Jan Harrison, et al v. E.I DuPont De Nemours and Company et al, No. 5:2013cv01180 - Document 180 (N.D. Cal. 2016)

Court Description: ORDER DENYING 167 RULE 12(b)(1) MOTION TO DISMISS; GRANTING IN PART AND DENYING IN PART 167 RULE 12(b)(6) MOTION TO DISMISS; AND DIRECTING DEFENDANTS TO ANSWER THIRD AMENDED CLASS ACTION COMPLAINT. Signed by Judge Beth Labson Freeman on 6/13/2016.(blflc1S, COURT STAFF) (Filed on 6/13/2016)
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1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA 4 SAN JOSE DIVISION 5 JAN HARRISON, et al., 6 Case No. 13-cv-01180-BLF Plaintiffs, 7 v. 8 E. I. DUPONT DE NEMOURS AND COMPANY, et al., 9 Defendants. 10 [Re: ECF 167] 11 United States District Court Northern District of California ORDER DENYING RULE 12(b)(1) MOTION TO DISMISS; GRANTING IN PART AND DENYING IN PART RULE 12(b)(6) MOTION TO DISMISS; AND DIRECTING DEFENDANTS TO ANSWER THIRD AMENDED CLASS ACTION COMPLAINT 12 In this indirect purchaser class action, Plaintiffs allege that Defendants conspired to and 13 14 did fix the price of titanium dioxide sold in the United States in violation of federal and state 15 antitrust laws, state consumer protection laws, and state common laws. Defendants move to 16 dismiss Plaintiffs’ Third Amended Class Action Complaint (“TAC”) under Federal Rules of Civil 17 Procedure 12(b)(1) and 12(b)(6) for lack of Article III standing and failure to state a claim, 18 respectively. For the reasons discussed below, Defendants’ Rule 12(b)(1) motion is DENIED; their Rule 19 20 12(b)(6) motion is GRANTED IN PART without leave to amend and DENIED IN PART; and 21 Defendants are directed to answer the TAC. I. 22 BACKGROUND The facts giving rise to this action have been set forth at length in prior orders and need not 23 24 be repeated here except as relevant to the pending motions. Plaintiffs are nineteen individuals, 25 residing in nineteen different states,1 who purchased “Architectural Paint” for personal use. TAC 26 ¶¶ 16-34, ECF 164. Architectural Paint is one of many categories of products containing titanium 27 28 1 For ease of reference, the District of Columbia is referred to as a “state” herein. dioxide, “the world’s most widely used pigment for whiteness, brightness, and masking of colors.” 2 TAC ¶ 57. “There are no viable white pigment competitive substitutes for Titanium Dioxide in 3 consumer products.” TAC ¶ 59. Plaintiffs allege that Defendants E. I. DuPont De Nemours and 4 Company, Huntsman International, L.L.C., Kronos Worldwide, Inc., and Millennium Inorganic 5 Chemicals, Inc., along with their non-party co-conspirators, are the dominant suppliers of titanium 6 dioxide in the United States. TAC ¶ 2. According to Plaintiffs, Defendants conspired to and did 7 “manipulate, fix, raise, maintain, and stabilize prices at which Titanium Dioxide is sold in the 8 United States.” TAC ¶ 3. Plaintiffs allege that the artificially inflated prices of titanium dioxide 9 were passed through to end-user consumers of products containing titanium dioxide, with the 10 result that Plaintiffs paid higher prices for Architectural Paint than they would have paid in a 11 United States District Court Northern District of California 1 competitive marketplace absent Defendants’ price-fixing. TAC ¶ 5. Plaintiffs bring this lawsuit individually and on behalf of consumers who purchased 12 13 Architectural Paint in the United States during the alleged Class Period from January 1, 2002 14 “through such time as the anticompetitive effects of the Defendants’ conduct ceased.” The TAC 15 asserts four claims: (1) violation of state antitrust statutes; (2) violation of state consumer 16 protection statutes; (3) unjust enrichment; and (4) injunctive and equitable relief under § 1 of the 17 Sherman Act, 15 U.S.C. § 1. 18 II. RULE 12(b)(1) MOTION 19 A. Legal Standard 20 A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) raises a 21 challenge to the Court’s subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). “Article III . . . 