State of Florida, Office of the Attorney General, Department of Legal Affairs v. AU Optronics Corporation et al, No. 3:2010cv03517 - Document 29 (N.D. Cal. 2011)
Court Description: ORDER GRANTING DEFENDANTS' JOINT MOTION FOR PARTIAL STAY RE: FLORIDA AND MICHIGAN COMPLAINTS (SI, COURT STAFF) (Filed on 4/13/2011)
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State of Florida, Office of the Attorney General, Department of Legal Af...tronics Corporation et al Doc. 29 1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 IN RE: TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION / No. M 07-1827 SI MDL No. 1827 8 9 This Order Relates To: Case No. C 10-3517 SI Case No. C 10-3619 SI United States District Court For the Northern District of California 10 STATE OF FLORIDA, 11 Plaintiff, 12 13 14 ORDER GRANTING DEFENDANTS’ JOINT MOTION FOR PARTIAL STAY RE: FLORIDA AND MICHIGAN COMPLAINTS v. AU OPTRONICS CORP., et al., Defendants; _______________________________________/ 15 16 17 18 STATE OF MISSOURI, et al., Plaintiffs, v. AU OPTRONICS CORP., et al., Defendants. 19 / 20 21 On February 7, 2011, defendants moved to stay the claims of plaintiff Florida in State of Florida 22 v. AU Optronics Corp, et al., Case No. 10-3517, and plaintiff Michigan in State of Missouri, et al. v. AU 23 Optronics Corp., et al., Case. No. 10-3619, to the extent such claims are brought on behalf of non-State 24 consumers in either Florida or Michigan. The Court finds it appropriate to take the motion under 25 submission without oral argument. See Civ. L.R. 7-1(b). For the reasons set forth below, the motion 26 is GRANTED. 27 28 Dockets.Justia.com 1 BACKGROUND These parens patriae actions allege a global price-fixing conspiracy in the market for Thin Film 3 Transistor Liquid Crystal Display (“TFT-LCD”) panels. TFT-LCD panels are used in a number of 4 products, including but not limited to computer monitors, laptop computers, televisions, and a number 5 of other products. TFT-LCD panels are sold in a variety of sizes, and vary across a number of technical 6 dimensions. TFT-LCD panels have no independent utility, but have value only as components of other 7 products. When a TFT-LCD panel is incorporated into a finished product, the panel is not modified, 8 and remains a discrete, physical object within the finished product. TFT-LCD panels are purchased by 9 many different types and sizes of customers through different manufacturing and distribution channels. 10 United States District Court For the Northern District of California 2 In about 2006, the Antitrust Division of the Department of Justice began investigating a number 11 of the defendants’ alleged participation in a global conspiracy to fix prices of TFT-LCD panels. The 12 investigation is ongoing. To date, approximately seven corporate defendants have pled guilty to 13 Sherman Act violations relating to suppressing and eliminating competition by fixing the prices of TFT- 14 LCD panels, including Sharp Corporation (CR 08-802 SI); LG Display Co. Ltd. and LG Display 15 America, Inc. (CR 08-803 SI), Chunghwa Picture Tubes, Ltd. (CR 08-804 SI); Hitachi Displays Ltd. 16 (CR 09-247 SI); Epson Imaging Devices Corporation (CR 09-854 SI); and Chi Mei Optoelectronics 17 Corporation (CR 09-1166 SI). 18 On November 5, 2007, a class of indirect product purchasers (“IPP”) filed a consolidated 19 complaint which, among other things, brought claims on behalf of proposed classes of Florida and 20 Michigan consumers. The IPP’s Florida claims were brought under the Florida Deceptive and Unfair 21 Trade Practices Act (“FDUTPA”), and the Michigan claims were brought under the Michigan Antitrust 22 Reform Act (“MARA”). On March 28, 2010, the Court certified various classes in the IPP action, 23 including a Florida class and a Michigan class. 24 On August 11, 2010, the State of Florida filed a Complaint For Damages, Civil Penalties and 25 Injunctive Relief naming many of the same defendants as the IPP class action. (Case No. 10-3517, 26 Docket No. 1 (“Florida Complaint”).) The Florida Complaint alleges that “[t]he State of Florida brings 27 this action against the Defendants under the Sherman Act, the Clayton Act, the Florida Antitrust Act, 28 and the [FDUTPA] on behalf of itself and its governmental entities, and on behalf of natural persons in 2 1 Florida.” (Florida Complaint ¶ 1.) The Florida Complaint alleges that defendants “conspired to 2 suppress and eliminate competition by fixing the prices of TFT-LCD Panels, and to suppress and 3 eliminate competition by agreeing to limit the production of TFT-LCD Panels.” (Id. ¶ 2.) The Florida 4 Complaint asserts certain direct and indirect purchaser claims allegedly assigned to it by retailers with 5 which the State has contractual agreements. (Id. ¶¶ 107-113.) The Florida Complaint also asserts a 6 claim under the FDUTPA “for all direct and indirect purchases of TFT-LCD Panels and TFT-LCD 7 Products by governmental entities and consumers in the State of Florida.” (Id. ¶ 126.) Florida prays 8 for declaratory relief, equitable relief, treble damages, statutory damages, restitution and civil penalties. 