28 F.4th 42
9th Cir.2022Background
- DRAM market dominated by Samsung (~50%), Micron (~25%), and SK Hynix (~25%), collectively ~96% of global market.
- Prior to 2016 the defendants competed to grow supply, causing oversupply and falling prices; Samsung began unilaterally restricting supply in late 2015 and again in Q3 2016.
- Micron and SK Hynix reduced capex and production shortly after Samsung, and from June 2016–Dec 2017 industry supply growth lagged demand, driving DRAM prices and defendants’ revenues up.
- Plaintiffs (indirect purchasers) sued under Section 1 of the Sherman Act and various state antitrust/consumer laws, alleging a conspiracy to restrict DRAM supply and inflate prices (June 1, 2016–Feb 1, 2018 class period).
- The district court dismissed the Sherman Act and related state-law conspiracy claims for failure to plead a plausible agreement; the Ninth Circuit affirmed, holding plaintiffs alleged parallel conduct but not the required "something more."
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint plausibly pleads a Section 1 conspiracy given parallel conduct | Alleged contemporaneous production/capex cuts plus eight "plus factors" (price signaling, capex cuts, perilous supply cuts, public statements, changed conduct, info exchanges, concentration, prior convictions) | Conduct is equally explained by lawful conscious parallelism and independent, profit‑motivated decisions | Dismissal affirmed; allegations do not plausibly suggest an agreement rather than independent action |
| Whether contemporaneous capex reductions and production cuts are a plus factor supporting conspiracy | Cuts were simultaneous, unprecedented, and against self‑interest absent agreement | Cuts are consistent with a "follow the leader" reaction to Samsung and rational profitability decisions | Not sufficient; plausibly explained by conscious parallelism |
| Whether public statements, price signaling, and trade‑association/research‑firm contacts supply evidence of coordination | Public comments and leaked signals show defendants encouraged and learned of mutual restraint; meetings/reports provided channels for information exchange | Such statements and meetings are routine in oligopolies and do not show actual agreement | Not sufficient; lawful public statements and meetings plausibly explain the conduct |
| Whether market concentration and prior criminal price‑fixing convictions make a conspiracy plausible | High concentration and defendants' prior price‑fixing convictions (early 2000s) support an inference of repeated collusion | Prior convictions are remote and market structure also explains parallel behavior | Prior convictions provide some circumstantial support but, in totality, do not move the pleadings from conceivable to plausible |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (parallel conduct requires "something more" to plausibly allege conspiracy)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (complaint must plead sufficient factual matter to state a plausible claim)
- Kendall v. Visa U.S.A., Inc., 518 F.3d 1042 (9th Cir. 2008) (elements of a Section 1 claim)
- In re Musical Instrument & Equip. Antitrust Litig., 798 F.3d 1186 (9th Cir. 2015) (discussing plus factors and conscious parallelism)
- Starr v. Baca, 652 F.3d 1202 (9th Cir. 2011) (plausibility; when competing plausible inferences exist)
- In re Citric Acid Litig., 191 F.3d 1090 (9th Cir. 1999) (trade‑association meetings often legitimate; courts cautious inferring conspiracy)
- Cont'l Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962) (evaluate conspiracy allegations holistically)
- Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (2005) (limitations on discovery absent plausible pleading)