Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Interlocutory appeal denied in lithium ion battery litigation, (Jan 27, 2015)

By Linda O’Brien, J.D., LL.M.

In multi-district litigation brought against manufacturers of lithium ion battery cells by direct and indirect purchasers, the federal district court in Oakland, California has denied the manufacturers’ motion to certify for an interlocutory appeal (In re Lithium Ion Batteries Antitrust Litigation, January 26, 2015, Rogers, Y.).

Purchasers of lithium ion batteries filed suit against 17 Japanese and Korean corporations and their U.S. subsidiaries, alleging a multi-year conspiracy to fix the prices of lithium ion battery cells—chemical cores of rechargeable batteries that are found in consumer electronics, or as standalone products. The direct purchaser plaintiffs (DPPs) sought injunctive relief and money damages under federal antitrust law, while the indirect purchaser plaintiffs (IPPs) sought injunctive relief under federal antitrust law and money damages under state antitrust and consumer protection laws.

In January 2014, the court dismissed the DPPs and IPPs respective complaints, with leave to amend. In October 2014, the court granted in part and denied in part the defendant manufacturers’ motions to dismiss the amended complaints, largely allowing the plaintiffs’ antitrust claims to proceed. Subsequently, the defendants moved for certification for interlocutory appeal of the January and October 2014 orders.

Certification of an interlocutory appeal under 28 U.S.C. §1292(b) requires that (1) there is a controlling question of law; (2) an immediate appeal may materially advance the ultimate termination of the litigation; and (3) there are substantial grounds for difference of opinion.

The manufacturer defendants sought certification of the following questions: (1) whether, under Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), purchasers of a non-price fixed finished product containing an allegedly price fixed component could seek damages under the Clayton Act?; and (2) whether plaintiffs who purchased only non-price fixed finished products that contained an allegedly price fixed component could satisfy the market participation requirement under Assoc. General Contractors of Calif. Inc. v. Calif. State Council of Carpenters, 459 U.S. 519 (1983) (AGC), without plausibly pleading reasonable interchangeability of use or cross-elasticity of demand between the finished products and components?

The court determined that the questions presented by the defendants did not involve controlling questions of law for which there were substantial grounds for differences of opinion and would not materially advance the ultimate termination of the litigation. The underlying issues required certain factual findings to be conclusively determined and could not be resolved on appeal in light of the present factual record. Moreover, the defendants challenged only one of five non-dispositive factors under the AGC case, and a substantial portion of the plaintiffs’ cases would remain even if the defendants prevailed on appeal. Finally, certification would likely cause additional delay in the discovery process. Accordingly, the defendants’ motion was denied.

The case is No. 13-MD-2420.

Attorneys: Jeffrey D. Friedman (Hagens Berman Sobol Shapiro LLP) for Kevin Young. Lindsey A. Davis (Zelle Hofmann Voelbel & Mason LLP) for The StereoShop. Nicole M. Acchione (Trujillo Rodriguez & Richards, LLP) for A-1 Computers Inc. Beth Targan Seltzer (Barrack Rodos and Bacine) for First Choice Marketing Inc. Allan Steyer (Steyer Lowenthal Boodrookas Alvarez & Smith LLP) for Automation Engineering, LLC. Jason H. Kim (Schneider Wallace Cottrell Knoecky LLP) for KCN Services LLC. Kenneth P. Ewing (Steptoe & Johnson LLP) for LG Chem. Ltd., and LG Chem America, Inc. Jeffrey L. Kessler (Winston & Strawn LLP), and Roxann E. Henry (Morrison and Foerster LLP) for Panasonic Corp., Panasonic Corporation of North America, and Sanyo Electric Co., Ltd.

Companies: The StereoShop; A-1 Computers Inc.; First Choice Marketing Inc.; Automation Engineering, LLC; KCN Services LLC; LG Chem. Ltd.; LG Chem America, Inc.; Panasonic Corp.; Panasonic Corporation of North America; Sanyo Electric Co., Ltd.

Cases: Antitrust CaliforniaNews