MetroPCS Wireless Inc v. AU Optronics Corporation et al, No. 3:2011cv00829 - Document 73 (N.D. Cal. 2011)
Court Description: ORDER DENYING DEFENDANTS' JOINT MOTION TO DISMISS METROPCS'S FIRST AMENDED COMPLAINT (SI, COURT STAFF) (Filed on 10/26/2011)
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MetroPCS Wireless Inc v. AU Optronics Corporation et al Doc. 73 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 IN RE: TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION / No. M 07-1827 SI MDL No. 1827 10 This Order Relates To: No. C 11-0829 SI 11 METROPCS WIRELESS, INC., ORDER DENYING DEFENDANTS’ JOINT MOTION TO DISMISS METROPCS’S FIRST AMENDED COMPLAINT United States District Court For the Northern District of California 9 12 13 Plaintiff, v. 14 AU OPTRONICS CORPORATION, et al., 15 Defendants. / 16 17 Now before the Court is defendants’ joint motion to dismiss MetroPCS’s first amended 18 complaint (“FAC”) under Federal Rule of Civil Procedure 12(b)(6). Pursuant to Civil Local 19 Rule 7-1(b), the Court finds this matter suitable for disposition without oral argument and therefore 20 VACATES the hearing currently scheduled for October 28, 2011. Having considered the papers of the 21 parties, and for good cause appearing, the Court hereby DENIES defendants’ motion. 22 23 BACKGROUND 24 Plaintiff MetroPCS “provide[s] wireless mobile telecommunication services in selected major 25 metropolitan areas in the United States.” FAC at ¶20. It filed this action in the Northern District of 26 Texas on December 17, 2010, seeking to recover for a “long-running conspiracy . . . to fix, raise, 27 stabilize, and maintain prices for Liquid Crystal Display panels . . . .” See Compl. at ¶1. The action was 28 subsequently transferred to this Court as part of MDL No. 1827, and, on July 8, 2011, MetroPCS filed Dockets.Justia.com 1 its FAC. 2 The FAC alleges that MetroPCS purchased “mobile wireless handsets” that contained price-fixed 3 LCD panels. FAC at ¶238-39. It includes antitrust claims under the Sherman Act, California’s 4 Cartwright Act, the Illinois Antitrust Act, and New York’s Donnelly Act, as well as a claim under 5 California’s Unfair Competition Law. FAC at ¶¶263-300. The FAC names as defendants entities from 6 ten corporate families: Epson1; Hitachi2; Mitsui3; Sanyo4; Sharp5; Toshiba6; AU Optronics7; Chi Mei8; 7 Chunghwa Pictures Tubes9; and Hannstar10. FAC at ¶¶28-59. On August 5, 2011, defendants filed a joint motion to dismiss MetroPCS’s FAC. Defendants 9 argue that the FAC’s claims under the Illinois Antitrust Act are untimely. Defendants also argue that 10 United States District Court For the Northern District of California 8 the FAC fails to adequately plead the involvement of each defendant in the price-fixing conspiracy and 11 fails to allege sufficient facts to support its claim of a conspiracy to fix prices of small LCD panels. In 12 addition, defendant Sanyo Consumer Electronics Co., Ltd. (“Sanyo”) filed a separate joinder in 13 defendants’ motion. Sanyo asserts that the FAC does not include sufficient factual allegations to support 14 its contention that Sanyo participated in the conspiracy. 15 16 17 1 18 2 19 3 20 4 21 5 22 6 Epson Imaging Devices Corporation and Epson Electronics America, Inc. Hitachi, Ltd., Hitachi Displays, Ltd., and Hitachi Electronic Devices (USA), Inc. Mitsui & Co. (Taiwan), Ltd. and Mitsui & Co. (USA), Inc. Sanyo Consumer Electronics, Ltd. Sharp Corporation and Sharp Electronics Corporation. Toshiba Corporation, Toshiba Matsushita Display Technology Co., Ltd., Toshiba America Electronics Components, Inc., and Toshiba America Information Systems, Inc. 23 7 AU Optronics Corporation and AU Optronics Corporation America. 24 8 25 Chi Mei Optoelectronics Corporation, CMO Japan Co. Ltd., and Chi Mei Optoelectronics USA, Inc. 26 9 27 10 28 Chunghwa Pictures Tubes, Ltd. and Tatung Company of America, Inc. Hannstar Display Corporation. 2 1 LEGAL STANDARD 2 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint that 3 fails to state a claim upon which relief may be granted. To survive a Rule 12(b)(6) motion to dismiss, 4 the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. 5 Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard requires the plaintiff 6 to allege facts that add up to “more than a sheer possibility that a defendant has acted unlawfully.” 7 Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While courts do not require “heightened fact pleading 8 of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.” 