Skip to main content
EVENT TRACKER
Keep track of rescheduled, canceled industry events with our COVID-affected event tracker - Powered by Snap Finance
Close
Sister Publication Links
  • Rubber & Plastics News
  • European Rubber Journal
tb-logo
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • OPINION
    • CORONAVIRUS
    • AUTO INDUSTRY
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • FACTORY FIXES
    • GOVERNMENT & LAW
    • INTERNATIONAL
    • MOTOR SPORTS
    • NEW PRODUCTS
    • RETAIL TIRES
    • SERVICE ZONE
    • SEMA/AAPEX
    • SMALL BUSINESS
    • TIRE MAKERS
    • SPONSORED CONTENT
    • Titan to offer free COVID-19 vaccines at Iowa facility
      Bridgestone hosts vaccination events for plant employees
      Cioffi: Will remote working be the new normal?
      Bridgestone Iowa plant navigates pandemic, demand
    • Conti adding dynamic driving simulator at German R&D center
      Yokohama gains OE fitments on BMW, Mercedes-AMG sport utilities
      SEMA picks site in Michigan for 2nd SEMA Garage
      Online retailer CARiD.com looks to triple size of tire/wheel installer network
    • Goodyear goes retro for 'Throwback' NASCAR race at Darlington Raceway
      Keter to expand NeoTerra SKUs through mid-2022
      Federal approved as 5th Formula Drift tire supplier
      Falken, Ohtsu tire prices rising May 1
    • JK Tyre adds radial truck tires to U.S. portfolio
      Mitchell 1 enhances ADAS info access in TruckSeries software
      Apollo isn't planning U.S. plant — yet
      Tire Business livestream to focus on commercial tire industry
    • New York chipping in $3M+ toward Sumitomo factory expansion
      SBA extends and expands COVID-19 loan program
      Stimulus spending should help tire industry
      U.S. agro-science firm gets $1M grant to research sunflower latex
    • Keter to expand NeoTerra SKUs through mid-2022
      Nexen touting manufacturing quality milestone
      Japanese R&D cooperative claims breakthrough in sustainable butadiene sourcing
      Guizhou Tyre starts production at Vietnam plant
    • Goodyear goes retro for 'Throwback' NASCAR race at Darlington Raceway
      Federal approved as 5th Formula Drift tire supplier
      Maxxis offers discount to ChampCar competitors
      Michelin strikes supply deals with new Canadian racing series
    • Bosch adds 22 aftermarket parts in Q1
      Snap-On introduces TreadReader handheld tire scanner
      Vogue Tyre introduces ‘biggest, boldest' red stripe tire
      Cooper adds Rugged Trek all-terrain to Discoverer LT/SUV tire line
    • Epicor service estimator to offer access to TireConnect by Bridgestone
      JK Tyre adds radial truck tires to U.S. portfolio
      Apollo isn't planning U.S. plant — yet
      Telle Tire expands footprint with JBC Tire acquisition
    • Bosch adds 22 aftermarket parts in Q1
      Marinucci: Detailed instructions will save time
      Bartec introduces TPMS software updates
      Snap-On introduces TreadReader handheld tire scanner
    • SEMA picks site in Michigan for 2nd SEMA Garage
      SEMA touts expanded Las Vegas Convention Center ahead of 2021 expo
      TIA seeking nominations for Tire Industry Hall of Fame
      SEMA survey shows resilient auto aftermarket in 2020
    • SBA extends and expands COVID-19 loan program
      Stimulus spending should help tire industry
      Giti disputes report blasting tire maker for accepting PPP funds
      SEMA survey shows resilient auto aftermarket in 2020
    • Last Mile: Delivery surge raises demand for medium truck tires
      Nexen touting manufacturing quality milestone
      Apollo isn't planning U.S. plant — yet
      Apollo lands: Tire maker brings commercial portfolio to N.A.
    • Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
      Sponsored By Yokohama Tire Company
      Stocking Tires for Crossover SUVs
      Sponsored By AppointmentPlus
      Three Important Lessons Learned for the Tire Business During a Pandemic
      Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
  • SHOP FLOOR
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Video: Balancing Tire
      An introduction to wheel balancing
      Wheel weights: Balancing form with function
      Choosing the right balancing equipment
    • Video: Demounting
      An introduction to demounting, mounting and inflation
      Staying safe when demounting and mounting tires
      Demounting Equipment
    • Video: Safety
      Introduction: Creating a culture of safety
      Protecting your people with proper hygiene
      Making friends with OSHA
    • Video: Tire Repair
      An introduction to tire repair
      How to properly patch a puncture
      Tire repair: Shining a light on visual inspections
    • Video: TPMS Service
      An introduction to TPMS service
      The importance of proper relearn procedures
      Decoding sensor data for TPMS diagnosis
    • Video: Training
      Intro: Finding and training technicians
      Shop Floor: Scholarships
      Advantages of apprentice program partnerships
    • Video:Vehicle Lifting
      An introduction to lifts and lift safety
      Recommendations for using a jack
      Jack stands for commercial tire service
    • Video: Wheel Torque
      Introduction to proper wheel installation
      Torque check and recheck recommendations
      Using torque sticks to speed service times
  • Multimedia
    • VIDEOS
    • PHOTOS
    • PODCASTS
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Data
    • DATA STORE
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
  • ADVERTISE
  • DIGITAL EDITION
  • Awards
    • Tire Dealer Humanitarian Award
MENU
Breadcrumb
  1. Home
  2. News
February 28, 2002 01:00 AM

Dealer charging supplier with fraud

Vera Fedchenko, Tire Business staff
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    JASPER, Ga. (Feb. 28, 2002)—A Georgia tire dealer is suing Cheng Shin Rubber USA Inc. for alleged price discrimination, breach of contract and fraud.

