In re TFT–LCD (FLAT Panel) Antitrust Litig.

• Decision Date: 05 October 2011
• Docket Number: No. M 07–1827 SI.MDL. No. 1827.,M 07–1827 SI.MDL. No. 1827.
• Court: U.S. District Court — Northern District of California
• Parties: In re TFT–LCD (FLAT PANEL) ANTITRUST LITIGATION.This Order Relates to: All Indirect–Purchaser Plaintiff Class Actions.

2011-2 Trade Cases P 77,644

822 F.Supp.2d 953

In re TFT–LCD (FLAT PANEL) ANTITRUST LITIGATION.This Order Relates to: All Indirect–Purchaser Plaintiff Class Actions.

No. M 07–1827 SI.MDL. No. 1827.

United States District Court, N.D. California.

Oct. 5, 2011.

Samuel W. Lanham, Jr., Lanham & Blackwell, Bangor, ME, Ian Otto, Straus & Boies LLP, Fairfax, VA, Mario Nunzio Alioto, Trump Alioto Trump & Prescott LLP, Eric B. Fastiff, Andrew Scirica Kingsdale, Brendan Patrick Glackin, Lieff, Cabraser, Heimann & Bernstein LLP, Bruce Lee Simon, Jessica L. Grant, Pearson Simon Warshaw & Penny LLP, Joseph M. Alioto, Alioto Law Firm, San Francisco, CA, Francis O. Scarpulla, Craig C. Corbitt, Judith A. Zahid, Patrick B. Clayton, Qianwei Fu, Heather T. Rankie, Zelle Hofmann Voelbel & Mason LLP, San Francisco, CA, Marvin A. Miller, Miller Law LLC, David Paul Germaine, Chicago, IL, Jason C. Murray, Joshua Courtney Stokes, Crowell & Moring, Los Angeles, CA, Daniel L. Warshaw, Pearson, Simon, Warshaw & Penny LLP, Sherman Oaks, CA, Christopher T. Leonardo, Kenneth L. Adams, R. Bruce Holcomb, Adams Holcomb LLP, Jeffrey H. Howard, Jerome A. Murphy, Crowell & Moring LLP, Washington, DC, Brian Parker Miller, Donald MacKaye Houser, Joann Elizabeth Johnston, Lisa Kathleen Bojko, Peter Konito, Valarie Cecile Williams, Debra Dawn Bernstein, Elizabeth Helmer Jordan, Matthew David Kent, Michael P. Kenny, Rodney J. Ganske, Alston & Bird LLP, Atlanta, GA, Randall Lee Allen, Steven Daniel Hemminger, Alston & Bird LLP, Palo Alto, CA, Richard W. Stimson, Alston & Bird LLP, Dallas, TX, Gregory W. Landry, LaMarca & Landry, P.C., Des Moines, IA, for Plaintiffs.

Michael Robert Lazerwitz, Jeremy James Calsyn, Cleary Gottlieb Steen & Hamilton LLP, Daniel M. Suleiman, Robert D. Wick, Covington & Burling LLP, Christopher M. Curran, Kristen J. McAhren, White & Case LLP, Derek Ludwin, Brent J. Gurney, Gordon Pearson, Steven F. Cherry, Therese Lee, Wilmer Cutler Pickering Hale & Dorr LLP, Wilmer Cutler, Hale and Dorr LLP, David Lawrence Meyer, Morrison & Foerster, Katerina S. Colitti, Cleary Gottlieb Steen & Hamilton LLP, Washington, DC, Simon J. Frankel, Jeffrey Michael Davidson, Timothy C. Hester, Covington & Burling, Jacob R. Sorensen, John M. Grenfell, Ryan Takemoto, Pillsbury Winthrop Shaw Pittmanllp, Anne Benton Kaldor, Erin Alysa Smart, Bingham McCutchen LLP, Colin C. West, McCutchen, Doyle, Brown & Enersen, LLP, Courtney Lynn Landis, Kent Michael Roger, Michelle Minju Kim-Szrom, Candice Simone Petty, William James Taylor, Morgan Lewis & Bockius LLP, Christopher Alan Nedeau, Allison Marie Dibley, Esq., Bryan B. Barnhart, Carl Lawrence Blumenstein, Nossaman LLP, Matthew Clark Lovell, Michael F. Healy, Esq., Sedgwick Detert Moran & Arnold LLP, Joel Steven Sanders, Joshua David Hess, Gibson Dunn & Crutcher LLP, Jeffrey L. Bornstein, K & L Gates LLP, Tyler Mark Cunningham, Sheppard Mullin Richter & Hampton, Kevin C. McCann, Chad A. Westfall, Sean David Unger, Paul, Hastings, Janofsky & Walker LLP, Derek Francis Foran, Melvin R. Goldman, Stephen P. Freccero, Morrison & Foerster LLP, Bruce H. Jackson, Nancy Chung Allred, Patrick J. Ahern, Robert Walter Tarun, Baker & McKenzie LLP, Allison Ann Davis, Sam N. Dawood, Davis Wright Tremaine LLP, San Francisco, CA, John C. McGuire, Sedgwick, Detert, Moran & Arnold, Newark, NJ, Jason Haruo Wilson, Willenken Wilson Loh & Lieb LLP, Peter Wethrell James, Baker Hostetler, Los Angeles, CA, Kenneth I. Schacter, Richard S. Taffet, Bingham McCutchen, John H. Chung, Wayne A. Cross, White & Case LLP, Caren K. Khoo, Wilmer Cutler Pickering Hale & Dorr, New York, NY, Nathan Loy Walker, Wilmerhale, Palo Alto, CA, Patrick J. Ahern, Robert W. Tarun, Roxane C. Busey, Karen Sewell, Baker & McKenzie LLP, Chicago, IL, Christopher M. Wyant, Hugh F. Bangasser, Hugh Frederick Bangasser, Julie Anne Halter, Ramona M. Emerson, K & L Gates, Seattle, WA, Nick Steven Verwolf, Davis Wright Tremaine LLP, Bellevue, WA, for Defendants.

