Spain: The Supreme Court rules on the first appeals on the follow-on actions arising from the truck cartel

España - 
Diego Vicente, Rubén Magallares y Antonio Fabregat, del área de Resolución de Conflictos de Garrigues

In the fifteen rulings, the High Court clarifies some questions about the case, although we will have to be attentive to its position in relation to the following pending appeals.

On 13, 14 and 15 June, the First Chamber of the Supreme Court (SC) handed down 15 judgments (the SSTS) ruling on the first extraordinary appeals filed in relation to claims for damages arising from the conduct sanctioned by the European Commission's decision of 19 July 2016, in the context of Case AT.39824 - Trucks (better known as the truck cartel).

The Supreme Court has ruled on the "first wave of claims for this cartel in Spain", confirming the rulings of various provincial courts which, based on the specific characteristics of the cartel, came to the conclusion that it could be presumed that there was damage in the form of a overprice for truck purchasers during the cartelised period and, in the absence of certain proof of its quantification for the specific cases analyzed  (or of refutation of the existence of such damage by the defendants), the Supreme Court judicially estimated such damage at 5% of the purchase price of the truck.

1. Background

The origin of this case lies in the European Commission’s Decision of 19 July 2016, the European Commission issued a Decision in Case AT.39824 - Trucks, in which it acknowledged a series of facts constituting collusive practices in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU) by five truck manufacturers and ten subsidiaries of some of them (MAN, DAF, IVECO, DAIMLER, MERCEDES and VOLVO/RENAULT). These conducts, according to the Decision, consisted, in summary, in: (i) exchanging information and making agreements regarding prices and gross or list price increases for medium and heavy trucks in the European Economic Area; (ii) agreeing on delays in the introduction of new emission reduction technologies required by the EURO III to EURO VI standards; and (iii) agreeing in a coordinated manner to pass on to their customers the costs arising from the introduction of these technologies.

As a result of this, after the publication of a summary of the Decision in the Official Journal of the European Union on 6 April 2017, thousands of follow-on actions (or consecutive lawsuits) based on the Decision began to be filed progressively in Spain (to date, more than 2,200 judgments have been handed down at second instance by provincial courts in relation to more than 12,250 cartelised trucks, according to data from Professor Francisco Marcos).

2. Main conclusions of the judgments handed down by the Supreme Court

Without wishing to condense all the analysis that the First Chamber of the Supreme Court carries out in its 15 judgments -which is beyond the scope of this commentary-, the following is a summary of the most relevant conclusions that can be drawn from them:

a. On the Statute of Limitations

First, the Supreme Court has ruled in several judgments (see, for example, STS 2473/2023) on the Defendants' plea of prescription. Following the criterion of the CJEU Judgment of 22 June 2022 (C-267/20, Volvo/DAF), which resolved the preliminary question raised by the Provincial Court of León on the applicable statute of limitations applicable to the claims based on the truck cartel, the SC concluded that the dies a quo for calculating the limitation period for an action for damages arising from the specific truck cartel was the date of publication of the Decision of the European Commission in the OJEU (6 April 2017) and that, consequently, the limitation period for the action for damages arising from that specific cartel must be the 5-year period provided for in Article 74.1 of the Competition Law (applicable to a legal situation that was still in effect at the time the Damages Directive was transposed); it therefore concludes that the actions arising from the Decision cannot be considered time-barred.

b. The existence of damage to the purchasers of trucks resulting from the conduct sanctioned by the Decision.

Secondly, the Supreme Court analyses the possible infringement by the provincial courts of the rules of the burden of proof and presumptions (in the case of appeals for procedural infringement), and of Article 1902 of the Spanish Civil Code (in the case of appeals in cassation), as it has been wrongly presumed in the judgments handed down by that provincial courts - according to the appellants - the existence of damage derived from the conduct sanctioned by the EC.

The conclusions reached by the Court are as follows:

