Antitrust Law Daily Wrap Up, ANTITRUST—NDCal: Settlement Between Manufacturers, Sellers of Optical Disk Drives and Class of Purchasers Provisionally Approved, (Mar 26, 2013)

By Peter Reap, J.D., LLM

A settlement between several manufacturers and sellers of optical disk drives (“ODDs”) and a class of purchasers that alleged illegal price fixing was given preliminary approval, subject to a hearing on the final approval of the settlement agreement (the “Fairness Hearing”) by the federal district court in San Francisco (In re Optical Disk Drive Antitrust Litigation, March 22, 2013, Seeborg, R.). The settlement between the class and the two settling defendants Hitachi-LG Data Storage, Inc. and Hitachi-LG Data Storage Korea, Inc. (collectively, “HLDS”), also released LG Electronics, Inc. and Hitachi, Ltd. (the parent companies of HLDS) and LG Electronics USA, Inc.

The remaining defendants were not released and the case would proceed against them. These non-released defendants included Sony Corp., NEC Corp., Toshiba Corp., and Samsung Electronics Co., Ltd., among others.

Specifically, the class alleged that the manufacturers and/or sellers unlawfully conspired to fix prices in violation of the Sherman Act. The alleged conspiracy entailed a discrete number of entities—many of which were interrelated—but did not extend generally to the vast number of entities involved in the manufacturing and selling of products containing ODDs obtained from those defendants.

The complaints detailed a series of over two dozen instances of bid rigging involving procurements of ODDs by computer manufacturers that were members of the putative class and another involving a computer operating system and software company, articulated a specific theory as to how the pattern of bid rigging reflected an overall effort to stabilize ODD prices, and included allegations of relevant communications between various entities

Pursuant to Federal Rule of Civil Procedure 23, the court provisionally certified the following settlement class:

All individuals and entities who, during the period from January 1, 2004 through December 31, 2011 (the “Class Period”), purchased Optical Disk Drives and Optical Disk Drive Devices in the United States directly from the Defendants, their subsidiaries, or their affiliates. Excluded from the Class are defendants and their parents, subsidiaries, affiliates, and all governmental entities.

The court further determined that the prerequisites to certifying a settlement were satisfied in that: (1) there were hundreds of geographically dispersed settlement class members, making joinder of all members impracticable; (2) there were questions of law and fact common to the settlement class which predominate over individual issues; (3) the claims or defenses of the settlement class plaintiffs were typical of the claims or defenses of the settlement class; (4) the plaintiffs would fairly and adequately protect the interests of the settlement class, and have retained counsel experienced in antitrust class action litigation who have, and would continue to, adequately represent the settlement class; and (5) a settlement class resolution was superior to individual settlements.

The court appointed the plaintiffs named in the Second Consolidated Direct Purchaser Class Action Complaint, filed September 23, 2011, as Representative Plaintiffs of the settlement class. It also appointed the law firm of Saveri & Saveri, Inc. to serve as Class Counsel for the settlement class.

The court approved the proposed forms of the Long Form Notice and of the Short Form Notice. Taken together, mailing of the Long Form Notice (U.S Mail or electronic mail), publication of the Short Form Notice, and Internet posting of the Long Form Notice were: (1) the best notice practicable; (2) reasonably calculated to, under the circumstances, apprise the settlement class members of the proposed settlements and of their right to object or to exclude themselves as provided in the settlement agreements; (3) reasonable and constituted due, adequate, and sufficient notice to all persons entitled to receive notice; and (4) met all applicable requirements of due process and any other applicable requirements under federal law, the court explained.

The court scheduled a Fairness Hearing on August 15, 2013 at 1:30 p.m. The Fairness Hearing would be conducted to determine:

1. Whether each proposed settlement is fair, reasonable, and adequate and should be granted final approval;

2. Whether final judgment should be entered dismissing the claims of the settlement class against Defendants Hitachi-LG Data Storage, Inc., Hitachi-LG Data Storage Korea, Inc., LG Electronics, Inc., LG Electronics USA, Inc., and Hitachi, Ltd.;

3. Approval of the plan of allocation; and

4. Such other matters as the court may deem appropriate.

Each member of the settlement class would retain all rights and causes of action with respect to claims against all defendants other than Hitachi-LG Data Storage, Inc., Hitachi-LG Data Storage Korea, Inc., LG Electronics, Inc., LG Electronics USA, Inc., and Hitachi, Ltd. regardless of whether such member of the settlement class decided to remain in the settlement class or to exclude itself from the settlement class.

Attorneys: Dianne M. Nast (NastLaw LLC) for CMP Consulting Services, Inc. Jane E. Willis (Ropes & Gray LLP) for Hitachi-LG Data Storage, Inc.

Companies: CMP Consulting Services, Inc.; Sony Corp..; Hitachi-LG Data Storage, Inc.; Hitachi-LG Data Storage Korea, Inc.; LG Electronics, Inc.; LG Electronics USA, Inc.; Hitachi, Ltd.; NEC Corp.; Toshiba Corp.; Samsung Electronics Co., Ltd.

Cases: Antitrust CaliforniaNews