Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Joint, several liability in lithium ion battery litigation is issue for arbitrator, (Dec 10, 2015)

By Jeffrey May, J.D.

An arbitrator will have to decide whether Panasonic Corporation and SANYO Electric Company are jointly and severally liable to Microsoft Mobile Inc. for the conduct of their alleged co-conspirators in a purported conspiracy to fix prices of lithium ion battery cells. The federal district court in Oakland, California, has granted a motion to compel arbitration based on arbitration agreements between Microsoft’s predecessor—Nokia Corporation—and Panasonic and SANYO and has stayed the proceedings pending a decision on arbitrability of the “joint and several liability” claims (In re Lithium Ion Batteries Antitrust Litigation, December 9, 2015, Rogers, Y.).

Microsoft filed suit against a number of manufacturers of lithium ion battery cells—chemical cores of rechargeable batteries—in addition to Panasonic and SANYO. The dispute concerned whether liability for lithium ion battery cell sales to Microsoft by defendants other than Panasonic and SANYO, with whom they purportedly conspired, should be submitted to the arbitrator.

“Wholly groundless” standard. The court noted that “fairly debatable questions of arbitrability” were to be delegated to the arbitrator. Because the argument that Microsoft’s entire case against the defendants was subject to arbitration was not “wholly groundless,” the issue had to be resolved by the arbitrator. Although there was a question regarding whether the “wholly groundless” standard was the law of the Ninth Circuit, the court pointed out that numerous courts in the Northern District of California had cited the test, which had been articulated by the Federal Circuit. Moreover, the court concluded that the validity of the standard did not have to be resolved, because the outcome would have been the same regardless of whether or not the “wholly groundless” standard was applied.

The case is Master File No. 13-MD-2420 YGR.

Attorneys: Lance A. Termes (Alston & Bird LLP) for Microsoft Mobile Inc. Reginald David Steer (Akin Gump Strauss Hauer & Feld LLP) for LG Chem America, Inc. Jeffrey L. Kessler (Winston & Strawn LLP) for Panasonic Corp., Panasonic Corp. of North America., SANYO Electric Co., Ltd. and SANYO North America Corp.

Companies: Microsoft Mobile Inc.; Microsoft Mobile Oy; LG Chem America, Inc.; LG Chem Ltd.; Panasonic Corp.; Panasonic Corp. of North America; SANYO Electric Co., Ltd.; SANYO North America Corp.

Cases: Antitrust CaliforniaNews