22 gives the federal courts jurisdiction over only cases and controversies.” Public Lands for the 23 People, Inc. v. United States Dep’t of Agric., 697 F.3d 1192, 1195 (9th Cir. 2012) (internal 24 quotation marks and citation omitted). “The oft-cited Lujan v. Defenders of Wildlife case states 25 the three requirements for Article III standing: (1) an injury in fact that (2) is fairly traceable to 26 the challenged conduct and (3) has some likelihood of redressability.” Id. at 1195-96 (citing Lujan 27 v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). If these requirements are not satisfied, the 28 action should be dismissed for lack of subject matter jurisdiction. See Steel Co. v. Citizens for a 2 1 2 Better Env’t, 523 U.S. 83, 109-10 (1998). “For purposes of ruling on a motion to dismiss for want of standing, both the trial and 3 reviewing courts must accept as true all material allegations of the complaint and must construe 4 the complaint in favor of the complaining party.” Maya v. Centex Corp., 658 F.3d 1060, 1068 5 (9th Cir. 2011) (internal quotation marks and citation omitted). The Court also may consider 6 affidavits containing further particularized allegations of fact supportive of Article III standing. 7 Id. at 1067. “At the pleading stage, general factual allegations of injury resulting from the 8 defendant’s conduct may suffice, for on a motion to dismiss we presume that general allegations 9 embrace those specific facts that are necessary to support the claim.” Id. at 1068 (internal quotation marks, citation, and brackets omitted). “Twombly and Iqbal are ill-suited to application 11 United States District Court Northern District of California 10 in the constitutional standing context because in determining whether plaintiff states a claim under 12 12(b)(6), the court necessarily assesses the merits of plaintiff’s case.” Id. (citing Ashcroft v. Iqbal, 13 556 U.S. 662 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). “But the threshold 14 question of whether plaintiff has standing (and the court has jurisdiction) is distinct from the 15 merits of his claim.” Id. “This is not to say that plaintiff may rely on a bare legal conclusion to 16 assert injury-in-fact, or engage in an ingenious academic exercise in the conceivable to explain 17 how defendants’ actions caused his injury.” Id. (internal quotation marks and citation omitted). 18 But “the jurisdictional question of standing precedes, and does not require, analysis of the merits.” 19 Id. (internal quotation marks, citation, and brackets omitted). 20 B. Discussion 21 Defendants seek dismissal of the TAC based upon Plaintiffs’ asserted failure to satisfy the 22 second of the Lujan factors, that Plaintiff’s injury is “fairly traceable to the challenged conduct” of 23 Defendants. Public Lands, 697 F.3d at 1195. The Court granted Defendants’ prior motion to 24 dismiss the Second Amended Complaint (“SAC”) for lack of Article III standing on this precise 25 ground. See Order dated August 11, 2015 (“Prior Order”), ECF 158. In the SAC, Plaintiffs 26 asserted that Defendants fixed the price of titanium dioxide sold in the United States at artificially 27 high levels; as a result, manufacturers of products in the “Architectural Coatings” market paid 28 unfairly high prices for titanium dioxide; and those overcharges were passed through each level of 3 1 distribution to a Merchant Class and ultimately to a Consumer Class. While it found adequate 2 Plaintiffs’ allegations of conspiracy and price-fixing, the Court found inadequate Plaintiffs’ 3 conclusory assertion that the overcharges to manufacturers of Architectural Coatings were passed 4 through to Plaintiffs and the classes they sought to represent. See Prior Order at 23. The Court 5 held that assertion to be “without any factual support given the breadth of the defined market and 6 the variation in the amount of titanium dioxide found in the expansive category of Architectural 7 Coating products.” Id. Noting that Plaintiffs had provided specifics regarding only a single paint 8 product, the Court observed that, taken literally, Plaintiffs’ definition of Architectural Coatings 9 would encompass products containing only trace amounts of titanium dioxide. Id. Thus while observing that Plaintiffs might be able to establish Article III standing with respect to a more 11 United States District Court Northern District of California 10 limited market – for example, the market for architectural paint – the Court concluded that 12 Plaintiffs had failed to do so with respect to the market for Architectural Coatings. Id. at 25. 