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Monday, May 20, 2024 | Back issues
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Judge Certifies New Class in Disk Drive Case

SAN FRANCISCO (CN) - A federal judge granted class certification for some indirect purchasers of optical disc drives in an antitrust case alleging a nationwide price-fixing scheme.

In granting certification Monday in 24 jurisdictions nationwide, U.S. District Judge Richard Seeborg found the class meets California law requirements of predominance, class-wide injury and pass-through, for people who bought devices containing optical disk drives.

The Department of Justice in 2009 disclosed an ongoing criminal investigation of Hitachi-LG Data Storage and a number of its employees, who eventually pleaded guilty to antitrust violations in the optical disc drive industry.

Optical disc drives read data off optical disks such as CDs and DVDs. Desk and laptop computers, CD and DVD players, game consoles and camcorders all have optical disc drives.

The Hitachi defendants were fined and some were sentenced to prison terms, but multiple, multidistrict civil lawsuits were filed against Sony, Toshiba, Samsung, Philips and others.

Some defendants did not deny multiple incidents of "bid rigging" during procurements of Dell, Hewlett-Packard and Microsoft disc drives.

But the plaintiffs in the consolidated case say the bid rigging was just one part of a larger, industry-wide price-fixing conspiracy that also involved inter-competitor agreements and exchanges of price, output and other types of confidential information.

The plaintiffs broke down into two groups: direct purchasers and indirect purchasers, both of whom sought separate class certification.

Certification hinged on whether experts had presented a "viable methodology for establishing class-wide antitrust injury and damages," but both groups' experts failed to persuade the court and certification was denied.

The direct and indirect purchasers entered into settlement agreements after class certification was denied by the Ninth Circuit without leave to appeal. Those settlements are pending, but some of the indirect purchaser claims remain.

"The IPPs support their renewed motion with further analysis from Dr. Kenneth Flamm, their economic expert, consisting of both modified and additional approaches to the calculations he performed, and consideration of more data," Seeborg wrote in Monday's 25-page order.

He granted class certification in part based on Flamm's modifications and new data.

"Some of the issues defendants have raised may ultimately be persuasive to a trier of fact that plaintiffs cannot show antitrust injury or establish damages across the class," Seeborg wrote. "The methodologies and theories plaintiffs proffer, however, will stand or fall on a class-wide basis and are not so lacking in substance as to permit rejection at the certification stage."

Seeborg gave the parties until March 9 to "submit jointly a report as to their respective positions on how the litigation should proceed from this juncture."

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