Target Corp. v. AU Optronics Corp.
| Decision Date | 24 August 2011 |
| Docket Number | No. M 07-1827 SI,MDL No. 1827,No. C 10-4945 SI,M 07-1827 SI,C 10-4945 SI |
| Parties | In re: TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION This Order Relates To: TARGET CORPORATION, et al., Plaintiffs, v. AU OPTRONICS CORPORATION, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Now before the Court is defendants' joint motion to dismiss the first amended complaint ("FAC") of plaintiffs Target Corporation; Sears, Roebuck and Co.; Kmart Corporation; Old Comp Inc.; Good Guys, Inc.; Radioshack Corporation; and Newegg Inc. (collectively, "Target"). Pursuant to Civil Local Rule 7-1(b), the Court finds this matter suitable for decision without oral argument and therefore VACATES the hearing currently scheduled for August 26, 2011. Having considered the arguments presented in the moving papers, the Court hereby GRANTS IN PART defendants' motion.
Target filed this antitrust action in 2010, seeking to "recover the damages [it] incurred as a result of a long-running conspiracy by manufacturers of liquid crystal display panels ('LCD Panels')." FAC at ¶1. The FAC alleges that "[d]efendants and their co-conspirators formed an international cartel illegally to restrict competition in the United States in the market for LCD Panels." Id. at ¶2. The FACincludes claims under the Sherman Act, 15 U.S.C. § 1, and under the laws of a number of different states. FAC at ¶¶218-55. It names as defendants entities from nine corporate families: AU Optronics1 ("AUO"); Chi Mei2 ; Chunghwa Pictures Tubes3 ; Epson4 ; Hannstar5 ; LG6 ; Samsung7 ; Sharp8 ; and Toshiba9 .
On July 5, 2011, defendants filed a joint motion to dismiss Target's FAC. Defendants' motion takes issue with three aspects of the FAC. First, defendants claim that the FAC impermissibly relies on group pleading and fails to describe each defendant's role in the conspiracy. Second, defendants argue that the FAC does not adequately identify the purchases of LCD panels that Target made directly from defendants. Third, defendants assert that Target may not recover under the antitrust laws of New York, Nebraska, and Nevada for LCD purchases it made before those states granted standing to indirect purchasers.
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint that fails to state a claim upon which relief may be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl.Corp. v. Twombly, 550 U.S. 544, 570 (2007). This "facial plausibility" standard requires the plaintiff to allege facts that add up to "more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While courts do not require "heightened fact pleading of specifics," a plaintiff must allege facts sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 544, 555.
In deciding whether the plaintiff has stated a claim upon which relief may be granted, the Court must assume that the plaintiff's allegations are true and must draw all reasonable inferences in the plaintiff's favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the Court is not required to accept as true "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
As mentioned above, defendants' motion challenges only three aspects of Target's complaint: (1) Target's use of "group pleading"; (2) Target's allegations of direct-purchaser claims; and (3) Target's attempt to recover under the antitrust laws of New York, Nevada, and Nebraska for the full time period of the alleged conspiracy.
Defendants claim that Target's FAC should be dismissed because it does not allege facts particular to each defendant. They argue that the FAC "lump[s] together two dozen parent and subsidiary companies" in an attempt to "bring the entire corporate family into the case as one amalgamated defendant." Motion at 7; see also, e.g., FAC at ¶46 (); FAC at ¶¶ 53 (same for Chi Mei entities), 56 (Chunghwa), 59 (Epson), 63 (LG), 67 (Samsung), 70 (Sharp), 75 (Toshiba).
This Court has previously evaluated similar "group pleading" allegations in this multi-district litigation. In In re TFT-LCD (Flat Panel) Antitrust Litig., 599 F. Supp. 2d 1179 (N.D. Cal. 2009), the Court found that the direct-purchaser plaintiffs and the indirect-purchaser plaintiffs had both stated validclaims against defendants, despite their use of group pleading. Id. at 1184.
