In re Actions

• Decision Date: 18 December 2017
• Docket Number: Case No.10-md-02143-RS
• Parties: IN RE OPTICAL DISK DRIVE ANTITRUST LITIGATION This Document Relates to: ALL INDIRECT PURCHASER ACTIONS
• Court: U.S. District Court — Northern District of California

IN RE OPTICAL DISK DRIVE ANTITRUST LITIGATION

This Document Relates to:

ALL INDIRECT PURCHASER ACTIONS

Case No.10-md-02143-RS

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION

December 18, 2017

ORDER GRANTING SUMMARY JUDGMENT AGAINST THE INDIRECT PURCHASER PLAINTIFFS¹

Re: Dkt. Nos. 2341, 2373, 2375, 2383, 2398

INTRODUCTION

Indirect Purchaser Plaintiffs ("IPPs") are a class of purchasers of products containing optical disc drives ("ODDs") who allege injury from an anticompetitive conspiracy to fix, raise, stabilize, and maintain the prices of ODDs from 2003 to 2008.² IPPs bring suit on their own behalf and on behalf of a class of similarly situated persons for injunctive relief under the Sherman Act, and compensatory damages under the Cartwright Act and California's Unfair Competition Law ("UCL"). Now that fact and expert discovery have closed, Defendants³ move for summaryjudgment on all claims on the grounds that (1) the evidence does not support the conspiracy alleged; (2) IPPs cannot show that they suffered injury and damages; (3) IPPs cannot show that any claimed injuries resulted from Defendants' anticompetitive conduct; and (4) the FTAIA bars claims for ODDs originally sold in foreign commerce. Each of these arguments is addressed below. This Order also addresses the individual arguments raised by the BenQ Defendants regarding withdrawal and statute of limitations, neither of which is convincing. Because IPPs ultimately fail to show evidence of pass-through, a necessary element of their theory of damages, Defendants' Motion for Summary Judgment against the IPPs will be granted.

LEGAL STANDARD

Summary judgment is proper where the pleadings, discovery, and affidavits demonstrate that there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those which may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id.

The party moving for summary judgment bears the initial burden of identifying those portions of the pleadings, discovery, and affidavits which demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party will have the burden of proof on an issue at trial, it must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party. In contrast, on an issue for which the opposing party will have the burden of proof at trial, the moving party need only point out "that there is an absence of evidence to support the nonmoving party's case." Id. at 325.

Once the moving party meets its initial burden, the nonmoving party must go beyond the pleadings and, by its own affidavits or discovery, set forth specific facts showing that there is a genuine issue for trial. Only disputes over material facts are relevant. "Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248. It is not the task of thecourt to scour the record in search of a genuine issue of triable fact. Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir.1996). The nonmoving party has the burden of identifying, with reasonable particularity, the evidence that precludes summary judgment. Id. If the nonmoving party fails to make this showing, "the moving party is entitled to a judgment as a matter of law." Celotex, 477 U.S. at 322.

DISCUSSION

I. Sufficiency of the Evidence Supporting the Alleged Conspiracy

A. Claims Under the Sherman and Cartwright Acts

Section 1 of the Sherman Antitrust Act prohibits "every contract, combination . . . or conspiracy, in restraint of trade or commerce among the several States . . . ." 15 U.S.C. § 1. In order to establish a claim under Section 1, plaintiffs must demonstrate "(1) the parties to the agreement intend to harm or restrain competition, (2) the agreement actually injures competition and (3) the restraint is unreasonable as determined by balancing the restraint and any justifications or procompetitive effects of the restraint." Gorlick Distrib. Ctrs., LLC v. Car Sound Exhaust Syst., Inc., 723 F.3d 1019, 1024 (9th Cir. 2014) (internal quotation marks and citation omitted). Horizontal price-fixing is a per se violation of the Sherman Act. Hui Hsiung, 778 F.3d 738, 750 (9th Cir. 2015). "A long line of California cases has concluded that the Cartwright Act is patterned after the Sherman Act and both statutes have their roots in the common law. Consequently, federal cases interpreting the Sherman Act are applicable to problems arising under the Cartwright Act." Marin Cty. Bd. of Realtors, Inc. v. Palsson, 16 Cal. 3d 920, 925 (1976).

