TracFone Wireless, Inc. v. AU Optronics Corporation et al

Filing 179


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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 IN RE: TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION / No. M 07-1827 SI MDL No. 1827 10 This Order Relates To: 11 Nos. 3:11-cv-03763-SI; 3:11-cv-02225-SI; 3:11-cv-05765-SI; 3:10-cv-03205-SI Interbond Corp. of America v. AU Optronics Corp., et al., 3:11-cv-03763-SI United States District Court For the Northern District of California 9 12 13 14 15 16 17 ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT ON FLORIDA DOWNSTREAM PASS-ON Office Depot, Inc. v. AU Optronics Corp., et al., 3:11-cv-02225-SI Tech Data Corp., et al. v. AU Optronics Corp., et al., 3:11-cv-05765-SI TracFone Wireless, Inc. v. AU Optronics Corp., et al., 3:10-cv-03205-SI / 18 19 Currently before the Court is defendants’ motion for partial summary judgment on Florida 20 downstream pass-on. Having considered the parties’ papers, and for good cause appearing, the Court 21 hereby GRANTS IN PART AND DENIES IN PART defendants’ motion. 22 23 BACKGROUND 24 Plaintiffs in this case purchased finished products containing LCD panels and resold those 25 products to subsequent purchasers. At all times relevant to this motion, Tech Data was a distributor of 26 LCD products, BrandsMart and Office Depot were retailers that sold LCD products, and TracFone was 27 a wireless carrier that sold mobile phones and wireless minutes. 28 Defendants move for summary judgment as to plaintiffs’ claims under Florida law, arguing that 1 plaintiffs passed on part or all of any overcharges they incurred when purchasing the LCD products. 2 3 LEGAL STANDARD 4 Summary judgment is proper “if the movant shows that there is no genuine dispute as to any 5 material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The 6 moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. 7 Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party, however, has no burden to 8 disprove matters on which the non-moving party will have the burden of proof at trial. The moving 9 party need only demonstrate to the Court that there is an absence of evidence to support the non-moving United States District Court For the Northern District of California 10 party’s case. Id. at 325. 11 Once the moving party has met its burden, the burden shifts to the nonmoving party to “set forth, 12 by affidavit or as otherwise provided in Rule 56, ‘specific facts showing that there is a genuine issue for 13 trial.’” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing 14 Celotex, 477 U.S. at 324). To carry this burden, the non-moving party must “do more than simply show 15 that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. 16 Zenith Radio Corp., 475 U.S. 574, 586 (1986). “The mere existence of a scintilla of evidence . . . will 17 be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving 18 party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). 19 In deciding a summary judgment motion, the Court must view the evidence in the light most 20 favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255. 21 “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from 22 the facts are jury functions, not those of a judge . . . ruling on a motion for summary judgment.” Id. 23 However, conclusory, speculative testimony in affidavits and moving papers is insufficient to raise 24 genuine issues of fact and defeat summary judgment. Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d 25 730, 738 (9th Cir. 1979). The evidence the parties present must be admissible. Fed. R. Civ. P. 56(c)(2). 26 27 28 DISCUSSION Defendants now move for summary judgment as to that portion of plaintiffs’ damages that was 2 1 not absorbed by plaintiffs. Specifically, defendants argue that Florida law permits a downstream pass- 2 on defense, and because it is undisputed that plaintiffs passed on at least part of the alleged overcharges 3 they incurred, defendants are entitled to summary judgment as to those portions of plaintiffs’ claimed 4 damages. Plaintiffs respond that Florida law does not permit a downstream pass-on defense. The Court has previously addressed the issue of the downstream pass-on defense in two other 6 instances in this MDL. See MDL Master Dkt. Nos. 7420, 7593. In the Track 1 cases, the Court held 7 that, in indirect purchaser cases, California, New York, Michigan, Illinois, and Minnesota law all 8 supported the presentation of a downstream pass-on defense. MDL Master Dkt. No. 7420. The Court 9 later considered the availability of the downstream pass-on defense under Florida law in the context of 10 United States District Court For the Northern District of California 5 a motion for judgment on the pleadings. MDL Master Dkt. No. 7593. In denying that motion, the Court 11 noted that Florida lacks any clear law precluding the pass-on defense under the Florida Unfair and 12 Deceptive Trade Practices Act (“FDUTPA”). Id. at 3. 