(CN) - Eaton Corporation faces a shareholder derivative suit for allegedly conspiring with manufacturers to create a monopoly on the heavy truck transmission market, exposing the firm to up to $800 million in damages on top of potential awards from additional liability suits.
     Eaton shareholder Richard Dunne filed suit against Eaton officers who allegedly participated in an "illegal scheme that caused the company to conspire with original equipment manufacturers (OEM)," including Freightliner LLC, International Tuck and Engine Corporation, PACCAR Inc., Volvo Trucks North America and Mack Trucks Inc.
     "Eaton conspired with the OEMs through the implementation of a series of exclusive dealing arrangements," the complaint states. "These arrangements were formed between Eaton and the OEMs to corner off the class 8 truck transmissions market from Eaton's competitors, specifically the company's biggest competitor ZF Meritor LLC. Eaton's effective but illegal anticompetitive conspiracy allowed the company to maintain and enhance its monopoly power."
     Meritor sued Eaton in 2006, claiming violations of the Sherman and Clayton Acts. In October 2009, a jury found the agreements with the OEMs constituted a "contract, combination or conspiracy that unreasonably restrained trade."
     Meritor wants more than $800 million in damages, which Eaton is currently challenging on appeal. According tot he complaint, the company has also amassed "enormous legal fees" defending itself against the charges. Meanwhile, other "market participants" have sued Eaton for damages arising from the monopoly, the complaint states.
     "The Individual defendants' breaches of fiduciary duties have exposed Eaton to hundreds of millions of dollars in potential liability for violations of state and federal law," the lawsuit states.
     Defendants include Eaton CEO Alexander Cutler, CFO Richard Fearon, and Eaton directors Deborah McCoy, Gregory Page, Ned Lautenbach, Gary Tooker, Michael Critelli, Christopher Connor, Charles Golden, Arthur Johnson, Todd Bluedorn, George Barrett, John Miller, Victor Pelson and Ernie Green.
     Plaintiff is represented by J. Stephen Teetor, Mark Landes and Mark H. Troutman of Isaac Brant Ledman & Teetor in Columbus and Douglas E. Julie of Levi & Korinsky in New York.