In re Dealer Mgmt. Sys. Antitrust Litig.

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IN RE DEALER MANAGEMENT SYSTEMS ANTITRUST LITIGATION, MDL 2817 This document relates to: CDK's Counterclaim against AutoLoop

No. 18-cv-864

United States District Court, N.D. Illinois, Eastern Division

June 29, 2023

MEMORANDUM OPINION AND ORDER

REBECCA R. PALLMEYER UNITED STATES DISTRICT JUDGE

Plaintiff/Counter-Defendant Loop, LLC (“AutoLoop”) sells software to car dealerships to help those dealerships market, sell, and service their vehicles. In a consolidated set of cases AutoLoop and other plaintiffs-including car dealerships and dealership management system (“DMS”) data integrators-have sued two DMS providers alleging antitrust violations. Defendant/Counter-Plaintiff CDK Global, LLC (“CDK”) is one of those DMS providers. CDK has responded to the complaint of anticompetitive conduct with counterclaims, including a claim that AutoLoop is in breach of a contract it signed with CDK. AutoLoop has moved for summary judgment on this claim and, for the reasons explained here, the motion [949] is granted.

BACKGROUND

The court has detailed the facts of this MDL in multiple opinions and assumes knowledge of those opinions.^[1]Here, the court summarizes only the facts material to CDK's counterclaim against AutoLoop.

AutoLoop sells software that car dealerships use to manage their inventories, customer relationships, and service and repair departments. (AutoLoop's Statement of Material Facts (“PSOF”) [950] ¶ 2.) AutoLoop's software works only if AutoLoop has access to data stored on dealers' DMSs, such as customer records and information about upcoming service and repair orders. (Id. ¶ 2.) Historically, AutoLoop used the services of a data integrator called Superior Solutions, Inc. (“SIS”) to obtain access to that data, including data stored on CDK's DMS. (Id. ¶ 8.) But after receiving indications from dealerships that CDK's leniency toward independent data integrators was waning AutoLoop contracted with CDK for direct access to CDK's DMS.^[2](See id. ¶¶ 9, 10.) Specifically, in 2016, AutoLoop entered into a Managed Interface Agreement (“MIA”) with CDK in order to obtain access to data stored on CDK's DMS through CDK's own data integration program, which is called 3PA.^[3](Id. ¶ 10.) At issue on this motion is section 1(f) of the MIA, which by its terms prohibits AutoLoop from receiving any data sources from CDK's DMS outside the 3PA program. (Defs.' Joint Statement of Additional Material Facts (“DSOAF”) [1062] ¶ 114; Pl.'s Resp. to DSOAF (“DSOAFR”) [1139] ¶ 114.)

In addition to AutoLoop's software, many dealers use vAuto, an inventory analytics application that Cox Automotive sells to dealers. (See PSOF ¶ 17.) vAuto obtains data from many sources, including Autotrader.com and Cars.com, and, sometimes, from CDK's DMS; like AutoLoop, Cox Automotive also participates in CDK's 3PA program. (Id. ¶ 18; Def.'s Resp. to PSOF (“PSOFR”) [1059] ¶ 18; DSOAF ¶ 122.) Dealerships use vAuto to store data including accurate pricing information and images of their vehicles for marketing materials. (See Dep. of Matt Rodeghero, Ex. 7 to PSOF [950-8] at 128:1-129:23.) The inventory information that dealers store on vAuto includes some information that one could obtain from CDK's DMS-such as vehicle identification numbers-but also includes data that is not available on the DMS, such as up-to-date pricing information, vehicle images, and videos. (PSOF ¶ 20 (citing testimony that vAuto “standardly store[d] information in vAuto that [dealers] do not store or maintain in CDK[‘s DMS]”).) vAuto allows dealers to send inventory data stored in vAuto to other applications (see PSOF ¶ 19; PSOFR ¶ 19), and vAuto does not track what each vendor does or does not do with the data it provides (DSOAF ¶ 130). On April 28, 2017, CDK sent an email to Cox Automotive in which CDK referred to the MIA's restrictive language and objected to vAuto's practice of sending inventory data to third parties. (Id. ¶ 129; see also Def.'s Add'l Ex. 504 [1065-36] at COX0112623.)

