Antitrust Law Daily Wrap Up, ANTITRUST—NDCal: Best Buy’s LCD Price Fixing Claims Consolidated into Group Set for Trial Next Year, (Dec 17, 2012)

By E. Darius Sturmer, J.D.

Retailer Best Buy Co., Inc., was permitted by the federal district court in San Francisco to consolidate its complaint against the corporate families of two manufacturers of thin-film transistor liquid crystal display (LCD) panels, Toshiba and Philips, that it accused of participating in a long-running conspiracy to fix the prices of LCD panels with a series of other related cases in the sprawling multidistrict antitrust litigation that are set to go to trial next June (In re: TFT-LCD (Flat Panel) Antitrust Litigation, December 13, 2012, Illston, S.).

Best Buy’s complaint against Toshiba and Philips was not the first it filed in the litigation. It filed a similar suit against eight other corporate families in October 2010 (dubbed “Best Buy I” by the court) before bringing the case against Toshiba and Philips—“Best Buy II”—in August of this year. However, the two cases were assigned by the court to different “tracks,” groupings of cases stuck together based on when they were filed and what types of claims were asserted. While Best Buy I was put alongside complaints by Target and Kodak into Track 1B, a group currently scheduled to begin trial in June 2013, Best Buy II was made part of Track 2, a group of later-filed claims by original equipment manufacturers and retailers for which no trial date has yet been established.

Mindful of the court’s expressed inclination to hold a single trial for all Best Buy defendants, both Best Buy and Toshiba favor consolidation of the two cases, but into different tracks. Best Buy asserted that consolidation into Track 1B, in which Toshiba is already a defendant, would promote judicial efficiency and would preserve party and judicial resources.

Toshiba, arguing that Best Buy’s requested consolidation would deprive it of its right to adequately defend itself in the action because the relevant tasks could not be completed on the Track 1B timeframe, maintained that the actions should be consolidated into Track 2.

The interests of judicial efficiency, including the prompt resolution of the cases under the Track 1B schedule, outweighed any prejudice to Toshiba, in the court’s view. The court noted that Toshiba has been involved in the proceedings in the multidistrict litigation, including a six-week trial, for over five years already. Moreover, it would be preparing for a June 2013 trial against Target anyway, a case raising very similar legal and factual claims. While there would inevitably be new issues in a trial with Best Buy, the Track 1B schedule provided sufficient time for the parties to complete whatever was necessary for that trial.

In response to Toshiba’s contention that sufficient time did not remain to complete expert testimony, the court found it unlikely that new, complex issues requiring expert testimony could not be completed under the proposed Track 1B schedule. Best Buy had already agreed to stand on the expert reports it submitted in Track 1 in December 2011 and May 2012 to facilitate consolidation, the court noted. Although Toshiba did not engage in expert discovery with respect to Best Buy specifically, it was actively engaged in such discovery in the Target action, in which three out of four of Best Buy’s experts submitted identical reports on behalf of the Target plaintiffs. Enough time remained for discovery pertaining to the fourth expert, who was not involved in the Target action.

The court rejected an assertion by Toshiba that it was deprived of the opportunity to respond to the Track 1 plaintiffs’ use of “new versions of damages models, new justifications for their flawed damages models, and voluminous quantitative analyses criticizing [the d]efendants’ damages model.” Sufficient time also remained for any recalculations of damages necessitated by the disposal of certain Best Buy claims, such as its direct purchaser claims under Minnesota state law.

The court additionally dispelled Toshiba’s concerns that consolidation into Track 1B would prejudicially restrict fact and expert discovery and deny it adequate time to make dispositive motions. Toshiba had already brought summary judgment motions on several issues in other cases within the litigation and should be able to file such motions against Best Buy if it chose to, the court said. Taking into consideration that Toshiba had already been through trial once in connection with the LCD price fixing conspiracy, and would be preparing for trial in the very similar Target action, the court deemed Toshiba’s counsel well-equipped to prepare for trial within the Track 1B schedule.

Finally, the court rejected Toshiba’s argument that it would be virtually impossible to complete fact discovery along with expert discovery, dispositive motions, and pretrial preparation within the timeframe required of a Track 1B case. Given the “significant overlap of expert discovery in the Track 1 cases and Best Buy II, the unlikelihood there [would] be complex, non-duplicative dispositive motions, and Toshiba’s ability to adequately prepare for trial,” sufficient time existed under the Track 1B schedule to complete fact discovery.

The consolidated multidistrict litigation is No. M 07-1827 SI, MDL No. 1827. The court’s order relates to Case No. C 12-4114 SI within that litigation.

David Martinez (Robins Kaplan Miller & Ciresi L.L.P.) for Best Buy Co., Inc. John H. Chung (White & Case LLP) for Toshiba Corp.

Cases: Antitrust CaliforniaNews