Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Indirect purchaser’s MCPA claims against CRT manufacturers barred, (Mar 17, 2014)

By Linda O’Brien, J.D., LL.M.

The federal district court in San Francisco has ruled that claims under the Massachusetts Consumer Protection Act by a consumer electronics retailer against cathode ray tube manufacturers for an alleged international price fixing conspiracy were barred because the retailer was an indirect purchaser of the CRT products (In re Cathode Ray Tube (CRT) Antitrust Litigation, March 13, 2014, Conti, S.).

Tweeter Newco LLC, a consumer electronics retailer, opted out of multidistrict class action litigation against cathode ray tube (CRT) makers. Tweeter filed suit against Toshiba Corporation and Koninklijke N.V., asserting claims under the Massachusetts Consumer Protection Act (MCPA). Toshiba and Philips manufactured, marketed, sold, or distributed CRT products in the United States, either directly or through subsidiaries or affiliates. Tweeter alleged that it purchased CRT products from original equipment manufacturers (OEMs) as well as other suppliers. Toshiba and Philips moved for dismissal.

The court determined that Tweeter’s MCPA claims were barred. Section 9 of the MCPA provides a cause of action for any person who has been injured by another person’s use or employment of any unlawful act or practice.

Tweeter argued that Section 9 was the exclusive provision for businesses to bring antitrust claims since Section 11 was reserved for direct purchaser claims. According to the court, Section 9 applies to individual consumers or corporations that participate in commercial transactions on a private, nonprofessional basis. While a corporation engaged in commerce could bring a suit under Section 11 and potentially win it, “a corporation engaged in commerce whose suit is based on indirect purchases will not have standing under Section 11.” The issue of whether a corporation engaged in trade or commerce should be able to bring unfair competition suits that individual consumers could was the domain of the state legislature or courts of appeal, the court concluded.

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

Attorneys:  Anne M. Nardacci (Boies, Schiller & Flexner, LLP) for Schultze Agency Services, LLC, Tweeter Opco LLC, and Tweeter Newco, LLC. Eliot A. Adelson (Kirkland & Ellis LLP) for Hitachi, Ltd.

Companies:  Schultze Agency Services, LLC; Tweeter Opco LLC; Tweeter Newco, LLC; Hitachi, Ltd.

Cases: Antitrust CaliforniaNews