13 The Court also expressed concerns regarding Plaintiffs’ intent to represent classes at 14 different levels of the distribution chain, in particular, a Merchant Class and a Consumer Class. 15 Prior Order at 24, ECF 158. While it did not rely upon that potential conflict in concluding that 16 Plaintiffs had failed to allege facts showing Article III standing, the Court did question Plaintiffs’ 17 ability to quantify overcharges paid by the Merchant Class versus overcharges paid by the 18 Consumer Class. Id. The Court expressed “grave reservations about Plaintiffs’ ability to get any 19 class certified in this action, let alone two separate classes that would be adverse to each other.” 20 Id. 21 Plaintiffs have cured those pleading defects in their TAC. Importantly, they have limited 22 the relevant market to “Architectural Paint” as suggested by the Court in its prior order. See TAC 23 at ¶ 1, ECF 164. Moreover, the TAC identifies the specific brand and product name of each paint 24 purchased by each Plaintiff and, in some cases, discloses what percent of the paint constitutes 25 titanium dioxide. TAC ¶¶ 16-34. Plaintiffs also have abandoned their damages claims on behalf 26 of the Merchant Class and now seek to recover overcharges only on behalf of a consumer class of 27 persons who purchased Architectural Paint for personal use and not for resale. See TAC ¶ 47. 28 The narrowing of the market and the elimination of the Merchant Class simplifies Plaintiffs’ task 4 1 of tracing considerably. Plaintiffs also allege the following facts relevant to tracing: titanium dioxide is the 3 costliest component of Architectural Paint, representing fifty percent of the cost of “flat coatings” 4 and thirty-three percent of the cost of “high gloss coatings”; as a result, Architectural Paint 5 manufacturers cannot absorb fluctuations in the cost of titanium dioxide, and an increase in the 6 price of titanium dioxide causes an increase in the price of Architectural Paint; the Architectural 7 Paint market has many characteristics that economic theory indicates will lead to a near one 8 hundred percent pass-through rate of cost increases; and this theory is confirmed by articles and 9 manufacturers’ statements published between 2010 and 2012 stating that recent increases in paint 10 prices were due to increases in the cost of titanium dioxide. TAC ¶¶ 159-162. Plaintiffs include 11 United States District Court Northern District of California 2 in the TAC a graph comparing the price of titanium dioxide and the price of Architectural Paint 12 and Coatings, and for the most part an increase in one is mirrored by an increase in the other. See 13 TAC ¶ 158. 14 The Court concludes that these allegations satisfy the traceability requirement for Article 15 III standing. It finds unpersuasive Defendants’ contentions that the Architectural Paint market 16 actually is no narrower than the Architectural Coatings market previously alleged, and that even if 17 the market has been narrowed somewhat, it is still too broad for tracing to be possible or practical. 18 While Defendants are correct that the definition of Architectural Paint provided in the TAC could 19 be read to include products besides paint, see TAC ¶ 1 n.1, these Plaintiffs have alleged facts 20 showing that they purchased paint containing significant quantities of titanium dioxide. The 21 relevant question is whether the requisite case or controversy has been established between the 22 named plaintiffs and the defendants, not between unidentified putative class members and the 23 defendants. See Lierboe v. State Farm Mut. Auto Ins. Co., 350 F.3d 1018, 1022 (9th Cir. 2003). 24 Thus the fact that unnamed class members theoretically might assert claims based upon products 25 other than paint is not fatal to Plaintiffs’ Article III allegations. 