Judge Won’t Approve Battery Antitrust Settlements Yet

OAKLAND, Calif. (CN) — A federal judge Tuesday held off approving settlements by LG Chem, Hitachi Maxell and NEC Corp. in an antitrust class action accusing them of rigging prices of lithium ion batteries, calling the information given to her “pretty sparse.”

Under the settlements, LG Chem agreed to pay $39 million, Hitachi Maxell $3.45 million and NEC $2.5 million to indirect purchasers in the United States who bought laptops, camcorders or power tools containing a cylindrical lithium ion battery or a replacement battery made by the defendants between Jan. 1, 2000 and May 31, 2011.

U.S. District Judge Yvonne Gonzalez Rogers said at the Tuesday hearing that she hadn’t been given enough information on how many claimants there would be or how much they would get.

“In principle I’m delighted that people are resolving this,” she said. “But I don’t know how one notifies a class that something is happening but you have absolutely no idea what you’re going to get.”

The indirect purchasers filed a consolidated complaint in the multidistrict litigation in July 2013, accusing 27 defendants from nine corporate families, including Toshiba and Samsung, of conspiring to fix battery prices and restricting output between 2000 and 2011.

LG Chem pleaded guilty to criminal price-fixing in October 2013 and agreed to pay $1.1 million in criminal fines.

At oral argument Tuesday, class counsel Jeff Friedman conceded that the lack of information was a problem.

“The court absolutely puts the court’s finger on what is a very common but bedeviling issue that comes up in class actions all the time: ‘How much are you going to get?’” Friedman told Gonzalez Rogers. “How do we know how many [claimants] we’re going to get? There’s very bad information out there in terms of prediction.”

To fix that, Friedman proposed using the San Francisco tech firm Sipree to distribute settlement awards via email and to increase the number of claimants, prompting Gonzalez Rogers to continue the hearing to March 14 and order additional briefing on Sipree.

Each of Sipree’s email recipients would be allowed to direct their award into a payment form of their choice, such as PayPal or a bank account, Friedman said. He said Sipree could “force” money to class members if they do not respond to their settlement notices, for example, by emailing them a $5 coupon to use on Amazon.com.

Friedman said that class counsel has collected roughly 15.8 million email addresses for class members that Sipree can use to distribute the awards.

Friedman said he proposed using Sipree for distribution in a dairy price-fixing class action settlement awaiting final approval, also in the Northern District of California.

“We hope there are no bumps, but it is new technology,” he conceded.

LG Chem attorney Nathan Eimer told Gonzalez Rogers that neither he nor attorneys for the other settling defendants objected to using Sipree because “one of the prime motivators [of the settlement agreement] is to have the disruption of the case end.”

Gonzalez Rogers expressed interest in Sipree’s potential to increase the number of claimants.

“I certainly get frustrated with low claims rates,” she said. “On the one hand, we write about how one of the goals of these class actions is to help consumers, but when we aren’t reaching them it makes one wonder. So I look forward to seeing your updated proposal.”

In May last year, Gonzalez Rogers preliminarily approved a $19.5 million settlement with Sony, the first in the indirect purchaser case. She has yet to grant final approval, however, saying at a hearing in November that there were too many “moving pieces” to sign off on the deal.

The proposed LG Chem, Hitachi Maxell and NEC settlements are the second, third and fourth settlements in the case.

Together, the four settlements add up to a recovery of $64.45 million. A damages expert estimated that the class suffered $967 million in damages during the 11-year conspiracy.

If approved, Panasonic, Samsung, Sanyo, Toshiba and NEC Tokin Corp. will remain in the indirect purchaser case.

Friedman is with Hagens Berman Sobol Shapiro in Berkeley; Eimer with Eimer Stahl in Chicago.