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Saturday, June 15, 2024 | Back issues
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$37M Deal Ends Disk Drive Price-Fixing Case

SAN FRANCISCO (CN) — Direct buyers of optical disk drives ended six years of litigation Thursday with the final approval of a $37 million settlement and $11 million in attorneys' fees.

A long list of plaintiffs including Hewlett-Packard sued disk drive suppliers in 2010 over an alleged bid-rigging and price-fixing scheme that allowed the defendants to control 90 percent of the optical disk drive market and rake in more than $45 billion in revenue between 2004 and 2008, according to HP.

The latest settlement approval brings direct buyers' total award to $74.9 million with $24 million in attorneys' fees when combined with a prior agreement.

U.S. District Judge Richard Seeborg approved a separate settlement with disk drive makers Hitachi, Panasonic and NEC Corporation for $37.9 million in July last year. The judge also awarded $13 million in attorneys' fees for that settlement.

The settlement Seeborg approved Thursday includes $15 million from a joint venture between Koniklijke Philips and Lite-On Digital Solutions, and $9.2 million from a Toshiba-Samsung joint venture. Co-defendants Pioneer, TEAC, BenQ and Quanta Storage agreed to pay the other $12.8 million.

During Thursday's hearing, Toshiba attorney Belinda Lee confirmed that the settlements only apply to those who directly purchased disk drives or computers containing disk drives between 2004 and 2008. The settlement does not cover purchases of other electronics that use disk drives such as camcorders or game consoles, she said.

A class of more than 230,000 companies and individual direct buyers will share the $74.9 million award, lead class counsel Richard Saveri said.

Six named class representatives will also receive $15,000 incentive payments from the combined settlements.

The liquidating trust for the now-bankrupt Circuit City opted out of the settlement agreement and will pursue its claims separately.

Saveri said after Thursday's hearing that the toughest part of litigating this case over the last six years was fighting for class certification. Seeborg denied a motion to certify two classes of direct and indirect buyers in October 2014.

When asked how the plaintiffs managed to overcome that challenge, class co-counsel Cadio Zirpoli said, "We were able to convince them that on a second round, we'd get class certification."

Both Saveri and Zirpoli praised U.S. Magistrate Judge Jacqueline Scott Corley for doing "a fabulous job" in helping the parties reach a settlement deal.

"If not for her, the case would not have been settled," Saveri said.

In February, Seeborg certified a class of indirect purchasers in the antitrust case, one month after he preliminarily approved a $20.5-million settlement deal between indirect buyers and defendants NEC and Panasonic.

This past October, the European Commission fined five disk drive suppliers — including Hitachi-LG, Toshiba Samsung and Sony — a combined $127 million for their roles in the price-fixing conspiracy.

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