State of Florida, Office of the Attorney General, Department of Legal Affairs v. AU Optronics Corporation et al
Filing
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ORDER GRANTING DEFENDANTS' JOINT MOTION FOR PARTIAL STAY RE: FLORIDA AND MICHIGAN COMPLAINTS (SI, COURT STAFF) (Filed on 4/13/2011)
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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:
Case No. C 10-3517 SI
Case No. C 10-3619 SI
United States District Court
For the Northern District of California
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STATE OF FLORIDA,
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Plaintiff,
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ORDER GRANTING DEFENDANTS’
JOINT MOTION FOR PARTIAL STAY
RE: FLORIDA AND MICHIGAN
COMPLAINTS
v.
AU OPTRONICS CORP., et al.,
Defendants;
_______________________________________/
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STATE OF MISSOURI, et al.,
Plaintiffs,
v.
AU OPTRONICS CORP., et al.,
Defendants.
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On February 7, 2011, defendants moved to stay the claims of plaintiff Florida in State of Florida
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v. AU Optronics Corp, et al., Case No. 10-3517, and plaintiff Michigan in State of Missouri, et al. v. AU
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Optronics Corp., et al., Case. No. 10-3619, to the extent such claims are brought on behalf of non-State
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consumers in either Florida or Michigan. The Court finds it appropriate to take the motion under
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submission without oral argument. See Civ. L.R. 7-1(b). For the reasons set forth below, the motion
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is GRANTED.
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BACKGROUND
These parens patriae actions allege a global price-fixing conspiracy in the market for Thin Film
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Transistor Liquid Crystal Display (“TFT-LCD”) panels. TFT-LCD panels are used in a number of
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products, including but not limited to computer monitors, laptop computers, televisions, and a number
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of other products. TFT-LCD panels are sold in a variety of sizes, and vary across a number of technical
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dimensions. TFT-LCD panels have no independent utility, but have value only as components of other
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products. When a TFT-LCD panel is incorporated into a finished product, the panel is not modified,
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and remains a discrete, physical object within the finished product. TFT-LCD panels are purchased by
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many different types and sizes of customers through different manufacturing and distribution channels.
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United States District Court
For the Northern District of California
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In about 2006, the Antitrust Division of the Department of Justice began investigating a number
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of the defendants’ alleged participation in a global conspiracy to fix prices of TFT-LCD panels. The
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investigation is ongoing. To date, approximately seven corporate defendants have pled guilty to
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Sherman Act violations relating to suppressing and eliminating competition by fixing the prices of TFT-
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LCD panels, including Sharp Corporation (CR 08-802 SI); LG Display Co. Ltd. and LG Display
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America, Inc. (CR 08-803 SI), Chunghwa Picture Tubes, Ltd. (CR 08-804 SI); Hitachi Displays Ltd.
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(CR 09-247 SI); Epson Imaging Devices Corporation (CR 09-854 SI); and Chi Mei Optoelectronics
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Corporation (CR 09-1166 SI).
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On November 5, 2007, a class of indirect product purchasers (“IPP”) filed a consolidated
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complaint which, among other things, brought claims on behalf of proposed classes of Florida and
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Michigan consumers. The IPP’s Florida claims were brought under the Florida Deceptive and Unfair
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Trade Practices Act (“FDUTPA”), and the Michigan claims were brought under the Michigan Antitrust
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Reform Act (“MARA”). On March 28, 2010, the Court certified various classes in the IPP action,
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including a Florida class and a Michigan class.