  • The judgments declare that, although it is true that the Decision –in sanctioning an infringement of competition law by object– does not analyse the effects caused by the collusive practices, it can be concluded (by application of a judicial presumption) that the truck cartel caused an overcharge to those who purchased trucks during the period affected by such cartel. In this respect, the Supreme Court rejects the appellants' criticisms of the judgments of second instance, stating that the latter do not state that: "simply because it is a cartel, it must be presumed to have caused damage, namely an unlawful increase in the price of the trucks affected by the cartel", but that "it was the specific and significant characteristics of this cartel which allowed the Provincial Courts to presume the existence of damage".
  • Specifically, the SC points out that the circumstances pointing to this conclusion were: (i) that the sanctioned truck manufacturers had a very high market share; (ii) that the period of duration of the conduct was very long (14 years); and, especially, (iii) that the collusive agreements not only included the exchange of commercially sensitive information, but that the information exchanged related to prices and that, in addition, they also included, in certain periods, the discussion and agreement on "fixing and increasing gross prices".
  • Furthermore, the SC concludes that it does not preclude the above conclusion that discounts could have been applied to certain purchasers of trucks. Because, even if this could have happened, it is reasonable to consider that such discounts would also have existed in the absence of the anti-competitive infringement and that, since gross or list prices have been artificially increased, any discount applied on those gross prices would have resulted in a net price that would also be artificially high as a consequence of the cartel, in the sense that it would include a surcharge (the so-called "tidal effect" referred to in the Amsterdam District Court's judgment of 12 May, 2021, which the Supreme Court judgments expressly cite).

c. On the infringers’ refutation of the existence of damage resulting from the conduct sanctioned.

Thirdly, some of the Supreme Court judgments (see, for example, judgment 2480/2023), rule on the reasonableness of the conclusion reached by the lower courts in relation to the fact that the defendants had not managed to rebut the judicial presumption of the existence of damage derived from the conduct sanctioned by the Decision.

At this point, it should be noted that –given that the cases analysed by the High Court corresponded to the first wave of the truck cartel-related claims– only one of the defendant manufacturers had at its disposal at that time an econometric expert report aimed at proving that the sanctioned conduct did not result in damage in the form of overcharging the purchasers of the trucks sold by that manufacturer.

With regard to the specific cases in which the manufacturer had actually provided an econometric report for such purpose, the Supreme Court confirms the lower courts' conclusion that the report cannot be considered to have rebutted the aforementioned judicial presumption of the existence of damage. In this latter regard, two issues are relevant to highlight. On the latter point, it is important to highlight two issues:

  • Firstly, the SC is crystal clear in establishing that the defendants' expert report cannot be rejected - not even on a theoretical level - merely because it reaches the conclusion that in this specific report there was no overpricing in the acquisition of the trucks, nor because it is based on the sales data of the infringers. Specifically, the Supreme Court states as follows:

"It is clear that the mere fact that an expert opinion on anti-concurrence damages, in respect of a specific transaction, may result in the quantification of the damage with a very low value, or even with a value of 0, cannot in itself automatically disqualify its evidentiary effectiveness. This would be tantamount to denying the possibility of proving that in a specific case there may not have been any damage. In other words, it would mean assuming a priori that the cartel at issue has caused harm in 100% of the cases. Nor can it be argued that an expert report on the assessment of damages resulting from anti-competitive infringements is deprived of evidentiary effect because most of the data used come from internal sources of the defendant (as the party responsible for the collusive practices)".

  • However, the SC considers that what does compromise the evidentiary effectiveness of the specific expert opinion provided in those two specific appeals is: (i) the fact that the time series of the data used in those reports did not cover the entire time period of the conducts (specifically, in the case decided by judgment 2480/2023, they would only cover the period 2003-2016, when the cartel would have covered the period 1997-2011); and (ii) the fact that these reports did not contain an analysis of whether the period immediately after the end of the infringement could not have been affected by the anti-competitive conduct and to what extent this could have affected the data immediately after the infringement considered in indicated reports.
  • This would prevent, according to the SC, the provincial court's decision to deny evidentiary effect to those specific expert reports of the defendants analysed in the appeal judgments from being considered unreasonable or arbitrary.

d. On the quantification of the damage, and the possibility of recourse to its judicial estimation.

Having said this, the SC went on to analyse the appellants' complaint in relation to the insufficient evidence in the expert reports provided by the appellants to quantify the damage, the impossibility –according to the appellants– of resorting to the power of judicial assessment of such damage in the cases specifically analyzed, and the arbitrariness in which, according to the appellants, the judgments of first instance would have incurred by setting the compensation to be received by the appellants at 5% of the purchase price.

In this regard, the judgments begin by stating that, for the reasons stated up to this point, the High Court considers that it is proven that the truck cartel caused damage (in the form of overpricing in the purchase of trucks). However, it considers that in view of the plaintiffs' expert reports (essentially based on meta-studies and considered inadequate in the lower court to quantify the damage), there is insufficient proof of the amount of the overpricing.