9 Twombly, 550 U.S. at 544, 555. United States District Court For the Northern District of California 10 In deciding whether the plaintiff has stated a claim upon which relief may be granted, the Court 11 must assume that the plaintiff’s allegations are true and must draw all reasonable inferences in the 12 plaintiff’s favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the 13 Court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions 14 of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 15 16 DISCUSSION 17 As mentioned above, defendants’ motions challenge four aspects of MetroPCS’s FAC: (1) its 18 claims under the Illinois Antitrust Act; (2) its allegations of a conspiracy to fix the prices of small LCD 19 panels; (3) its use of “group pleading”; and (4) its allegations that Sanyo participated in the price-fixing 20 conspiracy. 21 22 I. Illinois Antitrust Act 23 Defendants assert that MetroPCS’s claim under the Illinois Antitrust Act is barred by that act’s 24 four-year statute of limitations. See 740 Ill. Comp. Stat. 10/7. They argue that the statute of limitations 25 began running in June 2006, which, according to defendants, is the date of the last overt act alleged in 26 the FAC. See FAC at ¶191; see also People v. Peebles, 457 N.E.2d 1318, 1322 (Ill. App. 1983) (“Case 27 28 3 1 law provides that every overt act in furtherance of a conspiratorial agreement is a renewal of the 2 conspiracy, and the statute of limitations begins to run from the date of the commission of the last overt 3 act.”). Thus, defendants argue that MetroPCS was required to have filed its complaint before June 2010. 4 MetroPCS, however, did not file this action until December 17, 2010. The Court agrees with MetroPCS that the Illinois Antitrust Act’s statute of limitations did not 6 begin to run until the DOJ disclosed its investigation on December 11, 2006. To begin with, MetroPCS 7 alleges that it was unaware of its injury before that date. See, e.g., FAC at ¶¶245-62. As this Court has 8 already held, such allegations are sufficient, at the pleading stage, to survive a challenge based upon the 9 statute of limitations. See In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F. Supp. 2d 1109, 1132 10 United States District Court For the Northern District of California 5 (N.D. Cal. 2008) (“Defendants may renew their arguments regarding notice and due diligence in a 11 motion for summary judgment upon a fuller factual record, as these are fact-intensive inquiries 12 inappropriate for resolution at this preliminary stage of the litigation.”); see also Knox College v. 13 Celotex Corp., 430 N.E.2d 976, 980 (Ill. 1981) (“[T]he statute [of limitations] starts to run when a 14 person knows or reasonably should know of his injury and also knows or reasonably should know that 15 it was wrongfully caused.”). 16 In addition, the Court disagrees with defendants’ contention that the FAC does not allege any 17 overt acts in furtherance of the conspiracy that occurred after June 2006. To the contrary, the FAC 18 alleges an ongoing conspiracy that continued into December 2006. See, e.g., FAC at ¶¶1 (defining 19 conspiratorial period), 111 (alleging that “coordinated one-on-one meetings . . . took place until about 20 November or December 2006”), 143 (noting that Chunghwa admitted to participating in a “conspiracy 21 with other major LCD panel producers” through December 1, 2006); 145 (same for Sharp); 151 (same 22 for Chi Mei). These amount to allegations that defendants’ overt acts continued until December 2006, 23 and are sufficient to prevent the statute of limitations from beginning to run until that time. Cf. People 24 ex rel. Hartigan v. Moore, 493 N.E.2d 85 (Ill. App. 1986) (holding that “the receipt of money” in 25 connection with price-fixed contract constituted overt act in furtherance of conspiracy). 26 Even if the statute of limitations began to run on December 11, 2006, however, the Illinois 27 28 4 1 Antitrust Act’s four-year statute of limitations expired before MetroPCS filed its complaint on 2 December 17, 2010. Thus, absent further tolling, MetroPCS’s Illinois antitrust claims are untimely.11 3 MetroPCS relies on section 10/7(2) of the Illinois Antitrust Act, which provides additional 4 tolling whenever the Illinois Attorney General files suit under the Act: 5 7 [W]henever any action is brought by the Attorney General for a violation of this Act, the running of the [four-year] statute of limitations, with respect to every private right of action for damages under the subsection which is based in whole or in part on any matter complained of in the action by the Attorney General, shall be suspended during the pendency thereof, and for one year thereafter. 