The Federal Trade Commission yesterday charged U-Haul International Inc. with illegally using "sham litigation" to monopolize the market for one-way moving equipment rentals.
U-Haul International, which provides accounting, technical and advisory services to the national system of independent U-Haul companies, pursued "a deliberate course of action to abuse the judicial process in order to injure a competitor," the FTC said in an administrative complaint filed yesterday.
Together, the U-Haul companies comprise the nation's largest renter of trucks, trailers and other equipment for private moving, a system with more than 64 percent of the market in 1983, the FTC said. Also named in the complaint was Amerco, the corporation that owns U-Haul International and most of the companies in the U-Haul system.
Amerco, based in Las Vegas, reported 1984 profits of $41.7 million on revenue of $626.2 million, and had assets of about $947.3 million at year end, the FTC said.
The FTC complaint begins a proceeding that will include a hearing before an administrative law judge, who will rule on the agency's allegations. The agency cannot seek monetary damages or penalties, and at most could obtain an order directing U-Haul to not commit similar violations in the future, an FTC spokeswoman said.
According to the FTC, U-Haul violated the antitrust laws by acting to disrupt the bankruptcy and reorganization proceedings of its rival, Jartran Inc., based in Miami.
U-Haul's legal actions during the proceedings were a "sham" because they were "intended primarily to delay or prevent Jartran's reorganization as a competitor," the FTC said.
A U-Haul spokesman said that company officials had not seen the complaint and could not comment.
Jartran emerged as a competitor to U-Haul in 1979, and by 1980 had gained about 10 percent of the market, "largely at the expense of U-Haul," the complaint said. But in December 1981, Jartran was acquired by an insurance brokerage firm and filed for protection from its creditors under Chapter 11 of the bankruptcy code.
In January 1982, U-Haul International filed a claim against Jartran for $375 million, based on an earlier suit charging Jartran with false and misleading advertising.
The FTC complaint alleges that U-Haul then used its standing in the bankruptcy proceedings to delay Jartran's reorganization. For example, U-Haul suggested Jartran reorganize by selling its assets to U-Haul, although U-Haul "knew or had reason to believe that such an acquisition would be illegal under the antitrust laws," the FTC said.
However, Jartran successfully emerged from Chapter 11 in September 1984, and is now a wholly owned subsidiary of Frank B. Hall & Co., based in Briarcliff Manor, N.Y., a Jartran spokesman said.