Target's FAC, filed well after the Court issued the above order, bears a predictable resemblance to the direct- and indirect-purchaser complaints. The FAC alleges that the alleged conspiracy was organized at the highest level of the defendant organizations and carried out by both executives and subordinate employees. FAC at ¶104; see also In re TFT LCD (Flat Panel) Antitrust Litig., 599 F. Supp. 2d at 1184-85. It alleges that the conspiracy was implemented by subsidiaries and distributors within a corporate family, and that "individual participants entered into agreements on behalf of, and reported these meetings and discussions to, their respective corporate families." FAC at ¶156; In re TFT LCD (Flat Panel) Antitrust Litig., 599 F. Supp. 2d at 1184-85. Target also alleges that "the individual participants in conspiratorial meetings and discussions did not always know the corporate affiliation of their counterparts, nor did they distinguish between the entities within a corporate family." FAC at ¶156; In re TFT LCD (Flat Panel) Antitrust Litig., 599 F. Supp. 2d at 1184-85. In addition, Target's FAC contains a detailed description of actions taken in furtherance of the conspiracy both by defendants and their American subsidiaries. See FAC at ¶¶103-124, 125-34.
The Court finds that the allegations in Target's FAC are sufficient to put the defendants on notice of the charges against them. Accordingly, it DENIES defendants' motion to dismiss based on Target's use of group pleading.
Defendants also argue that Target's claims for damages under federal law should be dismissed. They assert that Target lacks standing to pursue its federal claims because federal law does not allow indirect purchasers to recover damages. See Illinois Brick Co. v. United States, 431 U.S. 720 (1977). Target does not contest this point, but asserts that it brings "federal antitrust claims for [its] purchases of finished products containing price-fixed LCD panels directly from Defendants and their corporate affiliates." Pl. Opp'n at 9; see also FAC at ¶200 ().
Defendants seek dismissal of Target's direct-purchaser claims as well, arguing that Target's FAC does not provide adequate detail about its direct purchases. Reply at 6 (). Defendants did not raise this argument until their reply brief; it is therefore waived. In any event, Target's complaint alleges that it made direct purchases from one or more of the defendants. That is sufficient to satisfy the notice-pleading requirements of the federal rules. The details defendants seek are best left to the discovery process.
Finally, defendants move to dismiss in part Target's antitrust claims under the laws of New York, Nebraska, and Nevada. Defendants claim that these states did not allow indirect-purchasers to bring suit until the states amended their antitrust laws. Defendants argue that the amendments were not made retroactive, and that therefore Target may not recover for any damages sustained prior to their enactment.
New York's legislature amended the Donnelly Act to permit claims by indirect purchasers on December 23, 1998. See N.Y. Gen. Bus. Law § 340(6). Courts have held that the amendment was not retroactive, and plaintiffs do not assert otherwise. See, e.g., In re Vitamins Antitrust Litig., 2000 WL 1511376, at *5 (D.D.C., Oct. 6, 2000); Lennon v. Philip Morris Cos., 734 N.Y.S.2d 374, 382 (Sup. Ct. 2001) (). Accordingly, Target's Donnelly Act claims are DISMISSED to the extent they arose before December 23, 1998.
Prior to July 20, 2002, Nebraska's Junkin Act allowed "[a]ny person who shall be injured in his business or property" by an antitrust violation to bring a suit for damages. Neb. Rev. Stat. § 59-821 (2000). On July 20, 2002, the Nebraska legislature amended the Junkin Act to permit suit "whether such injured person dealt directly or indirectly with the defendant." 2002 Neb. Laws L.B. 1278; see also Neb. Rev. Stat. § 59-821 (2011). Defendants argue that the amendment does not apply retroactivelyand that this Court should therefore dismiss any claims that arise from purchases made before July 20, 2002. Nebraska courts generally do not give retroactive effect to substantive statutes "unless the Legislature has clearly expressed an intention that the new statute is to be applied retroactively." Soukop v. ConAgra, Inc., 653 N.W.2d 655, 657 (Neb. 2002).10
The Court disagrees with defendants' interpretation of the Nebraska statute, and concludes that, even prior to the 2002 amendment, indirect-purchaser suits...
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