New corporate citizen has landed into legal battles

Aftermarket auto parts maker sues for defamation after a company makes some strong public accusations

Email | Print By Richard Lawson

One of Nashville's newest corporate citizens may have arrived with a little hair on it.

In a Nashville federal court, Keystone Automotive Industries, an aftermarket auto parts maker that moved its corporate offices here from Pomona, Calif., last year, recently filed a defamation lawsuit against Rochester Hills, Mich.-based MQVP, a company that runs a quality assurance, certification and licensing program Keystone once used. Keystone's lawsuit stems from a long press release MQVP put out in February making some rather strong accusations against Keystone.

Among other assertions, MQVP's president, William Hindelang, claimed that Keystone's president and chief executive officer, Richard Keister, had lied to investors and financial analysts on a conference call about Keystone's relationship with MQVP, telling those on the call that Keystone had been in good standing with MQVP prior to the termination.

Hindelang said in his press release that Keystone was on probation with his company. Keystone terminated its contract with MQVP last November. Hindelang basically claimed that Keystone was counterfeiting parts among other nefarious acts. He suggested there was an issue with counterfeit parts within the supply chain and that the companies, including Keystone, collaborated to withhold payments, causing a cash crunch that put MQVP into Chapter 11 last August.

Keystone, obviously, took umbrage at being accused of a criminal act. The company demanded a retraction, and it got one two days later. MQVP put out another release advising that Hindelang's five-page diatribe "may include an unintentional misstatement of fact." Keystone argues that the retraction "is not sufficient to avoid the imposition of punitive damages."

The legal battle between the two didn't start here. Keystone's lawsuit was preceded by one MQVP filed in a Michigan federal court against Keystone last December. In it, MQVP claims Keystone infringed its trademark. The company alleges that Keystone was selling and distributing parts using the MQVP trademark without authorization. Among the claims, MQVP's lawsuit states, "Keystone has, without consent of MQVP Inc., conspired with estimate service providers and others to, and did, wrongfully manipulate MQVP Inc.’s, data referencing MQVP and causing disruption of MQVP Inc.’s business operations and relations."

Keystone denied MQVP's allegations and filed a counterclaim, alleging that MQVP had breached its duties under the agreement the two had. MQVP's lawsuit originally was filed in bankruptcy court in Michigan but has been removed to a federal district court.