Antitrust Law Daily Wrap Up, ANTITRUST—NDCal: Criminal Conspiracy Ruling Did Not Preclude Sherman Act Claims, (Oct 15, 2012)

By Jody Coultas, J.D.

The federal district court in San Francisco has denied Dell Inc.’s motions for partial summary judgment against AU Optronics Corporation and Toshiba American Electronics Components, Inc. on liability issues in a case involving a liquid crystal display panel price-fixing conspiracy (In Re: TFT-LCD (Flat Panel) Antitrust Litigation, October 11, 2012, Illston, S.).

Dell sought a ruling that AU violated the Sherman Act by fixing the price of TFT-LCD panels sold to Dell and other customers and that the conspirators derived gains from the conspiracy. According to Dell, a review of the evidence, pleadings, and testimony at the AU trial confirmed that the price-fixing conspiracy proved by the Department of Justice was identical to the allegations filed by Dell.

Issue preclusion applies where a plaintiff seeks to prevent a defendant from relitigating an issue that the defendant previously litigated unsuccessfully in a separate action against a different party. A party invoking issue preclusion must show: (1) the issue at stake is identical to an issue raised in the prior litigation; (2) the issue was actually litigated in the prior litigation; and (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in the earlier action.

The court denied Dell’s motion for partial summary judgment on liability issues determined in the AU criminal case. Dell could not show with clarity and certainty that the allegedly precluded issues were actually determined by the jury and that a determination of the issues was a critical and necessary part of the judgment in the earlier action. The jury made no finding regarding the duration of the conspiracy or the identity of the conspiracy’s participants. The basis of a criminal violation of the Sherman Act differs from what must be proven to establish liability on a civil Sherman Act claim.

Dell failed to meet its burden to show that it could assert offensive non-mutual issue preclusion, according to the court. Dell’s claims were not before the jury when it decided a direct purchaser’s plaintiff’s case, and the jury could not have concluded that Toshiba knowingly participated in a conspiracy to fix, raise, maintain, or stabilize the prices of TFT-LCD panels sold to Dell.

The jury did not make any findings regarding the identity of Toshiba’s alleged co-conspirators or the duration of the conspiracy. The substantial overlap between the pleadings and evidence in the Toshiba direct purchasers plaintiffs’ case and Dell’s case was insufficient to demonstrate that the issues for which Dell sought preclusive effect were identical to those that were actually litigated and decided in the previous trial.

The case is No. C 10-1064 SI.

Steven Daniel Hemminger (Alston & Bird LLP) for Dell Inc. K.C. Maxwell (Law Office of K.C. Maxwell) for AU Optronics Corporation. Christopher M. Curran (White & Case) for Toshiba American Electronic Components, Inc.

Cases: Antitrust CaliforniaNews