Solyndra Residual Trust ex rel. Neilson v. Suntech Power Holdings Co.
62 F. Supp. 3d 1027
N.D. Cal.2014Background
- Solyndra Residual Trust (assignee of bankrupt Solyndra LLC) alleges China‑based manufacturers (Suntech, Trina, Yingli and their U.S. subsidiaries) conspired to sell solar panels in the U.S. below cost to eliminate U.S. competitors and capture market share.
- Solyndra produced novel tubular rooftop photovoltaic panels and lost substantial contracts and revenue after steep, coordinated price declines in the industry between 2007–2011.
- Plaintiff alleges defendants coordinated via the China New Energy trade association and that price drops followed annual forums; defendants’ U.S. market share rose sharply (allegedly to ~65%).
- Claims in the FAC: Sherman Act § 1 (price‑fixing/dumping), California Cartwright Act, California Unfair Practices Act (predatory pricing/loss leaders), and tortious interference with contracts and prospective economic advantage.
- Defendants moved to dismiss arguing failure to plausibly plead a conspiracy, lack of antitrust injury/standing, inadequate market definitions, and insufficiency of predatory‑pricing allegations; the court denied the motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a conspiracy under §1 | Alleged coordinated meetings at trade forums, parallel dramatic price cuts, trade‑group control — plausible agreement | Alleged facts show only parallel conduct and opportunity to collude, not an express agreement | FAC sufficiently alleges facts to raise a plausible inference of concerted agreement; dismissal denied |
| Predatory pricing requirement (recoupment / below‑cost) | §1 claim need not plead recoupment; alleged below‑cost sales and market concentration suffice | Brooke Group test (recoupment & pricing below appropriate cost) should apply to §1; failure to plead marginal cost/recoupment warrants dismissal | Court: Brooke Group/recoupment is a §2 standard and need not be pleaded for §1; allegations of below‑cost pricing and market control survive pleading stage |
| Antitrust standing / antitrust injury | Solyndra lost contracts/revenues and consumers lost technological choice due to defendants’ conduct — injury of the type antitrust laws protect | Solyndra’s inability to meet prices is not an antitrust injury absent viable predatory‑pricing claim | Court: Pleadings allege unlawful conduct causing plaintiff harm and loss of market alternatives — antitrust injury adequately pleaded |
| Relevant market (product & geographic) | Product market: commercial/industrial rooftop PV panels (distinct submarket); Geographic market: United States (defendants export majority to U.S.) | Market definitions are too narrow; Solyndra sold globally and buyers might source from Europe | Court: At pleading stage definitions are not facially unsustainable; U.S. geographic market and rooftop product submarket adequately alleged; also noted per se price‑fixing allegation may obviate market‑power pleading |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading conspiracy)
- Ashcroft v. Iqbal, 556 U.S. 662 (conclusory allegations insufficient)
- Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (predatory‑pricing test requiring below‑cost pricing and dangerous probability of recoupment for §2 claims)
- American Needle, Inc. v. National Football League, 560 U.S. 183 (distinguishing §1 concerted action from §2 monopolization analysis)
- United States v. General Motors Corp., 384 U.S. 127 (express agreement not required for a Sherman Act conspiracy)
- Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979 (per se horizontal price‑fixing may obviate relevant‑market showing)
- Newcal Indus., Inc. v. Ikon Office Solution, 513 F.3d 1038 (relevant market pleading standard)
- Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (antitrust injury/standing principles)