In Re: Optical Disk Drive Products Antitrust Litigation
3:10-md-02143
| N.D. Cal. | Dec 18, 2017Background
- Indirect Purchaser Plaintiffs (IPPs) sued multiple ODD manufacturers alleging a multi-year, industry-wide conspiracy (2003–2008) to fix/stabilize prices of optical disk drives (ODDs) incorporated in computers and sold downstream. Class certified under California law for purchasers from 23 states + D.C.
- Defendants moved for summary judgment on multiple grounds: insufficiency of conspiracy evidence, lack of injury/damages (pass-through), lack of causation, FTAIA, and for BenQ, withdrawal/statute-of-limitations defenses. Discovery and expert reports (notably Dr. Kenneth Flamm for IPPs) were completed.
- Court found sufficient circumstantial evidence to create a triable issue that defendants conspired to target Dell and HP (emails, meeting notes, frequent competitor communications, market concentration). But evidence of an industry-wide conspiracy beyond Dell/HP was weak.
- The decisive merits issue was pass-through/impact: IPPs relied on Dr. Flamm’s model asserting 100% pass-through of ODD overcharges to end purchasers; the court held the expert’s theory lacked supporting real-world record evidence that pass-through actually occurred.
- BenQ’s withdrawal argument (sale/exit from industry) and statute-of-limitations defense failed because the record raised factual disputes about whether BenQ fully severed ties and ceased participating.
- Holding: Summary judgment granted for all defendants on IPPs’ damages/claims because IPPs failed to show pass-through (causation, injury, damages); conspiracy evidence insufficiently broad to save claims beyond Dell/HP and insufficient to avoid dismissal without pass-through proof.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a conspiracy under §1 / Cartwright Act | Documents, emails, and communications show an overarching, multi-year price-stabilizing conspiracy across industry | Only isolated agreements/mini-conspiracies (pled bids); information exchanges consistent with lawful competition | Genuine issue of fact that a conspiracy existed targeting Dell and HP; insufficient evidence for an industry-wide conspiracy beyond that scope |
| Sufficiency of evidence (direct vs. circumstantial) | Circumstantial evidence (memos, emails, frequent contacts, market concentration) supports inference of agreement | Evidence are inferences/"shop talk" and do not exclude independent action | Circumstantial evidence sufficient to survive summary judgment as to Dell and HP-focused conspiracy, but not dispositive for broader industry claim |
| Pass-through / causation / injury to indirect purchasers | Expert (Flamm) demonstrates 100% pass-through from ODD overcharge to end purchasers; class-wide impact inferred | OEMs/retailers often did not or could not pass through ODD cost changes; Flamm’s model lacks real-world documentary support | IPPs failed to produce record evidence that pass-through actually occurred; expert opinion insufficient to create genuine dispute — summary judgment for defendants on injury/damages/causation |
| Withdrawal / statute of limitations (BenQ) | BenQ did not fully sever ties and continued activity; thus not entitled to withdrawal or limitations defense | BenQ sold ODD assets/stock and ceased manufacturing/sales, warranting partial judgment and triggering limitations | Factual disputes exist about whether BenQ fully exited; withdrawal not established as matter of law and tolling/limitations defense denied |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard requires no genuine dispute of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (moving party’s and nonmoving party’s burdens on summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (circumstantial evidence must exclude plausible independent action to show conspiracy)
- Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (expert opinion must be supported by sufficient facts to be admissible for verdict)
- Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (accrual rule for antitrust causes of action)
- United States v. Container Corp. of America, 393 U.S. 333 (reciprocal exchange of price information can support a price-fixing conspiracy)
- In re Citric Acid Litig., 191 F.3d 1090 (standards for proving conspiracy with circumstantial evidence)
- United States v. U.S. Gypsum Co., 438 U.S. 422 (withdrawal requires affirmative acts reasonably calculated to reach co-conspirators)
- Morton’s Market, Inc. v. Gustafson’s Dairy, Inc., 198 F.3d 823 (exit from industry can establish withdrawal for antitrust liability)