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

Filing 179

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT ON FLORIDA DOWNSTREAM PASS-ON 9053 in case 3:07-md-01827-SI (Illston, Susan) (Filed on 9/18/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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IN RE: TFT-LCD (FLAT PANEL) ANTITRUST
LITIGATION
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No. M 07-1827 SI
MDL No. 1827

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This Order Relates To:

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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

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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
/

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Currently before the Court is defendants’ motion for partial summary judgment on Florida

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downstream pass-on. Having considered the parties’ papers, and for good cause appearing, the Court

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hereby GRANTS IN PART AND DENIES IN PART defendants’ motion.

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BACKGROUND

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Plaintiffs in this case purchased finished products containing LCD panels and resold those

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products to subsequent purchasers. At all times relevant to this motion, Tech Data was a distributor of

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LCD products, BrandsMart and Office Depot were retailers that sold LCD products, and TracFone was

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a wireless carrier that sold mobile phones and wireless minutes.

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Defendants move for summary judgment as to plaintiffs’ claims under Florida law, arguing that

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plaintiffs passed on part or all of any overcharges they incurred when purchasing the LCD products.

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LEGAL STANDARD

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Summary judgment is proper “if the movant shows that there is no genuine dispute as to any

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material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The

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moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact.

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Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party, however, has no burden to

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disprove matters on which the non-moving party will have the burden of proof at trial. The moving

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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

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party’s case. Id. at 325.

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Once the moving party has met its burden, the burden shifts to the nonmoving party to “set forth,

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by affidavit or as otherwise provided in Rule 56, ‘specific facts showing that there is a genuine issue for

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trial.’” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing

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Celotex, 477 U.S. at 324). To carry this burden, the non-moving party must “do more than simply show

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that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v.

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Zenith Radio Corp., 475 U.S. 574, 586 (1986). “The mere existence of a scintilla of evidence . . . will

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be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving

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party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).

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In deciding a summary judgment motion, the Court must view the evidence in the light most

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favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255.

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“Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from

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the facts are jury functions, not those of a judge . . . ruling on a motion for summary judgment.” Id.

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However, conclusory, speculative testimony in affidavits and moving papers is insufficient to raise

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genuine issues of fact and defeat summary judgment. Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d

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730, 738 (9th Cir. 1979). The evidence the parties present must be admissible. Fed. R. Civ. P. 56(c)(2).

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DISCUSSION
Defendants now move for summary judgment as to that portion of plaintiffs’ damages that was
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not absorbed by plaintiffs. Specifically, defendants argue that Florida law permits a downstream pass-

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on defense, and because it is undisputed that plaintiffs passed on at least part of the alleged overcharges

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they incurred, defendants are entitled to summary judgment as to those portions of plaintiffs’ claimed

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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

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instances in this MDL. See MDL Master Dkt. Nos. 7420, 7593. In the Track 1 cases, the Court held

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that, in indirect purchaser cases, California, New York, Michigan, Illinois, and Minnesota law all

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supported the presentation of a downstream pass-on defense. MDL Master Dkt. No. 7420. The Court

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later considered the availability of the downstream pass-on defense under Florida law in the context of

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United States District Court
For the Northern District of California

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a motion for judgment on the pleadings. MDL Master Dkt. No. 7593. In denying that motion, the Court

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noted that Florida lacks any clear law precluding the pass-on defense under the Florida Unfair and

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Deceptive Trade Practices Act (“FDUTPA”). Id. at 3.

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The FDUTPA is Florida’s indirect purchaser statute. See Fla. Stat. §§ 501.201-23. It is designed

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to “protect the consuming public and legitimate business enterprises from those who engage in unfair

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methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any

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trade or commerce.” Id. § 501.202(2). To pursue a claim under FDUTPA, a plaintiff must establish that

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a deceptive or unfair practice caused the plaintiff to suffer actual damages. See In re Florida Cement

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& Concrete Antitrust Litig., 746 F. Supp. 2d 1291, 1320 (S.D. Fla. 2010) (citation omitted). “Put

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another way, in order to state a FDUTPA claim for damages a plaintiff must show not only that the

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conduct complained of was unfair, unconscionable, or deceptive, but also that it has suffered actual

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damages proximately caused by the unlawful conduct.” Id. at 1321 (citation and internal quotation

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marks omitted).

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Only one court has addressed the availability of the downstream pass-on defense in the context

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of a price-fixing claim under the FDUTPA. See id. at 1322. In Florida Cement, the court granted

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defendants’ motion to dismiss because the complaint failed to sufficiently allege which products were

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purchased from which defendants, “or whether these particular indirect purchasers absorbed the alleged

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price increases or passed them on to their customers.” Id. Although the Florida Cement court did not

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expressly rule that the downstream pass-on defense was available under the FDUTPA, it appears to have
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assumed its applicability. See id.

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When the Court considered this issue previously in the context of other state laws that neither

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expressly permitted nor precluded the downstream pass-on defense, the Court was persuaded that laws

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that permit only the recovery of actual damages are consistent with the applicability of this defense. See

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MDL Master Dkt. No. 7420. Under Michigan law, for example, the Court found that the statute’s

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limitation of recovery to actual damages sustained made it appropriate to allow the defendants to present

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evidence of their downstream pass-on defense. Id. at 6. The Court likewise found that the downstream

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pass-on defense was available under Minnesota law where the relevant statute limited recovery to

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damages that would repay actual losses. Id. at 7-8.

United States District Court
For the Northern District of California

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The Court finds that it is appropriate in the circumstances of this case to permit defendants to

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present evidence of a downstream pass-on defense. Like the laws in Michigan and Minnesota, the

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FDUTPA limits recovery to actual damages. See Fla. Stat. Ann. § 501.211(2). Florida law also contains

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a bar on duplicative recovery. Id. § 542.22(2)(a). As the Court has previously stated, the nature of the

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overlapping claims in this MDL presents the risk of duplicative recovery if downstream pass-on

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defenses are not permitted. MDL Master Dkt. No. 7420 at 5-7, 10.

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The Court concludes that, without any authority precluding the downstream pass-on defense

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under the FDUTPA, and given the risk of duplicative recovery if the defense is precluded, it is

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appropriate under the circumstances of this MDL is permit defendants to present evidence of their

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downstream pass-on defense. To hold otherwise would run a great risk that plaintiffs would receive a

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windfall by permitting them to recover the full extent of any overcharges, without consideration of the

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amount they recouped by reselling the products. Thus, to the extent defendants’ motion seeks

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permission to assert a downstream pass-on defense, that motion is GRANTED.

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However, the Court finds that there are disputed issues of fact regarding the existence and extent

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of plaintiffs’ downstream pass-on rates. Accordingly, the Court DENIES defendants’ request that the

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Court quantify plaintiffs’ pass-on rates as set forth in defendants’ experts’ reports.

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CONCLUSION

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For the foregoing reasons and for good cause shown, and on the basis of the record before it, the

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Court hereby GRANTS IN PART AND DENIES IN PART defendants’ motion for summary judgment.

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This Order resolves MDL Master Docket No. 9053.

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IT IS SO ORDERED.

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Dated: September 18, 2014
SUSAN ILLSTON
UNITED STATES DISTRICT JUDGE

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United States District Court
For the Northern District of California

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