DAVENPORT, Iowa-A federal judge has denied Michelin North America Inc.'s request for a preliminary injunction against Bandag Inc. and Bridgestone/Firestone Inc. in its ongoing antitrust lawsuit against the two companies.
The Greenville, S.C.-based tire maker had asked Judge Charles Wolle of the U.S. District Court for the Southern District of Iowa to block Bandag and BFS from jointly performing activities that allegedly prevent Michelin's growth in the retread market. The court denied on May 4 Michelin's request for an injunction. A Michelin spokeswoman said Michelin will continue its preparations for a January 2002 jury trial.
``Michelin believes it has strong evidence supporting its case,'' said John Rice, COO of Michelin Americas Truck Tires. ``We're simply asking that both fleets and dealers have free and fair opportunity to choose, and we believe when the case goes to trial, we will prevail.''
The court determined that Michelin had not adequately demonstrated a threat of irreparable harm to support a preliminary injunction.
The court also had concluded that it was likely that Bandag and Bridgestone would encounter significant harm if the motion were granted because it would ``hinder free discussion and lawful cooperation and may detrimentally affect the companies' customers,'' according to Bandag.
``We are pleased with the court's ruling, which we believe is fair and in the best interests of an open, competitive marketplace that benefits trucking customers,'' said Martin Carver, Bandag chairman and CEO. ``This decision means we can continue competing for business and supporting our network of Bandag franchised dealers.''
Bridgestone/Firestone also commended the court's decision and reaffirmed its position that any alleged injuries suffered by Michelin are ``a result of normal competition for increased market share, not injuries caused by any violation of federal laws governing competition.''
The Nashville, Tenn.-based tire maker said that Judge Wolle had noted in his ruling that at hearings held April 16-17 no customers or distributors spoke in support of Michelin's position. The customers who testified said they had rejected Michelin's retreading system on its merits.
BFS pointed out the judge's observation that the record ``suggests that Michelin retread products and services are flawed and not as satisfactory'' as those offered by competitors.
``If Michelin is experiencing difficulty in the marketplace, it has been the result of distributors and customers weighing the merits of competing products and then freely deciding to reject Michelin's retreading system,'' said Christine Karbowiak, BFS vice president of public affairs.
Michelin ``welcomes the opportunity'' for customers to compare its retreads with BFS' Oncor retreads or any other competitors', the Michelin spokeswoman said. The tire maker, she said, is seeking ``the fair opportunity to compete in an environment free of collusion and unlawful incentives. Michelin will stand on its quality reputation and will let Bridgestone/Firestone do the same.''
The injunction request is part of litigation between the three companies that began in 1999 when Bandag charged Michelin with attempting to eliminate it as a retread competitor. Michelin countersued, claiming Bandag was engaged in monopolistic practices.
In January, Michelin named BFS to the suit, alleging the tire maker and Bandag ``conspired'' to hinder Michelin's growth in the retread market by offering retreaders financial incentives to sign long-term Bandag franchise agreements and to not adopt Michelin's retread system.