26 Defendants argue that Plaintiffs’ traceability allegations are insufficient because their 27 graph shows that for some time periods, the increase in the price of titanium dioxide was not 28 mirrored by an increase in the price of Architectural Paint and Coatings. Defendants also argue 5 1 that Plaintiffs’ allegations regarding the methods by which they will prove pass-through of the 2 overcharges are too vague to support Article III standing. The Court concludes that these 3 arguments more appropriately should be raised in the context of class certification or summary 4 judgment. Plaintiffs are not required to prove their tracing case at the pleading stage or to satisfy 5 Iqbal and Twombly standards in order to establish Article III standing. See Maya, 658 F.3d at 6 1068. To the contrary, “general factual allegations of injury resulting from the defendant’s 7 conduct may suffice.” Id. The Court concludes that Plaintiffs have alleged that they suffered an 8 injury – payment of inflated prices for Architectural Paint – and have alleged facts giving rise to a 9 reasonable inference that their injury is traceable to Defendants’ alleged price-fixing conspiracy. The Court leaves for another day whether Plaintiffs’ evidence and experts will be sufficient to 11 United States District Court Northern District of California 10 establish the truth of their allegations. Accordingly, Defendants’ Rule 12(b)(1) motion to dismiss for lack of Article III standing 12 13 14 is DENIED. III. RULE 12(b)(6) MOTION 15 A. Legal Standard 16 “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a 17 claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation 18 Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 19 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts 20 as true all well-pled factual allegations and construes them in the light most favorable to the 21 plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the 22 Court need not “accept as true allegations that contradict matters properly subject to judicial 23 notice” or “allegations that are merely conclusory, unwarranted deductions of fact, or 24 unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) 25 (internal quotation marks and citations omitted). While a complaint need not contain detailed 26 factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to 27 relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 28 Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the 6 1 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. 2 B. Discussion 3 Defendants contend that Plaintiffs have failed to allege facts sufficient to state a claim 4 under federal antitrust law or the antitrust laws of Iowa, Nebraska, New Mexico, or New York. 5 Defendants also contend that all of Plaintiffs’ claims pre-dating the applicable limitations periods 6 are time-barred because Plaintiffs have not alleged facts sufficient to show delayed accrual or 7 tolling of the limitations periods. Finally, Defendants contend that Plaintiffs have failed to state a 8 claim for which relief may be granted under New York’s General Business Law § 349. 1. 9 Antitrust Claims Defendants assert that Plaintiffs’ antitrust claims under federal law and the laws of Iowa, 10 United States District Court Northern District of California 11 Nebraska, New Mexico, and New York are subject to dismissal for lack of antitrust standing under 12 Associated General Contractors of California, Inc. v. California State Council of Carpenters 13 (“AGC”), 459 U.S. 519 (1983). AGC sets forth factors that may be used by courts to determine 14 “whether the plaintiff is a proper party to bring a private antitrust action,” that is, whether the 15 plaintiff has antitrust standing. Id. at 535 n.31. “Under AGC, courts consider (1) the nature of 16 plaintiffs’ injuries and whether plaintiffs were participants in the relevant markets; (2) the 17 directness of the alleged injury; (3) the speculative nature of the alleged harm; (4) the risk of 18 duplicative recovery; and (5) the complexity in apportioning damages.” In re: TFT-LCD (Flat 19 Panel) Antitrust Litig., 586 F. Supp. 2d 1109, 1123 (N.D. Cal. 2008) (citing AGC, 459 U.S. at 20 536-39). 21 In its Prior Order addressing the SAC, the Court held that the AGC factors apply to 22 Plaintiffs’ claims under the Sherman Act § 1 and under the antitrust laws of Iowa, Nebraska, New 23 Mexico, and New York.2 Prior Order at 27, 34, ECF 158. The Court further held that the AGC 24 factors were not satisfied as to those claims. Id. at 30, 36. Defendants argue that Plaintiffs have 25 not cured those pleading deficiencies. 26 27 28 2 With respect to Plaintiffs’ Sherman Act § 1 claim, the Court determined that only the first three AGC factors apply, as the fourth and fifth factors address damages, which are not available under § 1. See Prior Order at 27. 