations that were unsuccessful in federal court in California. China Tire´s forum shopping will be aggressively addressed in the courts."
The Akron tire maker affirmed that the California-based federal court has ordered China Tire to pay its court costs there and is confident the subsequent claims will be summarily dismissed, the spokesman said.
Goodyear employees and agents named in the suit include Chairman, President and CEO Samir Gibara; Clarke Sprang, vice president of business development; Jonathan Dean, a lawyer for the company´s general counsel; William Ford, venture manager; John Ross, corporate general counsel; and Jerry Laing, former president of Goodyear Taiwan, who became president of Goodyear China.