9 (Id. ¶ 129.) United States District Court For the Northern District of California 10 On August 17, 2010, the States of Missouri, Arkansas, Michigan, West Virginia and Wisconsin 11 filed a Complaint For Damages, Civil Penalties, Injunctive and Other Relief naming many of the same 12 defendants named in the IPP class action. (Case No. 10-3619, Docket No. 1 (“Michigan Complaint”).) 13 The Michigan Complaint is in many respects similar to the Florida Complaint and alleges a conspiracy 14 to suppress and eliminate competition in the market for TFT-LCD Panels. Michigan brings the civil 15 action “in the name of the State of Michigan, as parens patriae on behalf of natural persons residing in 16 Michigan, and on behalf of itself and its State Agencies.” (Id. ¶ 16.) The Michigan Complaint further 17 alleges that “[u]nder Michigan law, the Attorney General may obtain injunctive relief, be awarded treble 18 damages, or otherwise recover all ascertainable losses incurred by virtue of overcharges paid by the 19 State of Michigan, its State agencies, and natural persons, be awarded civil penalties arising from any 20 violations of Michigan law, and obtain other equitable and statutory relief.” (Id.) Count Four of the 21 Michigan Complaint alleges a violation of MARA and states that “the State of Michigan, its State 22 Agencies, and natural persons that directly or indirectly purchased TFT-LCD products are entitled to 23 damages and other equitable relief pursuant to [MARA] for losses incurred directly or indirectly as a 24 result of Defendants’ conduct alleged herein.” (Id. ¶ 131.) 25 26 LEGAL STANDARD 27 Defendants’ motion is based on the first-to-file rule. The first-to-file rule was developed to 28 “serve the purpose of promoting efficiency well and should not be disregarded lightly.” Alltrade, Inc. 3 v. Uniweld Prods, Inc., 946 F.2d 622, 625 (9th Cir. 1991), quoting Church of Scientology v. United 2 States Dep’t of the Army, 611 F.2d 738, 750 (9th Cir. 1979). Under the first-to-file rule, a district court 3 may transfer, stay or dismiss an action when a similar action has been filed in another district court. See 4 Alltrade, 946 F.2d at 625-26. When deciding whether to apply the first-to-file rule, the court must look 5 at three factors: (1) the chronology of the two actions; (2) the similarity of the parties; and (3) the 6 similarity of issues. Id. The fact that there are additional defendants in one of the actions is not 7 dispositive. Barapind v. Reno, 72 F. Supp. 2d 1132, 1145 (E.D. Cal. 1999) (“If the parties ‘represent 8 the same interests’ the court may determine the second action is duplicative.”). In a class action, the 9 classes, and not the class representatives, are compared. Weinstein v. Metlife, Inc., 2006 WL 3201045 10 United States District Court For the Northern District of California 1 at *4 (N.D. Cal. 2006) (Illston, J.), citing Cal. Jur. 3d Actions § 284. “Exact parallelism between the 11 two actions need not exist; it is enough if the parties and issues in the two actions are ‘substantially 12 similar.’” Alioto v. Hoiles, 2004 WL 2326367 at *5 (N.D. Cal. 2004) (Hamilton, J.) 13 14 DISCUSSION 15 Defendants move to stay the claims of Florida and Michigan to the extent that they are brought 16 on behalf of natural persons (i.e., purchasers other than the state or state entities). (Motion at 1.) 17 Defendants contend that the parens patriae claims asserted on behalf of Florida and Michigan 18 consumers overlap with the class claims asserted in the IPP class action,1 which was filed long before 19 the Florida and Michigan Complaints. (Id.) As a result, defendants argue that the first-to-file rule 20 requires that the later-filed parens patriae claims asserted on behalf of absent non-state purchasers be 21 stayed pending resolution of the IPP class action. (Id.) In the alternative, defendants request that the 22 claims asserted on behalf of the Florida and Michigan classes in the IPP class action be stayed pending 23 the resolution of those States’ parens patriae claims. (Id.) 24 Plaintiffs Florida and Michigan oppose the motion on the ground that the parens patriae claims 25 1 26 27 28 The Florida Complaint asserts claims for “direct and indirect purchases . . . by . . . consumers” (Id. ¶ 126), and the Michigan Complaint asserts claims for “natural persons that directly or indirectly purchased TFT-LCD products.” (Id. ¶ 131.) Given the structure of the market, direct purchases by consumers are unlikely, but possible. To the extent they occurred, they would be subject to the same first-to-file policy considerations discussed in this order, but with respect to the direct product purchaser class actions. 4 are fundamentally different than the IPP class action, that the states will be damaged if a stay is imposed 2 and that judicial economy will be served by allowing the cases to continue. (Florida’s Opposition at 1; 3 Michigan’s Opposition at 1.) In particular, Florida and Michigan argue that the States, not the 4 consumers on whose behalf the claims are brought, constitute the actual parties to the litigation, and that 5 the parens patriae actions and the consumer class action are therefore not duplicative. (Florida 6 Opposition at 6.) Florida and Michigan also contend that the issues raised in the parens patriae suits 7 differ from the IPP class action because the statutes under which their actions are brought authorize 8 various remedies not available in the IPP class action and, in the case of Florida, the parens patriae 9 action involves conduct that predates the IPP class period. (Florida Opposition at 7-13; Michigan 10 United States District Court For the Northern District of California 1 Opposition at 3-4.) If the Court determines that the Florida IPP class action and the parens patriae 11 action are duplicative, Florida requests that — rather than impose a stay — the Court issue a 12 consolidated schedule for the two actions. (Florida Opposition at 21.) 