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LG Fights Costco’s $50M Claim in TV Tube Case

SAN FRANCISCO (CN) - LG Electronics on Monday tried to block Costco from seeking $50 million in damages over a 12-year conspiracy to fix the prices of cathode ray tubes used in TVs and other electronics.

Costco's claim for damages as an indirect buyer is barred in Washington state, where Costco is headquartered and purchases were made, an LG attorney argued in court Monday.

But Costco counters it can pursue those claims under California law, where it says the decisions to purchase originated and where it received more products containing price-fixed tubes than in any other state.

Costco's claim for damages is part of a multidistrict antitrust class action stretching back to 2007.

In its two motions for partial summary judgment, LG accused Costco of "cherry-picking" California as its forum, even though Washington state law governs the claims.

"Costco would have your honor focus on California law because that's where they received the bulk of the products," LG attorney Laura Lin said. "They were not injured when they received the products, but when they bought the products."

Lin cited U.S. District Judge Susan Illston's 2013 ruling in an antitrust class action over LCD flat panels, in which the judge found the plaintiffs were injured "in the states where they agreed to pay inflated prices for products, not the states where they merely received products."

Costco attorney Cori Gordon Moore shot back that Costco did not move its headquarters to Issaquah, Washington, until 1999, four years into the TV tube makers' price-fixing scheme.

Both attorneys argued the four factors to consider when determining the proper forum for a claim weigh heavily in their favors. Those factors include where the injury took place; the place where conduct causing the injury occurred; the domicile or place of incorporation of the parties; and the place where the relationship between the parties is centered.

"The purchase orders were issued out of the California offices," Moore told U.S. District Judge Jon Tigar. "Once those purchase orders get issued and the products come to California, that's when the legal obligation to pay what we think is an overcharge occurs."

When pressed by Tigar on where actual payments were made, Moore acknowledged payments were made in Washington but insisted "where the obligation to pay occurs" is the more relevant question.

Earlier in the hearing, Tigar said the injury occurs when "they pay," indicating that he may find the fact payments were made in Washington significant when he issues his ruling.

The judge ended the hearing after about 25 minutes and thanked both attorneys for their "panoramic memory" on a complicated case that has dragged on for nearly a decade.

Earlier this year, LG and other companies were ordered to pay $38 million in attorneys' fees after settling TV tube price-fixing claims with a class of direct buyers for $127 million.

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