In re Optical Disk Drive Antitrust Litigation
303 F.R.D. 311
N.D. Cal.2014Background
- MDL alleging an industry-wide conspiracy among ODD manufacturers to fix or stabilize prices (2004–2009); limited bid‑rigging convictions exist (HLDS plea) and related DOJ investigation.
- Two plaintiff groups moved for class certification: Direct Purchasers (DPPs) and Indirect Purchasers (IPPs).
- Central certification dispute: whether plaintiffs’ experts can reliably show class‑wide antitrust injury (impact) and damages via generalized proof.
- DPPs rely on Dr. Gary French (correlation and regression analyses); IPPs rely on Dr. Kenneth Flamm (hedonic/Fisher indexes, cointegration, regressions).
- Defendants argued the expert methodologies assume rather than prove class‑wide overcharges and offered contrary expert analyses; defendants also moved to strike.
- Court denied both class certification motions (both DPP and IPP) because plaintiffs failed to show a viable, common methodology to prove class‑wide impact and damages; motions to strike were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the alleged conspiracy can be adjudicated on a class‑wide basis | Plaintiffs contend an overarching industry‑wide conspiracy exists and can be proven with common evidence | Defendants contend only discrete bid‑rigging incidents are supported and liability varies by defendant and customer | Existence of a conspiracy is a common question and could be tried class‑wide, but plaintiffs’ expert approach is inconsistent with their broad theory |
| Whether plaintiffs can prove antitrust injury (impact) on a class‑wide basis | Experts (French, Flamm) claim correlations and regressions show an aggregate overcharge applicable to nearly all purchasers | Defendants argue correlations reflect industrywide price trends and that regressions assume, rather than demonstrate, uniform overcharges; alternative models show lack of class‑wide injury | Plaintiffs failed to show a reliable, generalized methodology to prove that all or nearly all class members were injured; predominance not met |
| Whether damages can be calculated by common methodology | Plaintiffs propose applying a class‑wide overcharge percentage to individual purchases (and a fixed % of computer price for embedded ODDs) | Defendants argue damages vary by purchaser, product, and negotiated prices; fixed allocation for ODDs in systems is arbitrary | Damages methodology would work only if class‑wide impact were demonstrated; current methods are inadequate (and system‑embedded ODD method is problematic) |
| Whether expert reports should be struck under Rule 702/Daubert | Plaintiffs argue experts used acceptable econometric methods to show industry impact | Defendants seek exclusion as unreliable and methodologically flawed | Court denied motions to strike; experts admissible but their proofs are insufficient for certification (weaknesses go to weight, not automatic exclusion) |
Key Cases Cited
- Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180 (9th Cir. 2001) (Rule 23 certification burdens and analysis)
- Wal‑Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (U.S. 2011) (Rule 23 requires affirmative, rigorous showing of commonality)
- Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, 133 S. Ct. 1184 (U.S. 2013) (limits on merits inquiry at certification; relevance of merits to Rule 23 analysis)
- Comcast Corp. v. Behrend, 133 S. Ct. 1426 (U.S. 2013) (model for damages must align with theory of liability for Rule 23(b)(3))
- In re Graphics Processing Units Antitrust Litigation, 253 F.R.D. 478 (N.D. Cal. 2008) (rejecting class where representatives’ purchasing profiles differed materially from class)
- In re TFT‑LCD (Flat Panel) Antitrust Litigation, 267 F.R.D. 583 (N.D. Cal. 2010) (antitrust conspiracy questions can be litigated class‑wide when focused on defendant conduct)
- Primiano v. Cook, 598 F.3d 558 (9th Cir. 2010) (‘‘shaky but admissible’’ expert evidence to be tested by cross‑examination, not exclusion)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (U.S. 1999) (trial court gatekeeper role for expert reliability)
- Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (U.S. 1993) (standards for admissibility of expert testimony)
- Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555 (U.S. 1931) (exactness of damages calculations not required at class stage if model consistent with liability)
- Royal Printing Co. v. Kimberly‑Clark Corp., 621 F.2d 323 (9th Cir. 1980) (ownership/control exceptions and apportionment in pass‑through contexts)