Antitrust Law Daily Wrap Up, TOP STORY—N.D. Cal.: Capacitor price fixing claims may proceed under California law, not 31 other states’ laws, (Jan 4, 2016)

By Greg Hammond, J.D.

Allegations that capacitor manufacturers engaged in a price fixing conspiracy, in violation of 32 states’ antitrust and consumer protection laws, could proceed under California law only, the federal district court in San Francisco has concluded. Claims brought under the remaining 31 states’ laws were dismissed for lack of Article III standing because none of the named plaintiffs purchased the products subject to the alleged price fixing in those states (In re Capacitors Antitrust Litigation, December 30, 2015, Donato, J.).

Direct and indirect purchasers of capacitors—basic functional units in electronic circuits that generally operate to store energy on a short-term basis—claim that capacitor manufacturers engaged in a multi-year price fixing conspiracy for electrolytic and film capacitors. The manufacturers moved to dismiss the amended complaint.

Article III standing. The court first partially granted the manufacturers’ motion to dismiss the indirect purchasers’ non-California state law claims for lack of Article III standing. It reasoned that to have standing under Article III to bring a state-law antitrust or related consumer protection claim in a price fixing class action, a named plaintiff must have purchased the alleged price fixed product in the state under whose law he or she seeks to bring a claim. The indirect purchasers, however, admitted that they do not have plaintiffs for the 31 states whose laws are asserted other than California. They were nevertheless given the option to amend their complaint.

Conspiracy participation. The manufacturers’ motions to dismiss the direct purchasers’ claims were mostly denied. Allegations that an AVX Corp. representative stated that the company once raised the prices of in-vehicle tantalum capacitors products in conjunction with another defendant and participated in a meeting with a Sanyo representative, in which they discussed plans to raise capacitors prices in order to pursue profits and limited production, were sufficient to state a claim.

Subsidiary liability. Similarly, allegations that the manufacturers participated in cartel meetings, that they understood that other participants entered into agreements and understandings on behalf of all entities within their respective corporate enterprises, and that the Japan-based defendants established U.S. subsidiaries to effectuate and achieve the cartel’s aims and purposes were sufficient to state a claim against Holy Stone Enterprise Co., Ltd., Milestone Global Technology, Inc., and Hitachi Chemical Co. America, Ltd.

However, allegations against American Shizuki Corp.—a subsidiary of Shizuki Electric Co., Inc.—were dismissed with leave to amend. The allegations against American Shizuki were “too paltry,” according to the court, because the subsidiary was not named in the list of subsidiaries alleged to have acted to effectuate and achieve the cartel’s aims and purposes.

The case is No. 14-cv-03264-JD.

Attorneys: C. Andrew Dirksen (Cera LLP) and Joseph J. DePalma (Lite DePalma Greenberg, LLC) for Chip-Tech, Ltd. C. Andrew Dirksen (Cera LLP) and Steven J. Greenfogel (Lite DePalma Greenburg, LLC) for Dependable Component Supply Corp. Jeffrey L. Kessler (Winston & Strawn LLP) for Panasonic Corp., Panasonic Corp. of North America and Sanyo Electric Group, Ltd. Bruce Douglas Sokler (Mintz Levin Cohn Ferris Glovsky and Popeo) for AVX Corp. Jeffrey Alan LeVee (Jones Day) for Holy Stone Enterprise Co., Ltd. and Milestone Global Technology, Inc. Chul Pak (Wilson Sonsini Goodrich and Rosati) and Edmundo Clay Marquez (O'Melveny & Myers LLP) for Hitachi Chemical Co., Ltd. and Hitachi Chemical Company America, Ltd. Allison Ann Davis (Davis Wright Tremaine LLP) for Shizuki Electric Co., Ltd. and American Shizuki Corp.

Companies: Chip-Tech, Ltd.; Dependable Component Supply Corp.; Panasonic Corp.; Panasonic Corp. of North America; Sanyo Electric Group, Ltd.; AVX Corp; Holy Stone Enterprise Co., Ltd.; Milestone Global Technology, Inc.; Hitachi Chemical Co., Ltd.; Hitachi Chemical Company America, Ltd.; Shizuki Electric Co., Ltd.; American Shizuki Corp.

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