Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Special master recommends final approval of $576M settlement in CRT price fixing litigation, (Jan 29, 2016)

By Linda O’Brien, J.D., LL.M.

A special master for the federal district court in San Francisco has recommended final approval of a proposed combined settlement of over $576 million to resolve price fixing claims against manufacturers of cathode ray tube (CRTs), brought by a class of indirect purchasers of CRTs made by the defendants. The manufacturers are Philips, Panasonic, Hitachi, Toshiba, Samsung, and Thomson Consumer Electronics (In re Cathode Ray Tube (CRT) Antitrust Litigation, January 28, 2016, Quinn, M.).

In 2007, a group of retailers filed a series of class action suits against numerous CRT manufacturers, asserting claims under the Sherman Act and various state laws. They alleged that they were indirect purchasers of CRTs made by the defendants that were ultimately incorporated into finished products. After extensive discovery, the court granted the plaintiffs’ motion for class certification in October 2012.

The indirect purchaser plaintiffs (IPPs) reached settlements with six of the defendant CRT manufacturers, and the court granted preliminary approval of the settlements in July 2015. The plaintiffs then sought an order granting final approval of the settlements.

Settlement terms. The proposed settlements require Philips, Panasonic, Hitachi, Toshiba, Samsung, and Thomson Consumer Electronics to pay over $576 million into a combined settlement fund. Most of the settlement agreements contain provisions that require the settling defendants to cooperate in the prosecution of the continuing litigation.

Certification. For purposes of the settlements, a nationwide settlement class consisted of all persons and entities who indirectly purchased for their own use, and not for resale, a CRT product manufactured or sold in the United States by the defendant or any subsidiary or affiliate, between March 1, 1995 and November 25, 2007.

First, the special master recommended approval of the settlement class. It is undisputed that the class readily satisfied the numerousity requirement, there were questions of law and fact common to the class, and the claims of the class representatives were typical of the claims of class members. Moreover, there was no evidence that class counsel failed to provide adequate representation, that the class counsel had a conflict of interest, or that the class representatives did not possess the same interest and suffer the same injury as the class members.

Settlement approval. Next, the special master found that the compensation to the IPP class was fair, reasonable, and adequate. In recommending final approval of the proposed settlements, the special master considered: (1) that the IPPs faced substantial hurdles in pursuing their claims; (2) the risk, expense, and complexity of the litigation; (3) the significant amount offered in settlement; (4) the extend of discovery completed; (5) the experience and views of the parties’ counsel; (6) the participation of government entities in the litigation; and (7) the small amount of objections to the settlements.

The plan of allocation, which allows IPP class members to be compensated only for the overcharges they paid on CRT products, was also found to be fair, reasonable, and adequate as to class members. The notice to the class was determined to be reasonable, appropriate for the circumstances, and in compliance with due process standards.

Attorney fees. The special master noted that the combined settlement was the second largest monetary recovery in any indirect purchaser price fixing case, which weighed heavily in favor of an upward adjustment in the Ninth Circuit’s benchmark of 25 percent for attorneys’ fees. Thus, he recommended an award of attorneys’ fees to IPP class counsel in the amount of $173,250,000, which was equal to 30 percent of the settlement fund. The special master computed the class counsel’s lodestars at current billing rates and then reduced that figure by 10 percent to account for inefficiencies and work that did not benefit the class.

Finally, the class counsel’s request for an award for litigation expenses in the amount of $7.6 million was approved as well as incentive awards of $15,000 for each of the 25 court-approved class representatives.

The case is No. 3:07-cv-5944.

Attorneys: 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) and Cadio R. Zirpoli (Saveri & Saveri, Inc.) for Hawel A. Hawel and Orion Home Systems, LLC. Joel Steven Sanders (Gibson, Dunn & Crutcher LLP) and Adam C. Hemlock (Weil Gotshal and Manges LLP) for Chunghwa Picture Tubes, Ltd. Eliot A. Adelson (Kirkland & Ellis LLP) for Hitachi, Ltd.

Companies: Chunghwa Picture Tubes, Ltd.; Hitachi, Ltd.; LG Electronics, Inc.; Samsung SDI Company, Ltd.; Mitsubishi Electric Corp.; Crago, Inc.; Orion Home Systems, LLC

Cases: Antitrust CaliforniaNews