7 a. 1 First Factor The first AGC factor examines the nature of the plaintiffs’ injuries and whether the 3 plaintiffs were participants in the relevant market. The Court discussed the pleading requirements 4 for this factor at length in its prior order addressing Plaintiffs’ SAC, concluding that the factor is 5 satisfied if the plaintiffs participated in either the identical market as the price-fixed good or in a 6 market that is “inextricably linked” to that market, for example, a market for products that 7 incorporate the price-fixed good as a significant component. See Prior Order at 27-28, ECF 158. 8 The Court also concluded that the market for a chemical compound may be inextricably linked to 9 the market for goods incorporating that compound. Id. at 28. While it “acknowledge[d] that 10 demonstrating the existence of an inextricably linked market might be easier when tracing a 11 United States District Court Northern District of California 2 distinct, physical component through the chain of distribution, the Court perceive[d] no reason 12 why titanium dioxide could not be traced based upon an ingredient list and formula for each 13 product at issue in the context of a sufficiently narrowly defined market.” Id. at 28-29. The Court 14 determined, however, that the Architectural Coatings market alleged in the SAC was “simply too 15 vast and ill-defined to be considered inextricably linked to the market for titanium dioxide.” Id. at 16 29. 17 Plaintiffs have cured that deficiency in the TAC by narrowing the market to Architectural 18 Paint and adding specific allegations linking that market to the market for titanium dioxide. As 19 discussed above, the TAC alleges facts establishing or giving rise to reasonable inferences that 20 Plaintiffs bought Architectural Paint containing significant amounts of titanium dioxide, TAC ¶¶ 21 16-34; titanium dioxide represents one-third to one-half of the cost of manufacturing Architectural 22 Paint, TAC ¶ 159; and increases in the price of titanium dioxide result in increases in the price of 23 Architectural Paint, TAC ¶¶ 158, 162-164. These allegations are sufficient to satisfy the first AGC 24 factor for pleading purposes. 25 26 b. Second and Third Factors Defendants argue, and this Court previously has noted, that analysis of the second and 27 third AGC factors – the directness of the alleged injury and the speculative nature of the alleged 28 harm –largely overlaps with the Article III analysis. See Defs.’ Mot. at 13, ECF 167; Prior Order 8 1 at 29, ECF 158. When addressing these factors in the context of Defendants’ motion to dismiss 2 the SAC, the Court concluded that “because Plaintiffs’ alleged market of Architectural Coatings is 3 so vast and ill-defined, and because Plaintiffs do not allege what specific products within that 4 market they purchased, Plaintiffs have not alleged facts showing that the Architectural Coatings 5 market plausibly can be considered to be inextricably linked to the titanium dioxide market, or 6 giving rise to a plausible inference that the alleged overcharges caused by Defendants’ 7 anticompetitive conduct were passed down the distribution chains to Plaintiffs.” Prior Order at 35. 8 As discussed above, Plaintiffs now allege a narrower market of Architectural Paint; what specific paint products they purchased; and facts giving rise to a reasonable inference that the 10 titanium dioxide market is inextricably linked with the Architectural Paint market such that an 11 United States District Court Northern District of California 9 increase in the price of the former results in an increase in the price of the latter. See TAC ¶¶ 16- 12 34, 158-164. Those allegations, in combination with Plaintiffs’ allegations regarding Defendants’ 13 alleged price-fixing conspiracy and the pass-through of overcharges for titanium dioxide to 14 consumer end-users, are sufficient to give rise to a reasonable inference that Defendants’ conduct 15 caused Plaintiffs actual harm in the form of higher prices for Architectural Paint. Thus the TAC 16 satisfies the second and third AGC factors for pleading purposes. 