    Cheng Shin does business in North America through its Maxxis International unit in Suwanne, Ga.

    Joey Roland, owner of Jasper-based Discount Tire and Parts Inc., claims that Cheng Shin promised him that his dealership would become the sole distributor of Maxxis tires in northern Georgia. But then the tire maker signed a contract awarding exclusive distribution rights in that area to Doraville, Ga.-based Tri-State Tire Co.

    Mr. Roland also alleges Cheng Shin violated the Clayton Antitrust Act—which is known as the Robinson-Patman Act—by discounting prices to Tri-State Tire and other large distributors without offering the same price breaks to Discount Tire.

    The dealer's lawsuit was filed Jan. 29 in the Superior Court of Fulton County, Ga. Cheng Shin declined to comment on the allegations, saying it does not comment on pending litigation, according to attorney Allen Groves of Atlanta-based Seyfarth and Shaw.

    The lawsuit states that on Feb. 6, 2001, two Cheng Shin sales agents, Brad Williams and Greg Rauth, visited Discount Tire's office and solicited the dealership to become a distributor of Maxxis tires. Relying on promises made by Cheng Shin that Discount Tire would receive exclusive territorial rights to all Georgia counties north of Pickens County, Mr. Roland said he went ahead and purchased a container load of Maxxis tires, then hired a salesman and purchased office equipment to begin a wholesale operation.

    His dealership, consisting of one location in Jasper, was involved only in the retail and commercial tire business at the time.

    Mr. Roland said Cheng Shin told him that a container of tires would take 65 days to arrive from China. In the meantime, the tire company would draw up a written contract and protect Discount Tire's distribution area, Mr. Roland claimed. At the end of the year, Cheng Shin would evaluate how many tires Discount Tire sold and establish a quota.

    But Cheng Shin allegedly had signed a contract that gave exclusive distributorship of the area promised to Discount Tire over to Tri-State, according to the lawsuit, although the company continued to assure Mr. Roland through October that Discount Tire would get that same territory. Mr. Roland claimed he learned of this agreement when a customer said Tri-State was the only legal entity that could sell him Maxxis tires.

    The suit further alleges that when Mr. Roland learned of this agreement, he confronted Mr. Rauth, who supposedly advised him “that no company in Georgia had a written contract” and that Cheng Shin was preparing the written contract that would solidify the two companies' oral agreement. As a result, Discount Tire relied upon these alleged misrepresentations and purchased additional quantities of Maxxis tires.

    Discount Tire finally was informed by Cheng Shin that the dealership would receive exclusive rights only to Pickens County. However, Mr. Roland told Tire Business that Cheng Shin then raised prices on his tires by 5 percent because he “was in the way” of Cheng Shin's agreement with Tri-State and other distributors.

    The lawsuit also contends that Cheng Shin discounted prices to Tri-State and other large distributors, intending “to injure” Discount Tire and lessen competition.

    Mr. Roland said he believes price discrepancies are rampant throughout the tire industry, but he feels he needs to stand up for his business and other dealers facing pricing pressure.

    “I'm not just doing this for me,” he said. “It's something that needs to be done for the tire industry, so that (small dealers) can make a profit on tires.”

    He noted that he sold the first container of Maxxis tires successfully and ordered two more in November. Discount Tire also is now wholesaling Aurora tires made by Hankook Tire America Corp.

    The dealership is seeking $5 million in punitive damages, actual damages to be decided by the court and attorney's fees.

    Mr. Roland founded his company in 1983 at the age of 18. It employs 11 and posted $1.4 million in sales in 2001. Of that total, $200,000 came from the company's wholesale operation.

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    tb-logo
    Reader Services
    • Contact Us
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber & Plastics News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • CORONAVIRUS
      • AUTO INDUSTRY
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • FACTORY FIXES
      • GOVERNMENT & LAW
      • INTERNATIONAL
      • MOTOR SPORTS
      • NEW PRODUCTS
      • RETAIL TIRES
      • SERVICE ZONE
      • SEMA/AAPEX
      • SMALL BUSINESS
      • TIRE MAKERS
      • SPONSORED CONTENT
    • SHOP FLOOR
      • BALANCING
      • DEMOUNTING
      • SAFETY
      • TIRE REPAIR
      • TPMS
      • TRAINING
      • VEHICLE LIFTING
      • WHEEL TORQUE
    • Multimedia
      • VIDEOS
      • PHOTOS
      • PODCASTS
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Data
      • DATA STORE
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
    • ADVERTISE
    • DIGITAL EDITION
    • Awards
      • Tire Dealer Humanitarian Award