ATLANTA-Michelin Americas Small Tires (MAST) announced April 9 that it resolved its price discrimination legal dispute with DeKalb Tire Co. Inc. by acquiring the dealership.
No financial terms of the agreement were released by either side.
DeKalb Tire, which was owned by Ray Bennett, operated four retail stores in the suburbs of Atlanta.
In August 1997, Mr. Bennett filed a multimillion-dollar lawsuit against Michelin. He claimed that retailing giants such as Wal-Mart Stores Inc. and its Sam's Club unit, Costco Wholesale Inc., Kmart Corp., and Sears, Roebuck and Co. and its National Tire & Battery subsidiary received preferential pricing from the tire maker-to the detriment of small independent dealerships such as DeKalb Tire. The litigation charged Michelin with violating the Robinson-Patman Act-a federal statute that sets rules on pricing.
Michelin had called the suit ``meritless,'' and filed a motion for summary judgment. After that request was denied, the case was scheduled to go to trial April 23 before a six-person jury in the U.S. District Court, Northern District of Georgia, Atlanta Division. But as the trial approached, both sides had been meeting to explore a possible settlement.
A brief MAST press release only said that ``the terms of the agreement are confidential and resolve the pending dispute between the parties. DeKalb Tire will continue to supply MAST brand passenger and light truck tire products to MAST tire customers in Atlanta.''
The dealership had, from the early 1970s until January 1996, bought tires for resale directly from Michelin. But Mr. Bennett had then claimed that his supply from MAST was cut off and he was forced to order Michelin tires indirectly through wholesalers such as Target Tire Inc. and Heafner Tire Group's ITCO Tire subsidiary.
Concerning the acquisition of the dealership, a Michelin spokeswoman told Tire Business: ``It's a situation where we both decided that this was the best way to resolve the dispute. And we've agreed not to talk about it.''
Mr. Bennett said he is ``diligently adhering to the DeKalb Tire/Michelin confidentiallity agreement,'' and thus could not comment on the buyout.
Had the case gone to trial and he was victorious, he hoped to recover more than $10 million in damages. But since the suit was covered by federal antitrust rules, Mr. Bennett could have been awarded three times that amount plus attorneys' fees and court costs.