Antitrust Law Daily Wrap Up, ANTITRUST—NDCal: Court Refused to Certify Appeal of Denial of Summary Judgment in CRT Price Fixing Litigation, (Feb 15, 2013)

By Tobias J. Gillett, J.D., LLM.

In a putative class action alleging price fixing of cathode ray tubes (CRTs) by manufacturers and suppliers of the CRTs, the federal district court in San Francisco has refused to certify an appeal of its order denying the CRT providers’ motion for summary judgment against nine named direct purchasers plaintiffs (DPPs) on the ground that the DPPs satisfied the “ownership or control” exception to the Illinois Brick doctrine (In Re: Cathode Ray Tube (CRT) Antitrust Litigation, February 13, 2012, Conti, S.).

The appeal would not present a controlling question of law, no substantial ground for difference of opinion existed regarding the law the court relied on in reaching its decision, and immediate appeal would not be beneficial for advancing resolution of the litigation, in the court’s view.

In a previous decision (In re: Cathode Ray Tube (CRT) Antitrust Litigation, November 29, 2012, Conti, S.), the CRT providers had moved for summary judgment against nine members of a putative class of alleged direct purchasers plaintiffs (DPPs) on the ground that the DPPs lacked antitrust standing under the Illinois Brick doctrine. The CRT providers claimed that the named DPPs were not true direct purchasers in that they had purchased finished products containing the CRTs and not the CRTs themselves.

The court in that decision had addressed two exceptions to the Illinois Brick rule—the “co-conspirator exception” and the “ownership or control exception.” The court granted the CRT providers’ motion as to the co-conspirator exception, observing that the named DPPs had not paid for the CRTs as required by that exception.

However, the court denied the motion as to the ownership or control exception, because the named DPPs had “purchased finished products incorporating the allegedly pricefixed CRTs from an entity owned or controlled by an allegedly conspiring defendant,” and therefore that exception did apply. The CRT providers’ present motion sought certification of the court’s order for interlocutory appeal.

Controlling question of law. The CRT providers first contended that the order presented a controlling question of law, because the named DPPs “would lack standing and their claims would be dismissed absent the ownership or control exception,” and “because resolving who possesses standing is critical to determining the parameters of the putative DPP class.”

The court disagreed, observing that “the direct and indirect purchasers’ class actions would continue regardless of the named DPPs’ standing,” and that plaintiffs who had opted out of the class action could still proceed with state law causes of action. The court concluded that the impact of the appeal relative to the scale of litigation would not “be controlling or material to the outcome of the case.”

Substantial ground for difference of opinion. The CRT providers next contended that “substantial ground for difference of opinion” existed regarding whether the rationale for the ownership and control exception—that “applying Illinois Brick too strictly would close off every avenue for private enforcement”—had force in this case, since “other avenues of private antitrust enforcement may remain open.” They also argued that the issue of whether the exception would apply to the DPPs’ purchase of downstream products, rather than the allegedly pricefixed CRTs, also left room for substantial “difference of opinion.”

The court rejected those arguments, noting that, although the CRT providers strongly disagreed with the court’s decision, the circuit court precedent on the issue appeared to be undisputed. The court concluded that it had applied Ninth Circuit precedent in a manner consistent with other cases, and with the Ninth Circuit’s “straightforward rule.”

Immediate appeal beneficial. Finally, the CRT providers contended that immediate appeal would “materially advance the resolution of the litigation” for a variety of reasons. The court disagreed, initially noting that appeal would not help resolve uncertainty regarding the ownership and control exception because “the Ninth Circuit has made itself clear on this issue.” Moreover, the argument that appeal would alter the settlement posture of the case was “unconvincing” because “appeal would almost always modify parties’ settlement postures in any given case.”

Furthermore, the Ninth Circuit would not necessarily resolve the issue before certification of a class in the case “unless the court were to stay the case,” a move to which the court was opposed, since the case had been pending since November 2007. In addition, appeal would not speed resolution of the litigation, because numerous claims would still remain for litigation. Therefore, the court denied the CRT providers’ motion for certification.

The case is No. 07-5944 SC.

Attorneys: Gregory Keith Arenson (Kaplan Fox & Kilsheimer LLP) for Meijer, Inc. Joel Steven Sanders (Gibson, Dunn & Crutcher LLP) for Chunghwa Picture Tubes, Ltd.

Companies: Meijer, Inc.; Chunghwa Picture Tubes, Ltd.

Cases: Antitrust CaliforniaNews