Attorneys Say DaimlerChrysler Denials on Redlining Suits 'Brimming With Inaccuracies'

'Opus of Denial' Falls Short in Explanation

CHICAGO, March 12 -- In a lawsuit claiming DaimlerChrysler (Chrysler) denied credit to customers based on race, attorneys for the plaintiffs today refuted claims in Chrysler's response to the suit released late Monday.

According to Steve Berman, the attorney representing six named plaintiffs in the proposed class action, Chrysler's response to the lawsuit omits crucial facts. "The response to the charges leveled in the suit is absolutely brimming with inaccuracies."

The suit, filed in U.S. District Court in Illinois on Feb. 3, claims Chrysler management systematically and intentionally denied low-interest vehicle financing to creditworthy blacks in two Chicago neighborhoods, based on the neighborhood in which they lived and the dealership they selected to purchase the car. The suit also contends that the practice continues today in the Chicago area and Chrysler's Illinois sales zone.

Among the other claims, Chrysler stated Monday that financial mismanagement and poor financial health at the dealership level was the reason minority customers were denied financing at two Chicago-area dealerships. However, according to attorneys, Chrysler sales documents consistently show the dealerships in question to be among Chrysler's most successful.

"Even beyond the sales numbers, Chrysler awarded Gerry Gorman, the owner of the dealerships, with a letter lauding his overall performance as a dealer, declaring his operation the '#2 Dodge dealer in the world,'" Berman noted.

Berman also called into question Chrysler's claims of seriously reviewing and investigating the charges. "In their opus of denial released yesterday, Chrysler seemed to be talking out of both sides of their mouth, first saying they take the charges seriously, and then dismissing them out of hand," Berman said.

"We have a simple solution to the issue: bring forward the people that the complaint names as being present when Chrysler's zone manager let loose with his racial invectives," Berman said.

In a similarly confusing rash of contradictions, Chrysler first said the Automated Credit Evaluation system (ACE) could not be jerry-rigged to allow Chrysler to redline, then reversed its position, Berman noted.

According to a published report, when asked whether the electronic credit system could be used to redline dealerships that serve mainly minority customers, Martin Geers, a spokesman for DaimlerChrysler Services said: "Yes, that is possible."

According to Berman, perhaps the most outrageous of Chrysler's claims is that Gorman's dealership was providing false information to Chrysler in an attempt to win credit approval through the ACE system.

"We show in our complaint that Chrysler's zone manager claimed that there was fraud involved, but at Chrysler Financial headquarters," Berman noted.

According to the complaint, the Chrysler zone manager told Gorman and others that it was his opinion that sales contracts had been accepted and bought by Chrysler because an African-American credit analyst at Chrysler's regional headquarters manipulated the computer system in order to get the deals approved.

The complaint states that the zone manager told Gorman "Our nigger ... was manipulating our computer system to get these niggers bought [meaning, to get their financing approved]. I've fired our nigger and I want you to fire your niggers ..." (par. 77)

According to Gorman, when he suggested to the zone manager that Chrysler contact the authorities regarding the possibility of fraud within Chrysler headquarters, the zone manager refused this suggestion and explained that the insurer for the loss would be Chrysler Insurance Company and, thus, any claim would only shift the loss from Chrysler Financial to Chrysler Insurance.

Startlingly, the complaint goes on to state that the zone manager thought he could never get a fraud conviction against his African American credit analyst due to the likely racial make up of any Cook County jury, and explained that Chrysler did not carry insurance for "nigger fraud." (par. 92)

"We intend to show that senior level Chrysler officials knew about and tolerated discriminatory remarks and practices," Berman said.

The class-action suit seeks damages related to civil rights violations and the paying of higher interest rates by plaintiffs, as well as punitive damages to deter the company from discriminatory conduct.

For more information or to view the complaint, visit www.hagens-berman.com.

About Hagens Berman

Steve Berman is managing partner of Hagens Berman, a law firm with offices in Seattle, Boston, Los Angeles and Phoenix. Recently named co-lead counsel in litigation to recover losses from Enron employees' retirement funds, Berman is a nationally recognized expert in class action litigation. Berman represented Illinois and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. Berman also served as counsel in several other high-profile cases including the Washington Public Power Supply litigation, which resulted in a settlement of more than $850 million, and the proposed $92.5 million settlement of The Boeing Company litigation. Other notable cases include litigation involving the Exxon Valdez oil spill; Louisiana Pacific Siding; Morrison Knudsen; Piper Jaffrey; Nordstrom; Boston Chicken; and Noah's Bagels.

Berman is joined in the litigation by attorneys Edward Vrdolyak, Eugene Pincham and William Hooks.