13 The FDUTPA is Florida’s indirect purchaser statute. See Fla. Stat. §§ 501.201-23. It is designed 14 to “protect the consuming public and legitimate business enterprises from those who engage in unfair 15 methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any 16 trade or commerce.” Id. § 501.202(2). To pursue a claim under FDUTPA, a plaintiff must establish that 17 a deceptive or unfair practice caused the plaintiff to suffer actual damages. See In re Florida Cement 18 & Concrete Antitrust Litig., 746 F. Supp. 2d 1291, 1320 (S.D. Fla. 2010) (citation omitted). “Put 19 another way, in order to state a FDUTPA claim for damages a plaintiff must show not only that the 20 conduct complained of was unfair, unconscionable, or deceptive, but also that it has suffered actual 21 damages proximately caused by the unlawful conduct.” Id. at 1321 (citation and internal quotation 22 marks omitted). 23 Only one court has addressed the availability of the downstream pass-on defense in the context 24 of a price-fixing claim under the FDUTPA. See id. at 1322. In Florida Cement, the court granted 25 defendants’ motion to dismiss because the complaint failed to sufficiently allege which products were 26 purchased from which defendants, “or whether these particular indirect purchasers absorbed the alleged 27 price increases or passed them on to their customers.” Id. Although the Florida Cement court did not 28 expressly rule that the downstream pass-on defense was available under the FDUTPA, it appears to have 3 1 assumed its applicability. See id. 2 When the Court considered this issue previously in the context of other state laws that neither 3 expressly permitted nor precluded the downstream pass-on defense, the Court was persuaded that laws 4 that permit only the recovery of actual damages are consistent with the applicability of this defense. See 5 MDL Master Dkt. No. 7420. Under Michigan law, for example, the Court found that the statute’s 6 limitation of recovery to actual damages sustained made it appropriate to allow the defendants to present 7 evidence of their downstream pass-on defense. Id. at 6. The Court likewise found that the downstream 8 pass-on defense was available under Minnesota law where the relevant statute limited recovery to 9 damages that would repay actual losses. Id. at 7-8. United States District Court For the Northern District of California 10 The Court finds that it is appropriate in the circumstances of this case to permit defendants to 11 present evidence of a downstream pass-on defense. Like the laws in Michigan and Minnesota, the 12 FDUTPA limits recovery to actual damages. See Fla. Stat. Ann. § 501.211(2). Florida law also contains 13 a bar on duplicative recovery. Id. § 542.22(2)(a). As the Court has previously stated, the nature of the 14 overlapping claims in this MDL presents the risk of duplicative recovery if downstream pass-on 15 defenses are not permitted. MDL Master Dkt. No. 7420 at 5-7, 10. 16 The Court concludes that, without any authority precluding the downstream pass-on defense 17 under the FDUTPA, and given the risk of duplicative recovery if the defense is precluded, it is 18 appropriate under the circumstances of this MDL is permit defendants to present evidence of their 19 downstream pass-on defense. To hold otherwise would run a great risk that plaintiffs would receive a 20 windfall by permitting them to recover the full extent of any overcharges, without consideration of the 21 amount they recouped by reselling the products. Thus, to the extent defendants’ motion seeks 22 permission to assert a downstream pass-on defense, that motion is GRANTED. 23 However, the Court finds that there are disputed issues of fact regarding the existence and extent 24 of plaintiffs’ downstream pass-on rates. Accordingly, the Court DENIES defendants’ request that the 25 Court quantify plaintiffs’ pass-on rates as set forth in defendants’ experts’ reports. 26 27 28 4 1 CONCLUSION 2 For the foregoing reasons and for good cause shown, and on the basis of the record before it, the 3 Court hereby GRANTS IN PART AND DENIES IN PART defendants’ motion for summary judgment. 4 This Order resolves MDL Master Docket No. 9053. 5 6 IT IS SO ORDERED. 7 8 Dated: September 18, 2014 SUSAN ILLSTON UNITED STATES DISTRICT JUDGE 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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