Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co.
20 F.4th 466
9th Cir.2021Background:
- Orion (U.S. telescope retailer/brand) sued Sunny (Chinese manufacturer) alleging Sunny conspired with Synta and related entities to fix prices, allocate customers/markets, and facilitate Sunny’s acquisition of Meade to eliminate competition.
- Key alleged conduct: coordinated financing/prepayments for Sunny’s Meade bid, parallel pricing/credit terms (including cutting off Orion’s credit after Orion bid for Hayneedle assets), and agreements to avoid competing on certain products/customers.
- Case proceeded to a six-week jury trial: jury found Sunny liable on Sherman Act §§ 1 and 2, Clayton Act § 7, and California claims, awarding $16.8M (trebled to $50.4M); district court also imposed injunctive relief; Sunny appealed.
- District court admitted Orion’s experts (Drs. Sasian and Zona), excluded Sunny’s rebuttal Jeffrey Redman, and limited Dr. Celeste Saravia’s testimony at trial; Sunny later sought to rely on a post-trial Saravia declaration which the district court excluded under Rules 26/37.
- Ninth Circuit affirmed most rulings and the jury verdicts (Section 1, Section 2, Section 7, and injunctions), vacated only the exclusion of Dr. Saravia’s post-trial declaration under Rules 26/37 and remanded for further proceedings; it affirmed summary judgment for Sunny on Orion’s cross-appeal (Orion failed to prove Sunny caused Orion’s failure to acquire Meade).
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of experts (Dr. Sasian, Dr. Zona, Jeffrey Redman) | Sasian and Zona are qualified and their methodologies tied to case facts; their opinions show horizontal competition and quantify damages | Sunny: Sasian/Zona untethered, "junk" methodology; Redman was a qualified rebuttal expert | Court properly admitted Sasian and Zona; properly excluded Redman for lack of relevant expertise and understanding of methods |
| Mid-trial curative instruction limiting Dr. Saravia | Saravia (rebuttal) improperly offered affirmative alternative damages estimates | Sunny: limiting instruction was an abuse; jury should consider her lower damages figures | Ninth Circuit held the curative instruction was within discretion; criticism of Zona’s methods remained admissible but Saravia could not offer her own damages number |
| Section 1 claims (conspiracy to acquire Meade; price/credit fixing; market allocation) | Evidence of emails, financing, prepayments, parallel pricing, and coordinated credit cuts shows per se horizontal price-fixing and market allocation and an agreement to secure Meade | Sunny: acted independently; insufficient evidence to show conspiratorial agreement; standing/causation arguments | Substantial evidence supported jury’s per se Section 1 findings (acquisition scheme, price/credit fixing, market allocation); verdict affirmed |
| Section 2 claims (attempted monopolization; conspiracy to monopolize; market definition) | Sunny intended to monopolize (emails, conduct); market was global telescope+accessory manufacturing with high barriers; Sunny was dangerously close to monopoly | Sunny: improper joint-monopoly theory; inadequate market definition; insufficient proof of specific intent or dangerous probability | Court rejected Sunny’s challenges: expert market definition adequate; specific intent and dangerous proximity supported by evidence and market-share testimony; Section 2 verdicts affirmed |
| Clayton Act § 7, damages, injunctions, and post-2016 damages | Merger (Meade acquisition) likely substantially lessened competition (HHI increase); resulting overcharges and structural harm yielded damages and justified injunctive relief; post-2016 injuries flowed from changed market structure | Sunny: damages not proven as attributable to merger; injunction overbroad; conspiracy ended in 2016 so no post-2016 damages | Jury’s Section 7 finding and damages sustained (not grossly excessive or speculative); injunction within discretion to remedy and prevent recurrence; post-2016 damages permissible as residual effects or because conspiracy continued |
| Exclusion of Saravia post-trial declaration (Rule 26/37) & cross-appeal causation (Orion’s failure to acquire Meade) | Sunny: district court abused discretion by excluding Saravia’s declaration supporting set-off valuation; Orion: Sunny prevented Orion from acquiring Meade | Orion: Orion had chosen not to rebid when opportunity arose; Sunny argued Orion would not have acquired Meade regardless | Ninth Circuit vacated district court’s exclusion of Saravia declaration (abuse of discretion under Rules 26/37) and remanded to consider admissibility under Rule 702; affirmed summary judgment for Sunny on Orion’s failure-to-acquire causation claim |
Key Cases Cited
- Palmer v. BRG of Ga., Inc., 498 U.S. 46 (1990) (horizontal market allocation and price-fixing are per se unlawful)
- Knevelbaard Diaries v. Kraft Foods, Inc., 232 F.3d 979 (9th Cir. 2000) (per se rule for horizontal price-fixing)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (requirement that evidence tend to exclude independent action to infer conspiracy)
- United States v. Hinkson, 585 F.3d 1247 (9th Cir. 2009) (abuse-of-discretion standard for expert admissibility review)
- Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643 (1980) (fixing credit terms is a form of price-fixing and per se illegal)
- Image Tech. Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195 (9th Cir. 1997) (defining monopoly power proof: market share, barriers to entry, and capacity to expand)
- St. Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke's Health Sys., Ltd., 778 F.3d 775 (9th Cir. 2015) (SSNIP test and market definition guidance in merger contexts)
- Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282 (9th Cir. 1984) (standards for reviewing antitrust damages verdicts)