Dan Oliver v. Sd-3c LLC
751 F.3d 1081
9th Cir.2014Background
- Plaintiffs (purchasers of SD digital memory cards) sued Panasonic, Toshiba, SanDisk, and SD-3C alleging a conspiracy to fix SD card prices and anticompetitive licensing practices related to the SD-3C patent pool.
- Defendants created SD standards and membership/licensing regimes (2003 license and 2006 amended license) that imposed a 6% royalty on non‑SD‑Group manufacturers and included a “fair market price” provision.
- Plaintiffs filed suit March 15, 2011, alleging purchases on or after March 15, 2007; they seek only injunctive relief under Section 16 of the Clayton Act and treble damages under California law.
- The district court dismissed all claims as time‑barred, treating the Section 16 injunctive claim as subject to the Clayton Act’s four‑year limitations period (15 U.S.C. § 15b).
- The Ninth Circuit reversed: it held Section 16 claims are governed by equitable laches (with the four‑year period as a guideline), and concluded Plaintiffs pleaded facts sufficient to show laches does not bar the federal claim; it vacated dismissal of state claims and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of Section 16 injunctive claim | Laches does not bar the claim because Plaintiffs purchased within four years before filing and alleged continuing injury | Section 4B’s four‑year limitations governs and bars the claim | Section 16 claims are governed by laches (no statutory limitations); Plaintiffs pleaded timely claims under laches and continuing‑violation rules |
| Continuing‑violation / overt‑act rule | Each sale at an allegedly supracompetitive price is a new overt act restarting the limitations guideline | Earlier conduct created a permanent harm that should fix the limitations start earlier | Each sale can constitute a new overt act; Plaintiffs alleged purchases within the four‑year guideline, so laches is not established |
| Speculative‑damages accrual exception | Plaintiffs’ injury was speculative before they entered the market; accrual started when damages became ascertainable (their purchases) | Harm was permanent from the initial combination, so limitations should run from the initial conduct | Speculative‑damages exception applies: plaintiffs need not have sued before they entered the market and first suffered ascertainable harm |
| State‑law claims timeliness (Cartwright Act, UCL, others) | State claims are timely if federal claim is timely; district court erred to dismiss them on same limitations ground | State limitations should mirror federal ruling and be dismissed | Federal timeliness ruling vacates dismissal of state claims; district court on remand should apply Aryeh for Cartwright Act accrual questions |
Key Cases Cited
- Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954 (9th Cir. 2010) (standards for appellate review and equitable defenses)
- Int’l Tel. & Tel. Corp. v. Gen. Tel. & Electronics Corp., 518 F.2d 913 (9th Cir. 1975) (Section 16 is equitable and governed by laches)
- Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971) (continuing violation and accrual principles in antitrust cases)
- Klehr v. A.O. Smith Corp., 521 U.S. 179 (1997) (each overt act in a price‑fixing conspiracy can restart the limitations period)
- Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234 (9th Cir. 1987) (new overt‑act and new injury requirements to restart accrual)
- AMF, Inc. v. Gen. Motors Corp. (In re Multidistrict Vehicle Air Pollution), 591 F.2d 68 (9th Cir. 1979) (speculative‑damage accrual exception where harm is uncertain at initial wrongdoing)
- In re Cotton Yarn Antitrust Litig., 505 F.3d 274 (4th Cir. 2007) (sales during a price‑fixing conspiracy can constitute overt acts restarting the limitations period)
- Morton’s Market, Inc. v. Gustafson’s Dairy, Inc., 198 F.3d 823 (11th Cir. 1999) (each sale at a fixed price is a new overt act)
- Aryeh v. Canon Business Solutions, Inc., 55 Cal.4th 1185 (Cal. 2013) (California accrual rules for antitrust and related claims relevant to Cartwright Act timeliness)