Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Sharp granted leave to amend claims against CRT manufacturers, (Jun 10, 2014)

By Linda O’Brien, J.D., LL.M.

The federal district court in San Francisco ruled that an electronic products manufacturer could amend its complaint against cathode ray tube manufacturers for an alleged international price fixing conspiracy to plead claims for joint and several liability (In re Cathode Ray Tube (CRT) Antitrust Litigation, June 9, 2014, Conti, S.).

Sharp Electronics, a manufacturer of electronic products, had been a member of a multidistrict class action litigation against cathode ray tube (CRT) manufacturers that involved allegations of an international conspiracy to fix prices on CRT’s included in products purchased by Sharp and other manufacturers and retailers. Sharp, electing to opt out of the class action to pursue its own claims, alleged that Toshiba manufactured, marketed, sold, or distributed CRT products in the United States, either directly or through subsidiaries or affiliates. The parent companies of Sharp and Toshiba entered into a basic transaction agreement (BTA), which contained a forum-selection clause. The court granted Toshiba’s motion for dismissal based on the doctrine of forum non conveniens. Sharp moved for leave to file an amended complaint.

The court determined that Sharp had sufficiently shown that it was entitled to amend its pleadings and such amendment was not procedurally improper or substantively futile. Sharp argued that the issue of joint and several liability was not raised in the dismissal of its claims based on Toshiba’s sales to Sharp and therefore it should be allowed to bring only those claims in its amended pleadings. According to the court, Toshiba would not be prejudiced by the amended pleadings, since it would not raise novel issues in the case. There was no evidence of bad faith or undue delay. Moreover, there were no prior amendments as to show a repeated failure to cure.

Additionally, the plain meaning of the BTA did not render claims of joint and several liability—that were unrelated to the BTA or the purchase orders for the manufacture and supply of CRTs—subject to the forum-selection clause. The court also noted that Toshiba would not be unduly inconvenienced by litigating Sharp’s joint and several liability claims in the U.S. court, since Toshiba had already presented numerous witnesses for deposition in the long-running litigation. Finally, the U.S. forum had a strong interest in resolving the case and was well acquainted with the parties and issues, the court concluded.

The case is No. C-07-5944-SC.

Attorneys: Craig A. Benson (Paul Weiss LLP) for Sharp Electronics Corp. Eliot A. Adelson (Kirkland & Ellis LLP) for Hitachi, Ltd. Jon Vensel Swenson (Baker Botts LLP) for Philips Electronics Industries (Taiwan) Ltd., and Philips do Brasil Ltda. Bruce Lee Simon (Pearson Simon & Warshaw, LLP) and Guido Saveri (Saveri & Saveri, Inc.) for Crago, Inc. Betty Lisa Julian (McCormick, Barstow, Sheppard, Wayte & Carruth LLP) for Hawel A. Hawel. Bryan L. Clobes (Cafferty Clobes Meriwether & Sprengel LLP) for Princeton Display Technologies, Inc.

Companies: Sharp Electronics Corp.; Hitachi, Ltd.; Toshiba

Cases: Antitrust CaliforniaNews