Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Jurisdictional discovery permitted to determine role of Thomson S.A. in CRT price fixing conspiracy, (Dec 13, 2013)

By Jeffrey May, J.D.

French holding company Thomson S.A., whose wholly-owned U.S. subsidiary—Thomson Consumer Electronics Corporation—manufactured cathode ray tubes (CRTs), was not dismissed for lack of personal jurisdiction by the federal district court in San Francisco from CRT price fixing litigation. Although the plaintiffs did not meet their burden of showing that either general jurisdiction or specific jurisdiction over Thomson S.A. was appropriate, they made a sufficient case for conducting limited jurisdictional discovery on the issue of personal jurisdiction over Thomson S.A., according to the court (In re: Cathode Ray Tube (CRT) Antitrust Litigation: Sharp Electronics Corp. v, Hitachi Ltd., December 11, 2013, Conti, S.).

The plaintiffs argued that general jurisdiction existed over Thomson S.A. because its Thomson Consumer subsidiary was its agent and Thomson Consumer was within the court’s general jurisdiction. However, the plaintiffs’ facts and allegations about the relationship between the two companies were inconclusive, in the court’s view.

For instance, the fact that some of Thomson S.A.’s executives served on Thomson Consumer’s board or even shared office space with Thomson Consumer, without more, was not sufficient involvement to establish an agency relationship. Furthermore, other allegations did not directly controvert Thomson S.A.’s declaration that—at least as to Thomson Consumer—it was merely a holding company or majority shareholder, not a controlling corporation. The plaintiffs contended that the subsidiary’s CRT activity was very important to the French company; however, Thomson S.A. responded that Thomson Consumer’s CRT manufacturing business was not sufficiently important since Thomson Consumer sold its U.S.-based CRT plants and its CRT business in 2005. The court did not find that the companies had the kind of synergistic relationship that would warrant linking the two companies for jurisdictional purposes.

The court also declined to exercise specific jurisdiction over Thomson S.A. The plaintiffs failed to establish that Thomson S.A. intentionally aimed any action—specifically CRT conspiracy activity—toward the United States, that its conspiracy actions were the but-for cause of the plaintiffs’ claims, or that exercising jurisdiction would be reasonable. The court took issue with the fact that the plaintiffs’ evidence often referenced “Thomson” generally and did not specify whether the activity was undertaken by the French company or the U.S. subsidiary.

Even though the plaintiffs had not made a prima facie showing of jurisdiction, the court granted the plaintiffs’ motion for jurisdictional discovery to collect evidence related to their agency argument and Thomson S.A.’s intentional conduct toward the United States. The allegations and evidence were not entirely bare, according to the court.

Background. CRT purchasers are pursuing antitrust claims against manufacturers for allegedly participating in price fixing conspiracy that lasted more than a decade. CRTs are included in a number of products, including televisions and computer monitors. In this long-running litigation, a number of defending CRT makers, including Philips, Panasonic, LG Electronics, and Toshiba, have agreed to settle the claims.

The case is MDL No. 1917.

Attorneys: Stephen E. Taylor (Taylor & Co. Law Offices, LLP) for Sharp Electronics Corp. and Sharp Electronics Manufacturing Co. of America, Inc.

Companies: Hitachi Ltd.; Sharp Electronics Corp.; Thomson S.A.; Thomson Consumer Electronics, Inc.

Cases: Antitrust CaliforniaNews