Lithium Battery Antitrust|Case Hangs in the Air

OAKLAND, Calif. (CN) - A federal judge declined to rule Tuesday on whether Microsoft must arbitrate antitrust claims accusing Sony, Samsung and other electronic giants firms of conspiring to fix prices of lithium ion batteries.

U.S. District Judge Yvonne Gonzalez Rogers heard arguments Tuesday on Sony's motion to compel Microsoft to arbitrate its claims in the multidistrict class action in which Samsung, Panasonic and Hitachi are also defendants, but said she would consider oral argument before ruling.

Microsoft claims Sony et al. conspired to fix prices for lithium ion battery cells and lithium ion batteries from Jan. 1, 2000 to May 31, 2011. During that time Nokia, whose mobile device business Microsoft bought in 2013, paid more than it should have for the batteries, Microsoft says.

At issue is an arbitration agreement between Nokia and Sony. Sony says the agreement covers "all disputes related to [Nokia's] commercial relationship with Sony regarding lithium-ion batteries" and requires that disputes over its scope and the arbitrability of claims be resolved by an arbitrator, not a court.

Microsoft responded that the arbitration agreement does not cover the first 18 months of the conspiracy period. It wants to litigate the pre-agreement claims for damages and injunctive relief, and to send the post-agreement damages claims to arbitration.

Gonzalez initially indicated on Tuesday that she would rule for Sony.

"It all arises from the purchase, doesn't it?" Gonzalez told Microsoft attorney B. Parker Miller. "This is all about purchase. Your client purchased something you've got an arbitration agreement about and now you claim the 18 months prior shouldn't be included, but there is no way you can distinguish any of those claims in your complaint, and you wouldn't be here but for those purchases."

Miller responded that Sony backdated the arbitration agreement to July 2000, though it was executed in October 2001, and that it covered only one battery model.

"This was a narrow contract about the purchase of certain lithium ion batteries, it doesn't cover purchases before [the contract]," Miller said. "How can [claims] possibly arise from a contract that doesn't exist? Claims that do not arise from a contract can't be sent to arbitration.

"To take it and apply it to transactions that happened before that contract existed, that's an expansion of arbitration law we haven't seen before."

Gonzalez then hinted that she may grant Microsoft's request and "chop up" the claim.

Sony attorney Jon Cieslak told the judge that even if she does sever Microsoft's claim, "either path leads to arbitration."

Sony agreed in May to settle for $19.5 million, making it the first defendant to do so.

In preliminarily approving the settlement, Gonzalez said at a March hearing that it was "on the low side."

In March, Gonzalez refused Toshiba's request to be dismissed from the case.

Miller is with Alston & Bird in Atlanta, Cieslak with Cooley LLP in San Diego.

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