8 740 ILCS 10/7(2). MetroPCS claims that the Illinois Attorney General filed suit against defendants on 9 August 10, 2010, and that its claims were therefore tolled starting on that date.12 6 United States District Court For the Northern District of California 10 The Court agrees with MetroPCS that section 10/7(2) tolled the statute of limitations and that 11 its complaint was therefore timely. Accordingly, it DENIES defendant’s motion to dismiss MetroPCS’s 12 claims under the Illinois Antitrust Act. 13 14 II. Small Panel Conspiracy 15 MetroPCS’s FAC alleges that, “[a]s part of the larger Conspiracy to raise the price of LCD 16 panels, Defendants engaged in bilateral communications specifically regarding prices for small LCD 17 panels of various types used in mobile wireless handsets and other mobile device applications, including 18 TFT and non-TFT technology.” FAC at ¶194. Defendants argue that MetroPCS’s allegations are 19 insufficient to support the existence of a conspiracy to fix prices of small LCD panels. 20 This Court recently considered a similar argument in a related case brought by Costco Wholesale 21 22 23 24 11 Although the FAC alleges that the direct- and indirect-purchaser class action suits tolled the statute of limitations for MetroPCS’s lawsuit, MetroPCS has not raised that argument before this Court. In fact, the class action suits are limited to TFT-LCD panels and do not include the smaller panels at issue in this case. 12 27 MetroPCS relies on the State of Illinois’ complaint, filed in Cook County, Illinois, to establish that section 10/7(2) tolls its claims. See Opp’n at 6-7. MetroPCS has not, however, provided this Court with a copy of that complaint. Nevertheless, the Court is familiar with the general subject matter of the Illinois action due to the Illinois Attorney General’s intervention in this MDL. Because defendants do not claim that MetroPCS has misrepresented the content of that action, the Court accepts MetroPCS’s representations as true for purposes of this motion. 28 5 25 26 1 Corporation. See Order Granting in Part Defendants’ Joint Motion to Dismiss Complaint, Master 2 Docket No. 3396, at 9-10 (August 29, 2011). The Court concluded that, although a close question, 3 Costco had sufficiently alleged that the conspiracy included small, non-TFT LCD panels. As in the Costco matter, the Court determines that MetroPCS’s allegations that the price-fixing 5 conspiracy included small LCD panels are sufficient to survive defendants’ motion to dismiss. 6 MetroPCS alleges that defendants’ sales and marketing employees engaged in bilateral communications 7 to fix prices of small panels. FAC at ¶194. Its FAC includes specific allegations that Samsung, Sharp, 8 Epson, AUO, LG, Toshiba, and Hitachi discussed pricing of small LCD panels. FAC at ¶¶197-213. 9 Further, the FAC alleges that, as part of their plea agreements with the United States, Sharp and Epson 10 United States District Court For the Northern District of California 4 admitted that they had conspired to fix the price of LCD panels sold to Motorola for use in Razr mobile 11 phones and to Apple for use in iPod portable music players. FAC at ¶¶145, 149. 12 The Court finds that plaintiff’s FAC has adequately alleged that the price-fixing conspiracy 13 included both large and small LCD panels. Accordingly, it DENIES defendants’ motion with respect 14 to plaintiff’s allegations of a small-panel conspiracy. 15 16 III. Adequacy of Group Pleading 17 Defendants also assert that MetroPCS’s FAC fails to assert “a plausible set of factual allegations 18 to show that [it] is entitled to relief against each named Defendant,” as required by Iqbal and Twombly. 19 Motion at 6. As defendants recognize in their reply brief, see Reply at 10, this Court’s recent orders in 20 other “direct-action” cases in this MDL have addressed the argument defendants raise. See Order 21 Granting in Part Defendants’ Joint Motion to Dismiss Kodak’s First Amended Complaint, Master 22 Docket No. 3346 (August 23, 2011) (Eastman Kodak direct-action case); Order Granting in Part 23 Defendants’ Motion to Dismiss, Master Docket No. 3359 (August 24, 2011) (Best Buy); Order Granting 24 in Part Defendants’ Joint Motion to Dismiss Target’s First Amended Complaint, Master Docket No. 25 3362 (August 24, 2011) (Target); Order Granting in Part Defendants’ Joint Motion to Dismiss 26 Complaint, Master Docket No. 3396 (August 29, 2011) (Costco); Order Denying Defendants’ Joint 27 28 6 1 Motion to Dismiss the Second Amended Complaint, Master Docket No. 3590 (September 15, 2011) 2 (Circuit City); Order Denying Defendants’ Joint Motion to Dismiss, Master Docket No. 3614 3 (September 19, 2011) (SB Liquidation Trust). The Court has found that the direct-action plaintiffs’ 4 complaints – all of which are highly similar – contain adequate factual allegations to state clams against 5 the defendants, despite their use of “group pleading.” As in those cases, MetroPCS’s FAC includes ample detail about defendants’ involvement in the 7 conspiracy. The FAC contains a detailed description of the meetings that were held in furtherance of 8 the price-fixing conspiracy, FAC at ¶¶104-14, as well as a description of actions taken in furtherance 9 of the conspiracy by defendants and their American subsidiaries. See FAC at ¶¶115-35, 228-37; see also 10 United States District Court For the Northern District of California 6 FAC at ¶¶139-54 (describing guilty pleas of many defendants). Further, it alleges that the conspiracy 11 was implemented at the highest level of the corporation and that “employees or agents of entities within 12 the corporate family engaged in conspiratorial meetings on behalf of every company in that family.” 