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Electronics Firms Must Face Price-Fixing Claims

(CN) - Washington can proceed with claims against numerous foreign electronics companies it says engaged in price-fixing of cathode ray tubes, the state Court of Appeals ruled.

The decision overturned a trial court's dismissal of the state's lawsuit for lack of jurisdiction. The appellate panel also reversed the lower court's awarded fees and declined to award fees on appeal.

In 2012, Washington's attorney general sued more than 20 manufacturers and distributors of the tubes, used in televisions and computers, for allegedly conspiring to raise prices and set production levels.

The defendants include several major industry players, such as Samsung, Hitachi, LG Electronics and Panasonic.

The state claimed in its complaint that corporate price-fixing caused residents to pay "supracompetitive prices for CRT products" in violation of the Washington Consumer Protection Act. The companies moved to dismiss for lack of personal jurisdiction, claiming they had never sold CRTs or CRT products in Washington.

The trial court refused to let the attorney general conduct discovery, dismissed the suit for lack of jurisdiction and awarded the companies attorney fees.

On Monday, the three-judge panel reversed, finding the companies purposefully established "minimum contacts" with Washington as required to support jurisdiction.

"Considered together, the Attorney General's allegations demonstrate the following: (1) that the Companies 'purposefully' established 'minimum contacts' with Washington, (2) that the harm claimed by the Attorney General 'arose' from those minimum contacts, and (3) that the exercise of jurisdiction in this matter is consistent with notions of 'fair play and substantial justice,'" Judge Stephen J. Dwyer said, writing for the majority.

The panel agreed that the Attorney General showed the claims were consistent with due process.

"This is so, he asserts, because (1) the large volume of CRT products that entered Washington constituted a regular flow or regular course of sales, (2) the Attorney General's claims arose from the Companies' contacts with Washington because consumers were injured by paying inflated prices as a result of the Companies' price-fixing, and (3) the concern for otherwise remediless consumers and the danger of insulating foreign manufacturers from the reach of Washington antitrust laws outweigh any inconvenience to the Companies. We agree," the opinion says.

"Although it may be inconvenient for the Companies to defend in Washington, this inconvenience does not outweigh the strong interest that Washington has in providing a forum in which recovery on behalf of indirect purchasers may be pursued," Dwyer wrote.

The case was remanded back to King County Superior Court for further proceedings.

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