Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: CRT manufacturer’s affiliates subject to personal jurisdiction in the U.S. for price-fixing action, (Jun 10, 2014)

By Linda O’Brien, J.D., LL.M.

In an action by an electronic products retailer and other indirect purchaser plaintiffs against cathode ray tube manufacturers for an alleged international price fixing conspiracy, two affiliates of a CRT manufacturing parent company were subject to personal jurisdiction in the United States, the federal district court in San Francisco has decided (In re Cathode Ray Tube (CRT) Antitrust Litigation, June 9, 2014, Conti, S.).

The plaintiffs are a class of indirect purchasers of cathode ray tubes or products containing CRTs in a multidistrict class action litigation against CRT manufacturers, including Konklijke Philips Electronics. In 2009, the plaintiffs requested that Philips accept service on behalf of its affiliates without a court order permitting service of foreign defendants via their domestic counsel. Philips refused to accept service, contending that its affiliates did not have subsidiaries or counsel in the United States. Subsequently, Philips affiliates—Philips Taiwan Limited (PTL) and Philips do Brasil Ltd. (PDBL)—moved for dismissal of the plaintiffs’ claims for insufficient service of process and lack of personal jurisdiction.

Sufficiency of service. The court found that the affiliates’ motion for insufficient service was untimely. After responding to a special master’s status report on several defendants’ motion to dismiss in 2010, PTL and PDBL failed to pursue a motion to dismiss for insufficient service on their own behalf or further raise the jurisdictional issue until the present motion.

Personal jurisdiction. For a court to exercise personal jurisdiction over a non-resident defendant consistent with due process, the defendant must have certain minimum contacts with relevant forum. In this case, the plaintiffs presented evidence that the affiliates’ participation in meetings with co-conspirators and sale of CRTs into the United States were sufficient to show a purposeful aim of the price-fixing activities toward the United States. Moreover, the plaintiffs established a nexus between the cause of action and the defendants’ activities by pleading that they paid artificially high prices in the United States for CRT products and that the prices were set by PTL and PDBL in conspiratorial meetings and in other actions directed against the United States.

Further, the exercise of jurisdiction would be reasonable, according to the court. Although the burden on PTL and PDBL to participate in the litigation would be substantial, the inconvenience did not constitute a deprivation of due process. The plaintiffs are United States citizens who allege they were harmed by the activities of PTL and PDBL, which gave the United States courts an interest in the case. Thus, PTL and PDBL had sufficient minimum contacts with the United States to warrant the exercise of specific jurisdiction over them, the court concluded.

The case is No. C-07-5944-SC.

Attorneys: Craig A. Benson (Paul Weiss LLP) for Sharp Electronics Corp. Eliot A. Adelson (Kirkland & Ellis LLP) for Hitachi, Ltd. Jon Vensel Swenson (Baker Botts LLP) for Philips Electronics Industries (Taiwan) Ltd., and Philips do Brasil Ltda. Bruce Lee Simon (Pearson Simon & Warshaw, LLP) and Guido Saveri (Saveri & Saveri, Inc.) for Crago, Inc. Betty Lisa Julian (McCormick, Barstow, Sheppard, Wayte & Carruth LLP) for Hawel A. Hawel. Bryan L. Clobes (Cafferty Clobes Meriwether & Sprengel LLP) for Princeton Display Technologies, Inc.

Companies: Sharp Electronics Corp.; Hitachi, Ltd.; Philips Electronics Industries (Taiwan), Ltd.; Philips do Brasil Ltda.; Crago, Inc.; Princeton Display Technologies, Inc.

Cases: Antitrust CaliforniaNews