Embattled Flat Panel Makers See Suits Heat Up

(CN) - Related price-fixing claims against two flat-panel makers took separate twists this week following summary judgment motions involving Sony and the late Circuit City.

U.S. District Judge Susan Illston in San Francisco on Wednesday found plaintiff Sony Electronics had submitted inadmissible emails in breach of mediation agreement claims against HannStar Display, which pleaded guilty three years ago to conspiring to fix prices of liquid crystal display screens.

In 2011, Sony and HannStar agreed to mediate their dispute with the aid of Professor Eric Green. After coming to terms, however, Hannstar told Sony it could not pay the unspecified amount Green set.

In a back-and-forth legal battle, Sony filed an instant motion for summary judgment on breach of contact claims, alleging that emails between the parties and Green formed a binding contract with HannStar.

Illston found the emails inadmissible, however, under California provisions governing mediation confidentiality - specifically, Cal. Evid. Code. § 1119(a).

"In support of its summary judgment motion, Sony has submitted a series of e-mails that were undisputedly 'made for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation,' and are therefore inadmissible unless they fall within a specifically enumerated exception to the mediation confidentiality statute," Illston wrote. "The court finds that, because the e-mails do not affirmatively provide that the agreement the parties reached is enforceable or binding, the purported settlement agreement is inadmissible."

The seven-page ruling also states that it may be inequitable to permit HannStar to avoid its agreement to settle, but that "such inequity alone does not permit the court to fashion a new exception to the mediation confidentiality statute."

In another ruling, Illston refused to let AU Optronics use choice of law as a means to win summary judgment on the price-fixing claims Circuit City filed against it.

AU claimed that Virginia law governed Circuit City since it was headquartered in Richmond before a 2009 bankruptcy sent the company belly-up, but Illston disagreed.

"The court finds that California's interest will be most impaired if its law is not applied," the 11-page ruling, also levied Wednesday, states. "Virginia's consumer protection statute focuses on limiting who can bring suit to plaintiffs who engaged in consumer transactions for personal use. California's consumer protection statute sweeps more broadly, with a primary focus on the defendant's conduct, rather than the plaintiff's injury."

Illston did dismiss Circuit City's claim under the Illinois Antitrust Act against AU Optronics but upheld claims for violations of the Sherman Act, California Cartwright Act, California consumer protection and unfair competition laws, and for restitution and unjust enrichment under California law.

"No Virginia citizen or business entity is a defendant in this case, so that no Virginia entity will be adversely affected by application of California's law or by failure to apply Virginia's law," Illston wrote.

AU Optronics, in 2012, was ordered to pay $500 million for fixing the prices of the liquid crystal display panels that it sold to Apple and other companies.

The amount matched the largest fine imposed against a company for violating the U.S. antitrust laws.

The company separately agreed to pay $170 million to settle price-fixing claims involving co-defendants Toshiba and LG Display, in April.

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