FTC Charges U-Haul Filed Sham Lawsuits

The Federal Trade Commission charged Wednesday that U-Haul, the nation’s largest renter of trucks and trailers, used “sham litigation” in an illegal attempt to monopolize the rental market for moving equipment.

U-Haul and its owner, Las Vegas-based Amerco, undertook “a deliberate course of action to abuse the judicial process in order to injure a competitor,” the commission charged.

The litigation that U-Haul filed against competitor Jartran amounted to a “sham,” the FTC said, because it was intended primarily to injure the other firm rather than to protect U-Haul’s legal interests.

Dominated Market

Paul J. Kelley, U-Haul’s director of public relations, said from the firm’s headquarters in Phoenix that “we think we acted fairly and legally and with the best available counsel.” The company’s attorney, he said, is Alan Ward, who headed the FTC’s bureau of competition during the Nixon and Ford administrations.

U-Haul has dominated the one-way rental market for many years, but Jartran entered the business in 1979 and by 1980 had gained a 10% share of the market, largely at U-Haul’s expense, according to the commission.

In 1980, U-Haul filed a $375-million false-advertising suit against Miami-based Jartran, the commission reported. The following year, Jartran was acquired by Frank B. Hall & Co. of Briarcliff Manor, N.Y., and Jartran subsequently filed to reorganize its operations under Chapter 11 of the U.S. Bankruptcy Code.

The commission said U-Haul then filed a claim against Jartran under the bankruptcy proceedings, based on the damages it sought in the false-advertising suit.

U-Haul subsequently proposed reorganizations of Jartran under which it would acquire that firm’s assets--even though the commission said U-Haul officials knew that would violate antitrust statutes.

In addition, the FTC said, U-Haul opposed a suggested settlement between Jartran and its creditors even though the settlement would have increased the amount of money that U-Haul was to receive.

Attempt to Delay

Such actions were intended to delay Jartran’s reorganization in an attempt to eliminate the competitor and allow U-Haul to monopolize the rental market, the commission charged.

The case will go before an FTC administrative law judge, whose findings will be either accepted or rejected by the full commission.

An FTC spokesman said U-Haul faces no potential fine, but, if the complaint is upheld, the commission could require the company to receive FTC approval before it enters any similar cases involving other competitors.