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On August 11, 2010, the State of Florida filed a Complaint For Damages, Civil Penalties and
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Injunctive Relief naming many of the same defendants as the IPP class action. (Case No. 10-3517,
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Docket No. 1 (“Florida Complaint”).) The Florida Complaint alleges that “[t]he State of Florida brings
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this action against the Defendants under the Sherman Act, the Clayton Act, the Florida Antitrust Act,
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and the [FDUTPA] on behalf of itself and its governmental entities, and on behalf of natural persons in
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Florida.” (Florida Complaint ¶ 1.) The Florida Complaint alleges that defendants “conspired to
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suppress and eliminate competition by fixing the prices of TFT-LCD Panels, and to suppress and
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eliminate competition by agreeing to limit the production of TFT-LCD Panels.” (Id. ¶ 2.) The Florida
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Complaint asserts certain direct and indirect purchaser claims allegedly assigned to it by retailers with
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which the State has contractual agreements. (Id. ¶¶ 107-113.) The Florida Complaint also asserts a
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claim under the FDUTPA “for all direct and indirect purchases of TFT-LCD Panels and TFT-LCD
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Products by governmental entities and consumers in the State of Florida.” (Id. ¶ 126.) Florida prays
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for declaratory relief, equitable relief, treble damages, statutory damages, restitution and civil penalties.
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(Id. ¶ 129.)
United States District Court
For the Northern District of California
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On August 17, 2010, the States of Missouri, Arkansas, Michigan, West Virginia and Wisconsin
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filed a Complaint For Damages, Civil Penalties, Injunctive and Other Relief naming many of the same
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defendants named in the IPP class action. (Case No. 10-3619, Docket No. 1 (“Michigan Complaint”).)
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The Michigan Complaint is in many respects similar to the Florida Complaint and alleges a conspiracy
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to suppress and eliminate competition in the market for TFT-LCD Panels. Michigan brings the civil
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action “in the name of the State of Michigan, as parens patriae on behalf of natural persons residing in
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Michigan, and on behalf of itself and its State Agencies.” (Id. ¶ 16.) The Michigan Complaint further
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alleges that “[u]nder Michigan law, the Attorney General may obtain injunctive relief, be awarded treble
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damages, or otherwise recover all ascertainable losses incurred by virtue of overcharges paid by the
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State of Michigan, its State agencies, and natural persons, be awarded civil penalties arising from any
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violations of Michigan law, and obtain other equitable and statutory relief.” (Id.) Count Four of the
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Michigan Complaint alleges a violation of MARA and states that “the State of Michigan, its State
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Agencies, and natural persons that directly or indirectly purchased TFT-LCD products are entitled to
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damages and other equitable relief pursuant to [MARA] for losses incurred directly or indirectly as a
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result of Defendants’ conduct alleged herein.” (Id. ¶ 131.)
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LEGAL STANDARD
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Defendants’ motion is based on the first-to-file rule. The first-to-file rule was developed to
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“serve the purpose of promoting efficiency well and should not be disregarded lightly.” Alltrade, Inc.
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v. Uniweld Prods, Inc., 946 F.2d 622, 625 (9th Cir. 1991), quoting Church of Scientology v. United
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States Dep’t of the Army, 611 F.2d 738, 750 (9th Cir. 1979). Under the first-to-file rule, a district court
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may transfer, stay or dismiss an action when a similar action has been filed in another district court. See
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Alltrade, 946 F.2d at 625-26. When deciding whether to apply the first-to-file rule, the court must look
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at three factors: (1) the chronology of the two actions; (2) the similarity of the parties; and (3) the
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similarity of issues. Id. The fact that there are additional defendants in one of the actions is not
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dispositive. Barapind v. Reno, 72 F. Supp. 2d 1132, 1145 (E.D. Cal. 1999) (“If the parties ‘represent
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the same interests’ the court may determine the second action is duplicative.”). In a class action, the
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classes, and not the class representatives, are compared. Weinstein v. Metlife, Inc., 2006 WL 3201045
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United States District Court
For the Northern District of California
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at *4 (N.D. Cal. 2006) (Illston, J.), citing Cal. Jur. 3d Actions § 284. “Exact parallelism between the
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two actions need not exist; it is enough if the parties and issues in the two actions are ‘substantially
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similar.’” Alioto v. Hoiles, 2004 WL 2326367 at *5 (N.D. Cal. 2004) (Hamilton, J.)