17 c. Fourth and Fifth Factors 18 The fourth and fifth AGC factors address risk of duplicative recovery and complexity in 19 apportioning damages, respectively. When analyzing the SAC, the Court determined that these 20 factors weighed against finding antitrust standing based upon “the risk of duplicate recovery and 21 complexity of apportionment between indirect purchasers at different levels in the same 22 distribution chains.” Prior Order at 35, ECF 158. Plaintiffs have addressed that concern in the 23 TAC by eliminating their damages claims on behalf of the Merchant Class and seeking to recover 24 overcharges only on behalf of a consumer class of persons who purchased Architectural Paint for 25 personal use and not for resale. See TAC ¶ 47. 26 Defendants argue that these factors nonetheless weigh against antitrust standing because 27 “[c]alculation of damages in indirect purchaser suits is notoriously unwieldy and speculative given 28 that the alleged overcharges have to be traced through all of the manufacturing, distribution, and 9 1 retail channels.” Defs.’ Mot. at 13, ECF 167. The concerns raised by Defendants are present in 2 every indirect purchaser case. Other courts have found concerns regarding apportioning damages 3 and accounting for duplicative recoveries insufficient to bar indirect purchaser cases when the 4 other AGC factors have been satisfied. See, e.g., In re Graphics Processing Units Antitrust Ltig., 5 540 F. Supp. 2d 1085, 1098 (N.D. Cal. 2007). This Court likewise concludes that, given the 6 sufficiency of Plaintiffs’ allegations regarding the asserted price-fixing conspiracy and the pass- 7 through of overcharges for titanium dioxide down the distribution chains to Plaintiffs, potential 8 difficulties in calculating and apportioning damages do not constitute adequate reasons to bar 9 Plaintiffs’ state law indirect purchaser antitrust claims. d. 10 For the reasons discussed above, Defendants’ motion to dismiss Plaintiffs’ federal and United States District Court Northern District of California 11 12 Conclusion state law antitrust claims for lack of antitrust standing is DENIED. 2. 13 Statute of Limitations Defendants seek dismissal of all claims arising from conduct occurring outside the four- 14 15 year limitations period applicable to Plaintiffs’ federal claim and the three, four, and six year 16 limitations periods applicable to Plaintiffs’ state law claims.3 This action was filed on March 15, 17 2013. See Compl., ECF 1. Plaintiffs seek relief for all persons who purchased Architectural Paint 18 dating back to January 1, 2002. TAC ¶ 7. Thus, Defendants argue, Plaintiffs must allege facts 19 showing delayed accrual or tolling in order to sue based on events pre-dating March 15, 2007 (for 20 claims subject to a six-year limitations period), March 15, 2009 (for claims subject to a four-year 21 limitations period), or March 15, 2010 (for claims subject to a three-year limitations period). 22 Defendants assert that Plaintiffs have failed to meet that burden. At the hearing, the Court clarified that Defendants do not actually seek dismissal of any 23 24 named Plaintiff or any claim based upon statute of limitations – instead, they seek to trim away the 25 earlier years of the asserted Class Period. The TAC alleges that each named Plaintiff purchased 26 27 28 3 The relevant statutes of limitations are set forth in Exhibit A to Defendants’ motion to dismiss. See Defs.’ Mot. Exh. A, ECF 167-1. 10 1 Architectural Paint, but it does not allege the dates of any of those purchases. For all the Court 2 knows, each named Plaintiff purchased products within the applicable limitations period. “[I]n 3 ruling on a motion to dismiss a class action complaint prior to class certification, courts generally 4 consider only the claims of the named plaintiff.” Cheng v. BMW of North America, LLC, No. CV 5 12-09262 GAF (SHx), 2013 WL 3940815, at *4 (C.D. Cal. Jul. 26, 2013); see also Rutherford v. 6 FIA Card Services, N.A., No. CV 11-04433 DDP (MANx), 2012 WL 5830081, at *4 (C.D. Cal. 7 Nov. 16, 2012) (where no class has been certified, court looks only to the allegations of the named 8 plaintiff to determine if statute of limitations bars claim); Barth v. Firestone Tire and Rubber Co., 9 673 F. Supp. 1466, 1476 (N.D. Cal. 1987) (“[C]ourts also generally consider only the claims of a named plaintiff in ruling on a motion to dismiss a class action complaint prior to class 11 United States District Court Northern District of California 10 certification.”). Because it is not clear from the face of the TAC that any of the named Plaintiffs’ 12 claims are time-barred, Defendants’ motion to dismiss on statute of limitations grounds must be 13 denied. 