At some point-the parties do not specify when-several dealerships requested that AutoLoop obtain inventory data collected by vAuto. (PSOF ¶ 20; PSOFR ¶ 20.) As early as January 2018, AutoLoop began receiving a daily feed of inventory data (or a “data pull”) from vAuto to support AutoLoop's inventory-related application, which is called “Quote.” (DSOAF ¶¶ 120, 124.) In or about April 2019, AutoLoop received inventory data from vAuto for approximately 40 to 50 dealers who use CDK's DMS. (PSOF ¶ 16; PSOFR ¶ 16.) AutoLoop did not pay CDK an integration package fee for “at least some” of those dealers. (See DSOAF ¶ 127.) The extent of AutoLoop's purported transgression appears to have been relatively minor: with the possible exception of three dealers, each of the 40 to 50 dealers that asked AutoLoop to retrieve their inventory data from vAuto had already themselves paid CDK for inventory feeds through CDK's 3PA program. (PSOF ¶ 21.)

CDK now claims that AutoLoop breached Section 1(f) of the MIA by obtaining from vAuto “a daily feed of inventory data . . . to support AutoLoop's Quote application.” (Counterclaims [514] ¶¶ 2, 20-21; DSOAF ¶ 124.) CDK alleges that “the vAuto inventory data feed includes vehicle inventory data sourced from CDK's DMS.” (Counterclaims ¶ 20.) CDK claims that this conduct harmed CDK by allowing AutoLoop “to avoid paying CDK the integration fees that it would otherwise owe under the 3PA Agreement” and by impeding CDK's “ability to verify that each vendor in the program is using the data that it obtains for an approved end-use and with the dealer's express, written consent.” (Id. ¶ 24.) Under Illinois contract law, CDK seeks nominal damages, along with declaratory and injunctive relief. (See id. ¶ 29; CDK's Resp. to AutoLoop's Mot. for Summ. J. (“CDK Opp.”) [1056] at 8.)

AutoLoop moves for summary judgment on CDK's counterclaim on two grounds. First, AutoLoop argues that it is entitled to summary judgment because the record lacks evidence that vAuto sent AutoLoop data that vAuto retrieved from CDK's DMS. (Mem. in Supp. of AutoLoop's Mot. for Summ. J. [951] at 6-8.) Second, AutoLoop argues that summary judgment is warranted on alternative grounds because the record lacks evidence of damages or the kind of injury that would justify entry of an injunction. (Id. at 8-11.)

DISCUSSION

Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A genuine issue of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The court draws reasonable inferences in favor of the nonmoving party, but “may not make credibility determinations, weigh the evidence, or decide which inferences to draw from the facts; these are jobs for a factfinder.” Johnson v. Rimmer, 936 F.3d 695, 705 (7th Cir. 2019) (quotation omitted). A party opposing summary judgment must go beyond the pleadings and “set forth specific facts showing that there is a genuine issue for trial.” Liberty Lobby, 477 U.S. at 250. Summary judgment is proper if the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Ellis v. CCA of Tenn. LLC, 650 F.3d 640, 646 (7th Cir. 2011) (quoting Celotex, 477 U.S. at 322).

I. Breach of Contract

AutoLoop met its initial summary judgment burden by noting the absence of any evidence that it had “materially breached” the MIA, because the record contains no evidence that vAuto obtained the data that it provided to AutoLoop from CDK's DMS. MMG Fin. Corp. v. Midwest Amusements Park, LLC, 630 F.3d 651, 657 (7th Cir. 2011). Undisputed evidence shows that vAuto obtains its inventory data from multiple sources. Generally, vAuto's data comes from the CDK DMS, dealer employees manually entering inventory data directly into vAuto, original equipment manufacturers (“OEMs”) who send vAuto inventory data, and vehicle listing services like Cars.com and Autotrader. (PSOF ¶ 18; DSOAF ¶ 123.) But with respect to the specific data at issue (the inventory data that vAuto sent to AutoLoop), there is no evidence in the record that vAuto drew that specific data from CDK's DMS.

To overcome AutoLoop's summary judgment motion, CDK must present evidence from which a reasonable jury could find that the inventory feeds vAuto sent AutoLoop in fact included data sourced from CDK's DMS. CDK has not presented a genuine factual dispute on this point. See Lime Crunch Inc. v. Johansen, No. 20 C 5709, 2022 WL 4607560, at *4 (N.D. Ill. Sept. 30, 2022) (“[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322)).

CDK's evidence shows in a general way that some of vAuto's data comes from the CDK DMS. (DSOAF ¶ 123.) To connect that showing to the specifics of its claim, CDK largely relies on the testimony of Brian Green, the Rule 30(b)(6) witness identified by Cox Automotive, the company that owns vAuto. Mr. Green testified that vAuto does not charge application vendors for inventory data that vAuto provides to the vendors, and that there also would be no charges if that inventory data came from a DMS. (Dep. of Brian Green, Ex. 8 to PSOF [950-9] at 116:1621.) CDK reads that testimony as evidence that the CDK DMS is the source of...