ORDER DENYING DEFENDANTS' JOINT DISPOSITIVE MOTION REGARDING INDIRECT PURCHASER CLAIMS BASED ON FOREIGN SALES

SUSAN ILLSTON, District Judge.

On July 29, 2011, the Court heard argument on defendants' joint dispositive motion regarding indirect purchaser claims based on foreign sales. Having considered the moving papers and the arguments of the parties, and for good cause appearing, the Court hereby DENIES defendants' motion.

BACKGROUND

This antitrust class action stems from allegations of a global price-fixing conspiracy in the market for thin-film transistor liquid-crystal display (“TFT–LCD”) panels. See Indirect Purchaser Plaintiffs' Third Consolidated Amended Complaint (“TAC”) at ¶¶ 1–2. TFT–LCD panels are used in a number of products, such as computer monitors, notebook computers, and televisions. See generally Order Granting Indirect Purchaser Plaintiffs' Motion for Class Certification, 267 F.R.D. 583, 587–88 (N.D.Cal.2010) ( “ Class Certification Order ”); TAC at ¶¶ 16–54, 106 (“LCD is a type of display technology utilized in products including TVs, computer monitors, laptops, mobile phones, digital cameras, and numerous other electronic products.”). The panels have no independent utility, and are not available to the average consumer. TAC at ¶ 128. Instead, they are incorporated into finished products as discrete, physical objects within the product. Class Certification Order, 267 F.R.D. at 587–88.

Defendants are the major global manufacturers of LCD panels and their subsidiaries. TAC at ¶ 121 (“[T]he top six companies (Samsung, LGD, Chi Mei, AU Optronics, Sharp and Chunghwa) currently control in excess of 80% of the LCD panels market.”). Although some defendants have sales offices in the United States, their business operations are primarily located in Japan, Korea, and Taiwan. TAC at ¶¶ 56–86. Defendants manufacture their LCD panels overseas, at which point the panels are sold and assembled into finished products. Some defendants, through their subsidiaries, sell end-user devices directly to consumers. See, e.g., TAC at ¶ 127 (“[A] number of the defendants are also computer and/or television OEMs, such as Toshiba and Samsung (computers) and Samsung, Hitachi, and Toshiba (televisions).”). The majority do not.

Plaintiffs are a class of retail consumers who purchased products containing TFT–LCD panels in the United States. See Class Certification Order, 267 F.R.D. at 608–13. Plaintiffs purchased these products “indirectly,” meaning that they did not purchase the finished products from the defendants or their subsidiaries. Id. Instead, plaintiffs purchased products containing TFT–LCD panels from original equipment manufacturers (“OEMs”) such as Dell, Hewlett Packard, or Apple, or retailers such as Best Buy or Costco. See TAC at ¶¶ 16–54.

Plaintiffs' TAC alleges that defendants conspired to fix prices of TFT–LCD panels between 1999 and 2006. According to the TAC, defendants' high-level executives held a series of secret meetings at which they discussed prices for and production levels of LCD panels. See TAC at ¶¶ 138–44. Although these meetings primarily took place in Taiwan, plaintiffs also allege that a significant amount of anticompetitive conduct took place elsewhere, including within the United States. Plaintiffs claim that the antitrust conspiracy produced artificially high prices for TFT–LCD panels, and that this overcharge was “passed through” to consumers, causing end-users to pay inflated prices in the United States for electronic items that contained LCD panels. TAC at ¶ 212 (“The entire overcharge for LCD panels at issue was passed on to plaintiffs and members of the indirect-purchaser class.”). Plaintiffs' TAC includes a claim under the Sherman Act, as well claims brought under the antitrust, unfair competition, and unjust enrichment laws of a number of states. TAC at ¶¶ 270–312.

Defendants now seek to dispose of a significant portion of plaintiffs' lawsuit. Defendants argue that the majority of their panel sales took place entirely in foreign commerce. They claim that, to the extent they did not sell their LCD panels directly to United States consumers or companies, they may not be held liable under either federal or state law.

LEGAL STANDARD

For the reasons set forth below, the Court finds that defendants' motion is properly heard as a motion for summary judgment. Summary judgment is proper if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party, however, has no burden to disprove matters on which the non-moving party will have the burden of proof at trial. The moving party need only demonstrate to the Court that there is an absence of evidence to support the non-moving party's case. Id. at 325, 106 S.Ct. 2548.

Once the moving party has met its burden, the burden shifts to the non-moving party to “set out ‘specific facts showing a genuine issue for trial.’ ” Id. at 324, 106 S.Ct. 2548 (quoting then Fed.R.Civ.P. 56(e)). To carry this burden, the non-moving party must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “The mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In deciding a summary judgment motion, the Court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in its favor. Id...