14 Defendants point out that the Court previously dismissed Plaintiffs’ claims on statute of 15 limitations grounds. See Prior Order at 55. At that time, the allegations of the SAC focused on 16 the claims of the class as a whole, failed to allege a sufficiently narrow market, and was devoid of 17 specific allegations regarding the products purchased by the named Plaintiffs. Perhaps for those 18 reasons, both the parties’ briefing and the Court’s Prior Order addressed the statute of limitations 19 issue as it would apply to the claims of the class as a whole rather than to the individual claims of 20 the named Plaintiffs. The Court concluded that Plaintiffs had alleged facts that might be sufficient 21 to plead tolling of the applicable limitations periods based upon fraudulent concealment, but it 22 found “wholly implausible” Plaintiffs’ allegation that they first discovered the facts giving rise to 23 their claims on August 28, 2012. Id. at 54-55. The Court granted Defendants’ motion to dismiss 24 on statute of limitations grounds, and stated expressly that leave to amend was granted so that 25 Plaintiffs could allege a different discovery date. Id. at 55. 26 Plaintiffs instead chose to allege the same August 28, 2012 discovery date in their TAC. 27 However, they also amended their pleading to allege for the first time what specific products each 28 named Plaintiff purchased within a sufficiently narrow market. The Court concludes that under 11 1 the authorities cited above, those allegations must be evaluated to determine whether they disclose 2 on their face that the named Plaintiffs’ claims are time-barred. As discussed above, that answer to 3 that inquiry is no. 4 The Court’s ruling is without prejudice to Defendants’ assertion of a statute of limitations 5 bar at class certification, summary judgment, or other appropriate stage of the litigation. The 6 Court’s view regarding the implausibility of the August 28, 2012 discovery date has not changed. 7 However, the Court concludes that at this stage of the proceedings – a motion to dismiss prior to 8 class certification – and based upon the current pleading, it would be inappropriate to render a 9 final determination regarding the applicability of the relevant limitations periods to the claims of 10 United States District Court Northern District of California 11 12 13 14 the class as a whole. Accordingly, Defendants’ motion to dismiss claims or portions of claims as time-barred is DENIED. 3. New York’s General Business Law § 349 Finally, Defendants request dismissal of Plaintiffs’ claim under New York’s General 15 Business Law § 349, a consumer protection law prohibiting “[d]eceptive acts or practices in the 16 conduct of any business, trade or commerce or in the furnishing of any service in this state.” N.Y. 17 Gen. Bus. Law § 349(a). In its Prior Order addressing the SAC, the Court concluded that 18 Plaintiffs had failed to allege a “deceptive” act or practice as required under the statute. The Court 19 reasoned that under Plaintiffs’ theory of the case, “it is the price-fixing that is alleged to have 20 caused Plaintiffs’ injury – the payment of supracompetitive prices – not the misrepresentations 21 Defendants made to cover their tracks.” Prior Order at 43, ECF 158. Defendants point out that 22 Plaintiffs have not made any substantive amendments to their allegations under § 349 and request 23 dismissal of the § 349 claim on that basis. Plaintiffs do not oppose Defendants’ motion with 24 respect to § 349, stating that they retained the claim in the TAC only to preserve their appellate 25 rights. See Pls.’ Opp. at vi n. 1, ECF 168. 26 27 Accordingly, Defendants’ motion to dismiss Plaintiffs’ claim under New York’s General Business Law § 349 is GRANTED WITHOUT LEAVE TO AMEND. 28 12 1 2 IV. ORDER (1) DENIED; 3 4 Defendants’ Rule 12(b)(1) motion to dismiss for lack of Article III standing is (2) Defendants’ Rule 12(b)(6) motion to dismiss for failure to state a claim is 5 GRANTED WITHOUT LEAVE TO AMEND as to Plaintiffs’ claim under New 6 York’s General Business Law § 349 and otherwise DENIED; and 7 (3) Defendants shall answer the TAC. 8 9 10 United States District Court Northern District of California 11 Dated: June 13, 2016 ______________________________________ BETH LABSON FREEMAN United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13