When concerted price-fixing is alleged under the Sherman or Cartwright Acts, plaintiffs bear the burden of presenting sufficient evidence to prove that an agreement to fix prices existed. See, e.g., In re Citric Acid Litig., 191 F.3d 1090, 1093 (9th Cir. 1999); Sun Microsystems Inc. v. Hynix Semiconductor Inc., 622 F. Supp. 2d 890, 896 (N.D. Cal. 2009). To survive summary judgment, plaintiff must establish that there is a genuine issue of material fact as to whether defendants entered into an illegal conspiracy that caused plaintiff to suffer a cognizable injury. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Plaintiff can establish a genuine issue of material fact by producing either direct evidence of a defendant'sprice-fixing conduct or circumstantial evidence from which a reasonable fact finder could conclude the same. In re Citric Acid Litig., 191 F.3d at 1093; see also Sun Microsystems, 622 F. Supp. 2d at 896 (citing Movie 1 & 2 v. United Artists Commc'ns, 909 F.2d 1245, 1251-52 (9th Cir. 1990); United States v. Gen. Motors Corp., 384 U.S. 127, 142-43, (1966)).

Direct evidence of a conspiracy "must be evidence that is explicit and requires no inferences to establish the proposition or conclusion being asserted." Cty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1155 (9th Cir. 2001). In the absence of direct evidence, plaintiff "must present evidence from which an inference of conspiracy is more probable than an inference of independent action." Wilcox v. First Interstate Bank of Oregon, N.A., 815 F.2d 522, 525 (9th Cir. 1987). "[A]n inference of conspiracy is sustainable only if reasonable in light of the competing inferences of independent action, and to survive a motion for summary judgment . . . , a plaintiff seeking damages for a violation of § 1 must present evidence that tends to exclude the possibility that the alleged conspirators acted independently." In re Citric Acid Litig., 191 F.3d at 1094 (citing Matsushita, 475 U.S. at 588).

The Ninth Circuit "has outlined a two-part test to be applied whenever a plaintiff rests its case entirely on circumstantial evidence." Id. at 1094. "First, the defendant can 'rebut an allegation of conspiracy by showing a plausible and justifiable reason for its conduct that is consistent with proper business practice.' The burden then shifts back to the plaintiff to provide specific evidence tending to show that defendant was not engaging in permissible competitive behavior." Id. (internal citations omitted); see also In re Tableware Antitrust Litig., 484 F. Supp. 2d 1059, 1972 (9th Cir. 2007). While evidence of market allocation or agreements on specific prices would certainly be probative of a conspiracy, simply "[g]athering competitors' price information can be consistent with independent competitor behavior." In re Baby Food Antitrust Litig., 166 F.3d 112, at 126 (3d Cir. 1999); see also Krehl v. Baskin-Robbins Ice Cream Co., 664 F.2d 1348, 1357 (9th Cir. 1982) (finding that "evidence of roughly a dozen isolated communications regarding prices over a seven-year period" were "no more than idle 'shop talk' such as often occurs between persons in the same field of endeavor" and did not present any "pattern from which an unlawful price fixing conspiracy could be inferred").

B. IPPs' Evidence of the Alleged Conspiracy

Defendants contend that IPPs cannot point to any direct or circumstantial evidence supporting the overarching, industry-wide conspiracy. Instead, they argue that the only anticompetitive conduct evidenced by the record is that reflected by the admissions in the HLDS and PLDS guilty pleas. Otherwise, they attempt to align IPPs' remaining evidence with permissible business conduct.

In opposition, IPPs submit several categories of evidence. First, IPPs claim direct evidence shows that Defendants' goal was not only to rig the specific bids confessed to, but to stabilize industry ODD prices. IPPs concede, as they must, that they do not have evidence of a single meeting of all of the Defendants, such as the "crystal meetings" in the TFT-LCD (Flat Panel) case. See In re TFT-LCD (Flat Panel) Antitrust Litig., 599 F. Supp. 2d 1179, 1184 (N.D. Cal. 2009). Instead, they focus attention on a memo written on April 15, 2003, by David Kim (Samsung) after a meeting with Jin-Sung "Luke" Choi (HLDS). See Friedman Decl. [Dkt. No. 2535] Ex. 6, at TSSTK-0222459PCT. The memo refers to "[f]uture price negotiations," and states: "[a]vert a large-scale decline on price for products other than for which intense competition is anticipated, and aim for waging collective action." Id. David Kim's notes from June 2003 show that the "collective action" came to fruition at a June 2003 Dell auction: "With a continued intense skirmish with HLDS ensuing, colluded with HLDS for a tie at $52.10." Friedman Decl. [Dkt. No. 2535] Ex. 42, at TSSTK-0222485PCT. These two documents are highly probative of the broader conspiracy that IPPs suggest, encompassing sales events other than those explicitly admitted in the criminal case guilty pleas. IPPs also point to several additional...