Some Buyers Excluded From Cathode Ray Case

SAN FRANCISCO (CN) - Manufacturers of cathode ray tubes must face claims that they engaged in a global price-fixing conspiracy, a federal judge ruled.

The cathode ray tube, or CRT, is a vacuum tube consisting of an electron gun that rapidly shoots rays across a florescent-backed, glass screen to produce images.

Though the advent of liquid crystal and plasma display panels made the technology obsolete, prices for such tubes remained steady, raising suspicions among some businesses and consumers.

In a November 2007 complaint, lead plaintiff Nathan Muchnick Inc. said he overpaid for products containing cathode ray tubes (CRTs) because prices had been artificially inflated by co-defendants Matsushita Industrial Electrical, Chunghwa Picture Tubes, Samsung Electronics Co. Ltd. Toshiba Corp., LG Electronics and Tatung Co.

"Defendants' conspiracy was intended to, and did, moderate the downward price pressures on CRT products caused by the market entry and rapid penetration of more technologically advanced competitive products," the complaint states.

The manufacturers countered that indirect purchasers lacked standing under Illinois Brick Company v. Illinois.

U.S. District Court Judge Charles Legge, brought in from retirement to act as a "special master," concluded on May 31, 2012, the indirect purchasers did in fact lack standing under the Clayton Act and recommended the court grant the defendants' motion for summary judgment.

U.S. District Judge Samuel Conti agreed Thursday, stating the Clayton Act provides that "only a person 'injured in his business or property by reason of anything forbidden in the antitrust laws' has standing to bring an antitrust suit."

"Because these plaintiffs did not purchase allegedly price-fixed CRTs directly, they are indirect purchasers and Illinois Brick bars their suit unless one of the three recognized exceptions applies," he wrote.

Since the "ownership-and-control" exception laid out in Royal Printing Co. v. Kimberly-Clark Corp. also applies, however, Legge said that the plaintiffs "have standing to sue for alleged overcharges passed on to them when they purchased an FP (finished product) containing an allegedly price-fixed CRT from an entity allegedly owned or controlled by an allegedly conspiring defendant."

They do not have standing to sue for overcharges passed on from any other seller of finished products, he added.

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