In that scenario, the SC concludes that:

  • The judgment of the CJEU of 16 February 2023 (C-312/21, Tráficos Manuel Ferrer), which rules on the scope of the power of judicial assessment of the damage (on which we rule here), establishes that this power may be used in cases of impossibility or excessive difficulty of proving and quantifying the damage that is not attributable to an evidentiary inactivity of the plaintiff.
  • In the case analysed, the SC concludes that it is indeed very difficult to project a counterfactual scenario and to determine a precise quantification of the damage actually suffered.
  • In line with the above-mentioned judgment of the CJEU, it concludes that the mere fact that the plaintiffs did not request access to sources of evidence is not in itself sufficient to impute such undue hardship to an evidentiary inactivity of the plaintiff (citing on this point, in fact, the judgment of the Competition Appeal Tribunal (CAT) in the Royal Mail/BT case, where, even though there was a very exhaustive documentary exhibit, the court ended up making a judicial estimate of the damage in the form of an overcharge of 5% of the price of the trucks).
  • Continuing with the reasoning -and probably one of the most relevant points of the judgments-, the SC concludes that in order to assess whether or not the absence of a precise quantification of the damage was due to the claimant's evidentiary inactivity, the court must place itself "at the time when the claim was filed, so as not to fall into a retrospective bias".
  • In so doing, the SC notes that the claims from which these first appeals derive correspond to the "first wave" of claims for damages arising from the truck cartel, when the criterion that has subsequently become widespread in various courts and provincial courts was not yet widespread, and according to which consecutive claims for damages arising from competition infringements based on an expert report that is not only unconvincing, but which due to its excessive simplicity (such as relying solely on generic reports and meta-studies on cartels in general) does not even constitute a serious and reasonable evidential effort, must be rejected. Furthermore, the Supreme Court judgments also recall that, at the time when the lawsuits that gave rise to the proceedings in which the appeals analysed by the High Court were filed, there was a consensus that the limitation period would be one year, which is a further element to be considered in relation to the urgency with which the first truck cartel lawsuits and the expert reports accompanying them were filed.
  • Based on these specific circumstances, the SC considers that in the cases under appeal, and despite the lack of rigour of the expert reports provided by the plaintiffs in those first cases, the decision of the lower courts not to dismiss the claim and, instead, to resort to the power of judicial assessment of the damage in order to give rise to a partial assessment of the first claims, is a legally sound decision.
  • Specifically, in view of the specific characteristics of the truck cartel, the SC considers that the estimate of the damage of 5% made by the provincial courts is reasonable, provided that the plaintiff does not sufficiently prove in each specific case that the damage was greater than 5%, or that the defendant proves that it was less than 5% (neither of which would have occurred in the specific cases that have been the object of the appeals analysed by the High Court).

e. On interest

Finally, the SC considers that legal interest must be paid to the plaintiffs from the moment when the damage actually occurred (i.e. with the payment of the price of the overpriced truck). 

3. Other relevant considerations

In addition to the above, we believe that there are three specific issues included in some Supreme Court judgments that are relevant:

a. On passive standing, and the principle of economic unity

Firstly, in several of the judgments, the High Court ruled on the alleged lack of passive standing of certain defendants, on the grounds that they were not the object of a sanction by the Decision (but rather parent companies of the manufacturers actually sanctioned). The SC ruled, on the basis of the European Union Court of Justice judgment of 6 October 2021 (C-882/19, Sumal), that those companies would have standing to bring proceedings in the specific case, given that "in the context of an action for damages based on the existence of an infringement of Article 101 TFEU (...) a legal entity which has not been penalised by the Decision (...) is not entitled to bring proceedings for the infringement of Article 101 TFEU (...) but is entitled to bring proceedings for the infringement of Article 101 TFEU (...).) a legal entity which has not been designated in that decision as the author of an infringement of competition law may nevertheless be held liable on that basis on account of the infringing conduct of another legal entity if those two legal entities form part of the same economic unit and thus constitute an undertaking, which is the author of the infringement within the meaning of Article 101 TFEU”.

That is: the CJEU applies the doctrine of economic unity laid down by the CJEU in Sumal to conclude that, in the truck cartel cases analyzed in the appeals, the provincial courts were right to extend liability to the above-mentioned parent companies.

b. On the imputation of liability to infringers according to the period of participation in the cartel

Secondly, several Supreme Court judgments (vid. STS 2480/2023) analyse a defence argument of the appellants –concomitant with the previous one– consisting of maintaining that it would be a basic principle of our legal system that joint and several liability is only enforceable, in cases of anti-competitive infringements such as the ones in question, against those parties that have coincided in time with the other parties directly responsible for the damage on which the joint and several liability is based (i.e. that each infringer can be claimed for the damages caused by other infringers, but only in relation to the period of participation of each defendant).

