Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Japanese manufacturer subject to jurisdiction in U.S. for capacitor price fixing action, (Jun 12, 2015)

By Linda O’Brien, J.D., LL.M.

In consolidated antitrust actions by direct and indirect purchasers against capacitor manufacturers for engaging in a price fixing conspiracy, a Japanese manufacturer was subject to personal jurisdiction in the United States, the federal district court in San Francisco has held. Thus, the defendant’s motion to dismiss was denied (In re Capacitors Parts Antitrust Litigation, June 11, 2015, Donato, J.).

Capacitors are basic functional units in electronic circuits and generally operate to store energy on a short-term basis. Direct and indirect purchasers of capacitors filed a series of class action suits, claiming that Nippon Chemi-Con Corporation (NCC) and other capacitor manufacturers engaged in a multi-year price fixing conspiracy for electrolytic and film capacitors. In the consolidation action, the defendant manufacturers’ global motions to dismiss were largely denied. NCC filed a separate motion, seeking dismissal for lack of personal jurisdiction.

The court determined that the plaintiffs sufficiently presented facts to show that NCC expressly aimed its conduct toward the United States. To subject a defendant to personal jurisdiction: (1) the non-resident defendant must purposely direct its activities toward the forum, thereby invoking the benefits of its laws; (2) the claim must arise out of or relate to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must be reasonable.

The plaintiffs presented evidence that NCC in Japan physically shipped electrolytic capacitors directly to company customers in the United States. Also, there was evidence that NCC was a participant in a meeting with other capacitor manufacturers in 2003 the express purpose of which was to exchange information about the market and capacitor categories so each company would be able to “enjoy profits” and maintain “healthy market prices.” Thus, the plaintiffs met their burden of establishing purposeful direction, in the court’s view.

Additionally, the plaintiffs’ claims arose out of or related to the defendant NCC’s forum-related activities. The plaintiffs were required to show some nexus between their cause of action and the defendant’s activities in the forum. According to the court, it was clear that the plaintiffs’ claims arose out of and were related to the sale of NCC’s capacitors in the United States and NCC’s alleged participation in the capacitor price fixing conspiracy.

Finally, the exercise of specific jurisdiction over NCC was reasonable. NCC admitted that the company was registered and licensed to do business in the United States and had a research and development office in California. Although there was a burden on NCC to defend a case abroad, that burden was mitigated by modern technology and outweighed by the U.S. federal courts’ interest in hearing the case. Thus, personal jurisdiction over NCC was inappropriate, the court concluded.

The case is No. 14-cv-03264-JD.

Attorneys: Joseph R. Saveri (Joseph Saveri Law Firm, Inc.) for Direct Purchaser Plaintiffs. Adam John Zapala (Cotchett, Pitre & McCarthy LLP) for Indirect Purchaser Plaintiffs. Ruth Landis Hawley (Kaufhold Gaskin LLP) for Nippon Chemi-Con Corporation.

Companies: Nippon Chemi-Con Corporation

Cases: Antitrust CaliforniaNews