Judge Won’t Sign Off on Sony Price-Fixing Deal

OAKLAND, Calif. (CN) — A federal judge Tuesday refused to approve Sony's proposed $19.5 million settlement of an antitrust class action accusing it of conspiring to fix prices of lithium ion batteries.

U.S. District Judge Yvonne Gonzalez Rogers said at a Tuesday hearing for indirect purchasers of the batteries that she was frustrated that the fairness hearing had been set before she could consider all the information in the case.

Though Gonzalez Rogers granted preliminary approval of the settlement in May, she said Tuesday there are too many "moving pieces" to sign off on the deal.

"I have always been reluctant and little bit wary of how amorphous this settlement is," Gonzalez Rogers said. "I will say at the outset that because I am in the midst of preparing for the hearings next week on all of the motions that have been teed up, I'm not approving this settlement today.

"I have a number of questions that need to be answered, and until I have a better perspective on the pros and cons of plaintiffs' case in terms of the IPPs and until I get through the Daughberts, I don't intend to approve the settlement."

Motions to certify the indirect purchaser class and to strike expert testimony will be heard on Nov. 15.

The indirect purchasers filed a consolidated complaint in the multidistrict litigation in July 2013, accusing 27 defendants from nine corporate families, including Toshiba and Samsung, of rigging the prices of lithium ion batteries and restricting output in the United States between Jan. 1, 2000 and May 31, 2011.

The indirect purchasers claim the defendants met in private rooms at hotels and restaurants and communicated through trade associations to fix prices.

Sanyo and LG Chem pleaded guilty to criminal price-fixing in October 2013.

Under the indirect purchaser settlement, Sony agreed to pay $19.5 million and to help prosecute the case against the remaining defendants. If approved, Sony will be the first defendant to settle in the case.

Sony settled similar claims by direct purchasers in September for $19 million, the first defendant to settle in that case as well.

Appearing by telephone Tuesday, objector Christopher Andrews urged Gonzalez Rogers to allow the indirect purchaser suit to proceed to trial. He also asked that plaintiffs' counsel provide a statement to class members of "what they will lose" if they opt out of the settlement.

"The objector requests that the court decline approval of this so-called 'deal' that benefits class counsel," Andrews said. "The material issues must be repaired."

Eight class members have filed objections, and 10 members have opted out of the settlement, according to Sony attorney Beatriz Mejia.

Four of the opt-outs are companies, including Acer and HP.

Reiterating the lack of information, Gonzalez Rogers on Tuesday also denied the plaintiffs' motion for reimbursement of $3.7 million in litigation expenses.

"Until I have a clear view of what is going on with all of these settlements, I'm not going to be inclined to approve anything," Gonzalez Rogers said.

"Once in five years did I grant a motion for fees and expenses based on an attorney declaration. I don't do it. I don't think it's responsible."

Plaintiffs' counsel Steven Williams told Gonzalez Rogers that the settlement is "fair and reasonable."

"We certainly urge the court not to reject approval," he said. "It was a fair compromise to make."

Williams is with Cotchett, Pitre & McCarthy in Burlingame; Mejia with Cooley LLP in San Francisco.

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