13 Preliminarily, it appears that defendants and plaintiffs frame their respective comparisons of the 14 IPP class action and the parens patriae actions differently. Though it is not entirely clear, plaintiffs 15 appear to compare the IPP class action to the Florida and Michigan parens patriae actions in their 16 entirety, including those claims asserted on behalf of, for example, the state and its various agencies. 17 (See Florida Opposition at 9-12.) However, the instant motion is concerned solely with those claims 18 asserted by Florida and Michigan on behalf of natural persons (“non-State consumers”) in their 19 respective states. (Motion at 1, Reply at 4.) Moreover, the Court does not interpret defendants’ motion 20 as requesting a stay of claims that were contractually assigned to the State. (See Florida Complaint ¶¶ 21 107-113; Michigan Complaint ¶¶ 99-109.) As a result, the appropriate comparison is between the 22 claims asserted by Florida and Michigan on behalf of natural persons in their states to those asserted in 23 the IPP class action on behalf of the Florida and Michigan classes. 24 With that comparison in mind, the Court concludes that a limited stay is appropriate. First, it 25 is undisputed that the IPP consolidated complaint was filed several years before the parens patriae 26 actions filed by Florida and Michigan. Second, the parties in both actions are substantially similar. 27 Though Florida and Michigan are correct that the States, and not individual consumers, are the named 28 parties in a parens patriae action, certain of their claims are asserted “on behalf” of individual 5 consumers of TFT-LCD products. This Court has already held in the context of class action lawsuits 2 that it is the class, not the class representatives, that are relevant for purposes of the first-to-file rule. 3 Weinstein, 2006 WL 3201045 at *4. Because Plaintiffs seek to assert claims on behalf of absent 4 consumers, a similar approach is appropriate here. Moreover, the Court finds that the composition of 5 the absent classes in the parens patriae actions are substantially similar to the Florida and Michigan 6 classes certified in the IPP class action. (See M 07-1827, Docket No. 1642 at 37-38) (certifying classes 7 including all persons and entities in Michigan and Florida “who, from January 1, 1999 to December 31, 8 2006 . . . purchased LCD panels incorporated in televisions, monitors, and/or laptop computers . . . .”) 9 Finally, the issues raised in the two lawsuits are substantially similar. Both the parens patriae actions 10 United States District Court For the Northern District of California 1 and the IPP class action allege a broad conspiracy to fix the price of TFT-LCD products among nearly 11 identical groups of defendants and over essentially the same period of time. Both the Michigan parens 12 patriae action and the IPP class action allege violations of MARA. (Compare Michigan Complaint ¶¶ 13 127-131 with IPP Second Amended Complaint ¶ 267.) Both the Florida parens patriae action and the 14 IPP class action allege violations of the FDUTPA. (Compare Florida Complaint ¶¶ 125-128 with IPP 15 Second Amended Complaint ¶ 287.) 16 conduct that occurred in 1998 while the IPP class action is limited to conduct that occurred on or after 17 January 1, 1999, Florida provides no basis on which the Court could find that the alleged conduct in 18 1998 substantially changes the character of the issues involved in the case in a way that would 19 distinguish its claims from those of the IPP class. Accordingly, the Court finds that the first-to-file rule 20 and the general interest in judicial efficiency supports a limited stay in this case. Although the Florida parens patriae action relies in part on 21 22 CONCLUSION 23 For the foregoing reasons, the Court GRANTS defendants’ motion to stay as follows. (Case No. 24 07-1827, Docket No. 2406; Case No. 10-3517, Docket No. 16; Case No. 10-3619, Docket No. 20.) All 25 claims asserted by Florida or Michigan on behalf of natural persons in those states are hereby STAYED. 26 This order shall not apply to any claim brought on behalf of the State of Florida or its agencies, any 27 claim brought on behalf of the State of Michigan or its agencies, or any claim that plaintiffs allege was 28 contractually assigned to the State of Florida or the State of Michigan. 6 1 2 This stay shall remain in effect until the earlier of: entry of judgment with respect to Florida or Michigan classes certified in the IPP class action (Case No. 07-1827) or April 30, 2012. 3 4 IT IS SO ORDERED. 5 6 Dated: April 13, 2011 SUSAN ILLSTON United States District Judge 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7
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