Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Manufacturer in lithium ion battery price-fixing action must supplement discovery regarding guilty plea, (Mar 18, 2015)

By Linda O’Brien, J.D., LL.M.

In a price fixing action by indirect and direct purchasers of lithium ion battery cells against a number of Japanese and Korean manufacturers and their U.S. subsidiaries, a defendant manufacturer was compelled to supplement its response to a discovery request for facts surrounding its guilty plea in a government investigation, a magistrate judge in the federal district court in Oakland, California has decided (In re Lithium Ion Batteries Antitrust Litigation, March 17, 2015, Ryu, D.).

Purchasers of lithium ion batteries filed suit against 17 corporations, 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 defendant corporations included LG Chem., Ltd., Samsung SDI Co., Ltd., Panasonic Corp., Sanyo Electric Co. Ltd., Sony Corp., Hitachi Maxell, Ltd., GS Yuasa Corp., NEC Corp., Toshiba Corp., and their domestic subsidiaries.

In October 2014, the plaintiffs propounded an interrogatory to LG Chem, requesting that the company state all the facts that supported its September 2013 guilty plea to U.S. Department of Justice (DOJ) charges that the company engaged in a criminal conspiracy to fix the prices for lithium ion battery cells. The interrogatory requested the identity of persons with whom LG Chem conspired and persons with knowledge of its guilty plea. In its response, LG Chem referred to the transcript of the guilty plea hearing and seven documents that were produced to the DOJ. The plaintiffs moved to compel LG Chem to supplement its interrogatory response on the grounds that the response was evasive and incomplete.

Under Federal Rule of Civil Procedure 33(b), an answer to an interrogatory should be complete in itself and should not refer to the pleadings or other documents, the court explained. The plaintiffs argued that LG Chem’s response was deficient because it (1) failed to provide “all facts” that support the guilty plea, such as times, dates, participants, and co-conspirators and (2) improperly referred to documents produced in the litigation and plea hearing transcript. LG Chem contended that its response was complete because the facts that support its guilty plea were set forth in full during the plea hearing conducted by the court to justify the guilty plea. Moreover, the interrogatory requested attorney work product and privileged attorney-client communications.

The court found that LG Chem’s response to the interrogatory improperly referred to documents produced in the case or to a transcript. LG Chem was required to amend its response to include specific facts underlying the company executive’s testimony during the plea colloquy. During the plea hearing, the executive stated that officers within the battery division participated in “about 20 or 30” discussions or meetings pertaining to the conspiracy. LG Chem was therefore required to identify when and where they took place, the individuals who were present, and the subjects discussed by the participants. With respect to the seven documents identified by LG Chem, the company must provide clear, detailed statements of what is contained in the documents, rather than merely referring to their existence, the court stated.

The plaintiffs’ argument that the attorney work product and client privilege protection was waived was rejected. The court noted that that the seven documents LG Chem identified in its response were internal company emails about pricing and did not relay privileged communications.

Finally, the interrogatory request to identify persons with knowledge of the guilty plea was overbroad. According to the court, the request could encompass individuals who were irrelevant to the case, such as anyone who saw a news report on the guilty plea. Thus, the motion to compel was denied regarding that portion of the interrogatory.

The case is No. 13-MD-02420.

Attorneys: Demetrius Xavier Lambrinos (Zelle Hofmann Voelbel Mason, and Gette LLP) and Joanna Weil LiCalsi (Cotchett Pitre McCarthy LLP) for Indirect Purchaser Plaintiffs. Todd Anthony Seaver (Berman DeValerio) for Direct Purchaser Plaintiffs. 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. John C. Dwyer (Cooley LLP) for Sony Corp. Craig P. Seebald (Vinson & Elkins LLP) for Hitachi Ltd.

Companies: LG Chem Ltd.; LG Chem America, Inc.; Panasonic Corp.; Sony Corp.; Hitachi Ltd.

Cases: Antitrust CaliforniaNews