13 FAC at ¶132; see also In re TFT LCD (Flat Panel) Antitrust Litig., 599 F. Supp. 2d 1179, 1184-85 14 (N.D. Cal. 2009). These allegations are more than sufficient to inform defendants of their link to 15 plaintiff’s case. More detailed “defendant by defendant” pleading is not required. 16 The Court finds that MetroPCS’s FAC includes a plausible set of factual allegations that is 17 sufficient to give each defendant notice of the charges against it. Accordingly, it DENIES defendants’ 18 motion to dismiss based on MetroPCS’s use of group pleading. 19 20 IV. Sanyo 21 Finally, Sanyo argues that the FAC contains inadequate allegations of its participation in the 22 conspiracy. The FAC specifically mentions Sanyo in only four paragraphs. Paragraphs 39 and 40 23 provide background information, alleging that Sanyo is a Japanese company that “manufactured, sold, 24 and distributed LCD Products to customers throughout the United States and elsewhere.” FAC at ¶39. 25 The remaining paragraphs allege that: 26 27 28 120. Defendant Mitsui participated in multiple bilateral meetings during the Relevant Period, and agreed on prices and supply levels for LCD Products. In addition, 7 1 Mitsui attended at least one bilateral meeting with Defendant Chunghwa during 2001, and multiple bilateral meetings with co-conspirator Samsung in the U.S. at which similar subjects were discussed. At that and other meetings, Mitsui acted as an agent of Sanyo Consumer and reached agreements with other competitors about prices for LCD Products sold in the United States and elsewhere. 2 3 4 121. 5 Defendant Sanyo Consumer participated in at least one bilateral meeting through an agent during the Relevant Period, and agreed on prices and supply levels for LCD Products. 6 FAC at ¶¶120-21.13 7 Considering the FAC as a whole, the Court finds these allegations sufficient to state a claim 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 against Sanyo. As discussed above, the FAC contains plausible allegations of a price-fixing conspiracy. It then specifies how Sanyo joined the conspiracy – through its agent, Mitsui, it agreed to fix prices of LCD panels. Given the strength of plaintiffs’ allegations that a price-fixing conspiracy existed, the Court does not believe a more detailed description of Sanyo’s involvement is required. Nor does the Court believe that MetroPCS must provide any further basis for its allegation that Mitsui acted as Sanyo’s agent. Although Sanyo claims that MetroPCS’s allegations against it are similar to those this Court previously found inadequate, the Court disagrees. The Court previously dismissed a claim against Philips Electronics North America Corporation (“PENAC”) based on the fact that the complaint contained no allegations of how PENAC joined the conspiracy. See In re TFT-LCD (Flat Panel) Antitrust Litig., 2010 WL 2629728 (N.D. Cal., June 29, 2010). The only paragraph in that complaint to mention PENAC alleged: During the Conspiracy Period, Nokia purchased LCDs from Royal Philips Electronics N.V. and [PENAC] themselves or via their subsidiaries. [PENAC] also manufactured, sold, and/or distributed LCDs to other purchasers through the United States and elsewhere during the Conspiracy Period. [PENAC] participated in the conspiracy through the actions of its officers, employees and representatives acting with actual or apparent authority. Id. at *6. 25 26 13 27 In addition, the FAC alleges that Sanyo’s parent company, named as a co-conspirator but not a defendant, “participated in meetings or discussions. . . with at least one other Defendant or coconspirator, which included discussions about prices for LCD Products.” FAC at ¶129. 28 8 1 Here, in contrast, MetroPCS’s complaint alleges “how” Sanyo joined the conspiracy – by 2 participating in a meeting through its agent, Mitsui. In light of strength of MetroPCS’s overall 3 allegations, a more detailed description of Sanyo’s role is not required. 4 5 CONCLUSION 6 For the foregoing reasons and for good cause shown, the Court hereby DENIES defendant’s 7 motion for judgment on the pleadings and for dismissal. Docket Nos. 41, 43, 72 in 11-0829; Docket 8 Nos. 3225, 3231, 3976 in 07-1827. 9 United States District Court For the Northern District of California 10 IT IS SO ORDERED. 11 12 Dated: October 26, 2011 SUSAN ILLSTON United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9
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