Antitrust Law Daily Wrap Up, ANTITRUST—NDCal: Summary Judgment on Statute of Limitations and Damage Mitigation Grounds Denied in LCD Litigation, (Dec 11, 2012)

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

The federal district court in San Francisco has denied liquid crystal display (LCD) panel suppliers’ motion for partial summary judgment on statute of limitations and damage mitigation grounds against Best Buy, and has permitted Best Buy to amend its complaint to assert allegations concerning equitable tolling of the statute of limitations (Best Buy v. AU Optronics Corp., December 10, 2012, Illston, S.).

Best Buy filed its complaint in its price fixing case against the LCD suppliers on October 8, 2010. The suppliers raised a defense based on the Clayton Act’s four-year statute of limitations, arguing that the court should grant summary judgment with regard to Best Buy’s claims concerning conduct prior to October 8, 2006.

Best Buy responded by contending that the suppliers had fraudulently concealed that conduct, entitling Best Buy to toll the statute of limitations during that period. Tolling of the statute of limitations under a fraudulent concealment theory requires that the plaintiff did not discover, and could not have discovered through the exercise of reasonable diligence, the existence of the conspiracy.

The suppliers argued that evidence, such as Best Buy documents and e-mails referring to the LCD suppliers as a “cartel,” demonstrated that Best Buy knew of the alleged conspiracy as early as May 15, 2003. However, Best Buy provided evidence that the “cartel” reference was copied and pasted from one document to another and did not appear with any other facts indicating knowledge of a “cartel,” that the cartel reference was merely considered to be an excuse given by a laptop manufacturer for its inability to meet laptop demand, and that employees took some stops to investigate LCD shortages with no results. Best Buy also submitted deposition evidence from Best Buy employees that the company did not know of the conspiracy. The court concluded that this “disputed evidence” did not support summary judgment for the LCD suppliers.

The court also declined to grant summary judgment for the LCD suppliers on their argument that Best Buy had failed to mitigate its damages, citing its recent decision in the same multi-district litigation denying summary judgment to the LCD suppliers on claims brought by Dell Inc. (2012-2 Trade Cases ¶78,161). In that decision, the court had found that argument “unpersuasive,” and had declined to hold that the suppliers could assert mitigation of damages as a defense to a horizontal price fixing claim.

Best Buy further sought leave to amend its complaint to assert allegations relevant to equitable tolling of the statute of limitations. Best Buy stated that it had thought its allegations in its first amended complaint were sufficient to allege the equitable tolling, but that the court’s decision in an order relating to claims brought by ViewSonic Corp. (2012-2 Trade Cases ¶78,085) “suggest[ed] that the Court requires more thorough explanations of each tolling theory in the pleadings.”

The court granted leave to amend, weighing the factors the federal courts generally employ in considering a request to amend, including “bad faith, undue delay, prejudice to the opposing party, and futility of amendment,” and noting that under Ninth Circuit precedent delay is, by itself, “insufficient to justify denial of leave to amend.” The suppliers had argued only that Best Buy had unduly delayed in seeking amendment, and should have known from other orders that amendment would be required. However, the court accepted Best Buy’s assertion that it did not know of the need to amend until the ViewSonic order, and in any event the court found delay was insufficient to deny leave to amend.

The case is No.10-4572 SI, MDL No. 07-1827 SI.

David Martinez (Robins Kaplan Miller & Ciresi L.L.P.) for Best Buy Co., Inc. John C. McGuire (Sedgwick, Detert, Moran & Arnold) for AU Optronics Corporation America.

Cases: Antitrust CaliforniaNews