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Monday, June 24, 2024 | Back issues
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LCD Manufacturers Lose California Law Protest

(CN) - AT&T Mobility and others can fight various manufacturers of liquid crystal display panels under California price-fixing law, the 9th Circuit ruled Thursday.

With BellSouth Telecommunications and several other voice and data providers, AT&T claims that AU Optronics, Epson and seven other manufacturers conspired to fix the price of mobile handsets containing their LCD panels between 1996 and 2006.

The companies filed the complaint in San Francisco, alleging violations of federal antitrust laws. Even though none of the allegedly fixed purchases took place in California, AT&T also sued under California's Cartwright Act and other state-level laws. Unlike antitrust laws in many other states, the Cartwright Act provides a "private cause of action for indirect purchasers of price-fixed goods," the 9th Circuit noted.

AU Optronics and the other LCD companies moved to dismiss the California-law claims, arguing violations of their due-process rights under the 14th Amendment.

A federal judge agreed, but certified the question to the 9th Circuit.

In a unanimous ruling from San Francisco on Thursday, a three-judge panel approved the application of California law in the case "because the underlying conduct in this case involves not just the indirect purchase of price-fixed goods, but also the conspiratorial conduct that led to the sale of those goods."

"To the extent a defendant's conspiratorial conduct is sufficiently connected to California, and is not 'slight and casual,' the application of California law to that conduct is 'neither arbitrary nor fundamentally unfair,' and the application of California law does not violate that defendant's rights under the due process clause,"

Judge Milan Smith wrote for the panel.

"We remand to the District Court for it to make an individual determination consistent with this opinion with respect to each defendant as to whether plaintiffs have alleged sufficient conspiratorial conduct within California, that is not 'slight and casual,' such that the application of California law to that defendant is 'neither arbitrary nor fundamentally unfair,'" he added.

To date, the LCD price-fixing conspiracy has resulted in criminal convictions, massive fines and billion-dollar consumer class action settlements.

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