MINEOLA, N.Y. — This week, A federal judge denied a motion filed by CARFAX to dismiss a $350 million antitrust lawsuit brought against the provider of vehicle history reports by more than 750 dealerships. The case, filed by Bellavia Blat on behalf of the dealers in April 2013, is being heard in the U.S. District Court for the Southern District of New York.

With the ruling, the case is now headed into the discovery phase. The lawsuit alleges that Carfax has forged illegal alliances with key players in the auto industry, freezing out competition and forcing dealers to pay higher prices for unreliable vehicle history reports. The suit notes that Carfax then uses its inflated revenues on ads that disparage dealers as dishonest.

“This recent decision is a substantial victory for the dealers, as the court held that we have asserted legally cognizable claims under the various antitrust laws,” said Bellavia Blatt Senior Partner Leonard A. Bellavia, which is seeking substantial money damages per dealership and an injunction against the alleged illegal conduct. “This is an important initiative to redress wrongs being committed against both dealers and consumers.”

Carfax declined to comment on the federal court's decision.