Global Capacitor Price-Fixing Case Survives

     SAN FRANCISCO (CN) – A worldwide antitrust case alleging price-fixing in capacitors will proceed though a federal judge dismissed 15 of 27 defendants Tuesday, with leave to amend.
     Direct purchase plaintiffs (DPP) accused manufacturers in Japan, Taiwan, Germany and the United States of fixing prices of aluminum, tantalum and film capacitors since 2003.
     Indirect purchaser plaintiffs (IPP) sued separately on similar claims.
     The defendants sought dismissal of the DPP complaint for failure to state a claim, but “concede the plausibility of the antitrust claim in the IPP complaint, but challenge it on standing and state law grounds,” U.S. District Judge James Donato wrote in his ruling.
     He denied the defendants’ motions “for the most part,” but granted dismissal for some, “who were sued because they belong to an alleged family of conspirators rather than on the basis of specific allegations against them individually. DPPs and IPPs will have an opportunity to amend.”
     Calling the technology issue “straightforward,” Donato described capacitors as “one of the most basic functional units in electronic circuits.” They act essentially as short-term batteries, to regulate and smooth out the flow of electrons.
     “Capacitors are incorporated into almost every electronic device, including audio/video equipment, telecommunication equipment, computers and automobiles,” direct purchaser plaintiff eIQ said in its August 2014 complaint.
     eIQ, a small company that makes clean energy electronic products, claims the capacitor market is “susceptible to collusion” because the market is concentrated and “the five largest defendants collectively make up more than 76 percent of the global market for tantalum capacitors.”
     It adds that “pricing for capacitors is highly inelastic in large part because there are no adequate substitutes.”
     Direct purchaser plaintiffs include are New York-based Chip-Tech, Florida-based Dependable Component Supply, California-based eIQ Energy and Colorado-based Walker Component Group.
     They the accuse defendants of violating the Sherman Act by fixing prices through a “single overarching conspiracy ‘in aluminum, tantalum and film capacitors,'” Donato wrote.
     The class period for direct purchasers runs from Jan. 1, 2003, to the present.
     The indirect purchasers included 31 plaintiffs from 22 states. They claim that every capacitor they bought can be traced to a company owned by the defendants, whom they accused of violating the Sherman Act, the California Cartwright Act and the California Unfair Competition Law.
     “This putative consumer group was the only group to allege claims on the basis of finished goods that included capacitors,” Donato wrote. They “allege two ‘massive and separate conspiracies’ to fix the prices of ‘electrolytic and film capacitors, respectively.”
     The class period for electrolytic plaintiffs has a start date of Jan, 1, 2003, while the start date for the film capacitors class has a start date of Jan. 1, 2007.
     The defendants filed four motions to dismiss. Donato found that the defendants’ “main attack on the DPP complaint is that it falls short of plausibility.”
     The defendants did not challenge the sufficiency of the allegations of two separate conspiracies for electrolytic and film capacitors, but did challenge the plausibility of a single conspiracy to fix the prices of both types of capacitors.
     “Both sides exaggerate their positions,” Donato found, but there is “sufficient grounding in fact to go forward” with the DPP complaint.
     He said the defendants “overstate” the differences in the two complaints.
     “Despite the allegation of two separate conspiracies, the IPPs acknowledge that some defendants (Hitachi, NCC, Rubycon and Panasonic) participated in both, and that ‘discovery may reveal that there was one overarching conspiracy due to the overlapping defendants and customers,'” Donato wrote.
     “Not only are the factual allegations between the two complaints not as dissimilar as defendants contend, there simply is no requirement that an antitrust plaintiff draw the boundaries of the alleged conspiracy (or conspiracies) in a complaint with the precision of a diamond cutter.” (Parentheses in ruling.)
     The defendants jointly sought dismissal because the plaintiffs did not specify which U.S. subsidiaries joined a majority of companies that participated in the alleged conspiracy. Donato rejected that also.
     “This case involved 22 defendant groups and … the court declines the invitation to do the heavy lifting on its own time and resources to figure out which defendants fall into the ‘majority’ and which do not.”
     Instead, Donato addressed separate motions to dismiss made by individual defendants and denied the joint motion to dismiss the majority of U.S. defendants.
     The companies that prevailed, at this step, argued that they had no direct connection to or involvement in conspiracies to fix prices.
     Dismissed with leave to amend the DPP complaint are AVX, EPCOS, TDK-EPC, TDK U.S.A., Fujitsu Components America, KEMET Electronics and KEMET Electronics.
     Also dismissed with leave to amend are Nichicon (America), Okaya Electric America, ROHM Semiconductor U.S.A., Shinyei Capacitor, Shinyei Corporation of America, Shoshin Electronics of America, United Chemi-Con and Vishay Intertechnology.
     Also dismissed with leave to amend are ELNA America, Hitachi Chemical, NEC TOKIN America, Nichicon (America), Rubycon America and United Chemi-Con.
     Donato also struck all references to a nationwide class action for indirect purchasers’ claims under California’s Cartwright Act and Unfair Competition Law.
     Attorneys for plaintiffs could not be reached for comment.

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