Specifically, the case analysed by judgment 2480/2023 is the following: (i) one of the companies to which the Decision was addressed was held liable for the conduct sanctioned in its capacity as the parent company of two of the other companies sanctioned, a position it held for a period of only 18 days (1 to 18 January 2011); and (ii) the truck in question was acquired outside that period.

The Court, in ruling on this question, makes two assessments:

  • First, that the parent company in question “could be sued as jointly and severally liable for damages incurred during the time it participated in the cartel from 1 to 18 January 2011”.
  • Second, in addition to the foregoing, in so far as that parent company is also the successor of another company in the same group of companies sanctioned by the decision, it is also liable “as the successor of another previous company which disappeared as a result of the structural modifications” which took place within its group of companies.
    Accordingly, the High Court concludes that that company would also be liable for the potential damage suffered by the purchasers of the trucks in relation to the period prior to 1 January 2011, albeit in this case not directly in its capacity as the parent company of two of the undertakings penalised by the decision, but in its capacity as the successor of that other company which, in turn, was also the parent company of two of the undertakings penalised by the Decision.

From the above reasoning, the SC's joint application of the doctrine contained in Sumal and Skanska is relevant: (i) the former, to extend to a parent company (not directly sanctioned by the Decision) the liability arising from the anti-competitive wrongdoing of its sanctioned subsidiaries; and (ii) the latter, to impute such liability also to the successor of that defunct parent company.

It is also significant that the Supreme Court seems to take it for granted that, indeed, the general principle that should govern in this type of claims arising from antitrust infringements (as, in our opinion, the Provincial Court of Madrid and the Provincial Court of Barcelona have already had the opportunity to declare in relation to the envelope cartel) is that an infringer sanctioned for anti-competitive conduct will be jointly and severally liable for all damages caused by the cartel, but only for the period in which that infringer participated (together with the other infringers) in the anti-competitive conduct.

Therefore, if this liability is to be extended beyond the period of participation of the infringer, other means of imputation of liability must be used (other than strictly the existence of joint and several liability) which, depending on the specific circumstances, may be applicable, as occurred in the case decided by the aforementioned judgment 2480/2023, insofar as the SC considered the doctrine of succession of companies and economic unity in antitrust matters to be applicable to the case.

c. About passing-on

Finally, in the aforementioned STS 2480/2023 (among others), the SC ruled (partially) on the defence argument of "passing-on", or the possible repercussion of the damage by the plaintiff, which was raised in a cassation appeal filed by a plaintiff who aspired to obtain a compensation higher than 5% (and who questioned the decision of the provincial court to admit the aforementioned repercussion).

In that regard, the High Court points out that, contrary to what the appellant (the purchaser of the truck) maintains, the Provincial Court did not actually accept the application of the passing-on doctrine to the case, and that what is actually happening is that the appellant was confusing "the notion of a reduction in the amount of the damage on account of passing-on (which the Court did not do), with the reduction of the overall amount of the price of the trucks, as a basis for calculating the damage, in order to fix it at the part of that price which, after a full assessment of the evidence, he considers that the plaintiff actually paid (which is what the Court did do)".

That is, the Court concludes in that judgment  that it is not that "the Court reduced the amount of the damage because it understood that part of the extra cost was passed on by the defendant in the form of an increase in the price of its services to its clients, but rather because it did not assess the extra cost of a part of the price that it considered had not been effectively paid or borne by the plaintiff (by reducing the agreed resale price from the purchase price)".

4. This first wave is just the beginning

In short: there are many –and highly relevant– issues on which the Supreme Court ruled in the first fifteen judgments handed down in relation to the truck cartel on 13, 14 and 15 June 2023.

That said, it is important to bear in mind that many of the conclusions of these judgments are predicated not only on the particular circumstances of the truck cartel, in particular, on the specific circumstances of the specific claims being decided in these judgments (the first wave of trucking cartel claims), and on the state of antitrust litigation at the time these first claims were filed.

This will make it necessary to be attentive to the position of the Supreme Court in relation to the following appeals pending before it (whose claims no longer belong to that first wave), and consequently what standards the Supreme Court will apply to the exercise of follow-on actions in a more advanced state of antitrust litigation, such as the one that has been progressively acquired in our country since 2017, with the successive waves of claims of the truck cartel that followed the first one that the Supreme Court has just resolved (with the successive litigation of damages from other cartels than the truck cartel that, likewise, have been falling on our commercial courts since then).