Class Cert Denied in Lithium Ion Battery Case

OAKLAND, Calif. (CN) — A federal judge Wednesday denied certification to two proposed classes of plaintiffs in a sprawling antitrust case accusing electronics firms of fixing the prices of lithium ion batteries for more than a decade.

U.S. District Judge Yvonne Gonzalez Rogers denied without prejudice motions by both indirect and direct purchasers of the batteries, finding that both failed to show that the entire class had been affected by the alleged price-fixing.

The batteries are found in everyday gadgets from smartphones and laptops to power tools.

Though both proposed classes may file new motions for certification, Gonzalez Rogers particularly encouraged the indirect purchasers to refile. She said a renewed motion could succeed if it dropped allegations of nationwide claims under California's Cartwright Act.

The indirect purchasers sought to bring nationwide claims under the California law because they said the defendants, which include Panasonic, Samsung and Toshiba, maintain headquarters in the state and chose California law as the framework for their battery contracts.

However, “The court finds that a nationwide class under the Cartwright Act would not be appropriate,” Gonzalez Rogers wrote. “Any renewed motion for class certification should take this determination into account.”

The multidistrict lawsuit, which was transferred to the Northern District of California in 2013, accuses the defendants of restricting output and collectively raising prices between 2000 and 2011. When the global financial crisis hit in 2008 and demand for the batteries plummeted, prices nonetheless stayed constant due to the conspiracy, they say.

In denying the indirect purchasers certification Wednesday, Gonzalez Rogers zeroed in on Edward Leamer’s expert testimony, which she said failed to show that “pass-through and damages can be established by expert analysis on a class-wide basis.”

To establish class-wide impact for indirect purchasers, plaintiffs must show there is a method for proving whether the effects of an overcharge were passed on to each indirect purchaser, and how much the overcharge affected them.

Gonzalez Rogers said that while Leamer’s analysis found a statistically significant pass-through rate of nearly 100 percent, it was unclear whether the analysis included different types of class members and battery products.

“The court is not satisfied that plaintiffs or their experts have explained how the pass-through analysis here demonstrates the antitrust impact is ‘passed on’ to each level of the indirect purchasers in the distribution chain,” the judge wrote.

Indirect purchaser attorney Jeff Friedman said in an email Thursday that his clients intend to file a renewed motion for certification.

"We appreciate the detailed and thoughtful ruling by the court and the time put into the findings," he said. "The analysis provides a straightforward path to addressing the court's issues and we look forward to doing so."

Gonzalez Rogers similarly focused on expert testimony in denying direct purchasers class certification, finding that the analysis of their expert, Roger Noll, did not satisfy predominance requirements because it included data only for Toshiba laptops.

“The analysis of the Toshiba laptops alone does not satisfy the court that a showing of antitrust impact for that product can be extrapolated as a measure of impact for the rest of the cells, batteries and finished products in the class definition,” Gonzalez Rogers wrote. “The court ... cannot ignore the large gaps in the evidence supporting the ability to demonstrate impact and damages on a class-wide basis.”

The indirect purchasers sought to certify a class of all individuals and entities in the United States who indirectly purchased 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.

The direct purchasers sought to certify a class of all individuals and entities that purchased a cylindrical or prismatic lithium ion battery cell or battery, or a product containing a battery cell, directly from defendants located in the United States between May 1, 2002 and May 31, 2011.

In a separate but related order Wednesday, Gonzalez Rogers denied a motion by Hitachi, LG Chem, Samsung and others to dismiss TracFone’s 2015 antitrust claim under Florida’s Deceptive and Unfair Trade Practices Act for being time-barred.

Gonzalez Rogers said TracFone’s allegations that the defendants had hidden their price-fixing scheme were sufficient to state a claim under the Florida statute that is not time-barred.

The indirect purchasers are represented by Jeff Friedman with Hagens Berman Sobol Shapiro in Berkeley. The direct purchasers are represented by Rick Saveri with Saveri & Saveri in San Francisco.

Neither attorney could be reached for comment late Wednesday.

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