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DISCUSSION
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Defendants move to stay the claims of Florida and Michigan to the extent that they are brought
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on behalf of natural persons (i.e., purchasers other than the state or state entities). (Motion at 1.)
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Defendants contend that the parens patriae claims asserted on behalf of Florida and Michigan
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consumers overlap with the class claims asserted in the IPP class action,1 which was filed long before
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the Florida and Michigan Complaints. (Id.) As a result, defendants argue that the first-to-file rule
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requires that the later-filed parens patriae claims asserted on behalf of absent non-state purchasers be
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stayed pending resolution of the IPP class action. (Id.) In the alternative, defendants request that the
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claims asserted on behalf of the Florida and Michigan classes in the IPP class action be stayed pending
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the resolution of those States’ parens patriae claims. (Id.)
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Plaintiffs Florida and Michigan oppose the motion on the ground that the parens patriae claims
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The Florida Complaint asserts claims for “direct and indirect purchases . . . by . . . consumers”
(Id. ¶ 126), and the Michigan Complaint asserts claims for “natural persons that directly or indirectly
purchased TFT-LCD products.” (Id. ¶ 131.) Given the structure of the market, direct purchases by
consumers are unlikely, but possible. To the extent they occurred, they would be subject to the same
first-to-file policy considerations discussed in this order, but with respect to the direct product purchaser
class actions.
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are fundamentally different than the IPP class action, that the states will be damaged if a stay is imposed
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and that judicial economy will be served by allowing the cases to continue. (Florida’s Opposition at 1;
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Michigan’s Opposition at 1.) In particular, Florida and Michigan argue that the States, not the
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consumers on whose behalf the claims are brought, constitute the actual parties to the litigation, and that
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the parens patriae actions and the consumer class action are therefore not duplicative. (Florida
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Opposition at 6.) Florida and Michigan also contend that the issues raised in the parens patriae suits
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differ from the IPP class action because the statutes under which their actions are brought authorize
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various remedies not available in the IPP class action and, in the case of Florida, the parens patriae
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action involves conduct that predates the IPP class period. (Florida Opposition at 7-13; Michigan
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United States District Court
For the Northern District of California
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Opposition at 3-4.) If the Court determines that the Florida IPP class action and the parens patriae
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action are duplicative, Florida requests that — rather than impose a stay — the Court issue a
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consolidated schedule for the two actions. (Florida Opposition at 21.)
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Preliminarily, it appears that defendants and plaintiffs frame their respective comparisons of the
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IPP class action and the parens patriae actions differently. Though it is not entirely clear, plaintiffs
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appear to compare the IPP class action to the Florida and Michigan parens patriae actions in their
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entirety, including those claims asserted on behalf of, for example, the state and its various agencies.
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(See Florida Opposition at 9-12.) However, the instant motion is concerned solely with those claims
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asserted by Florida and Michigan on behalf of natural persons (“non-State consumers”) in their
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respective states. (Motion at 1, Reply at 4.) Moreover, the Court does not interpret defendants’ motion
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as requesting a stay of claims that were contractually assigned to the State. (See Florida Complaint ¶¶
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107-113; Michigan Complaint ¶¶ 99-109.) As a result, the appropriate comparison is between the
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claims asserted by Florida and Michigan on behalf of natural persons in their states to those asserted in
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the IPP class action on behalf of the Florida and Michigan classes.
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With that comparison in mind, the Court concludes that a limited stay is appropriate. First, it
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is undisputed that the IPP consolidated complaint was filed several years before the parens patriae
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actions filed by Florida and Michigan. Second, the parties in both actions are substantially similar.
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Though Florida and Michigan are correct that the States, and not individual consumers, are the named
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parties in a parens patriae action, certain of their claims are asserted “on behalf” of individual
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consumers of TFT-LCD products. This Court has already held in the context of class action lawsuits
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that it is the class, not the class representatives, that are relevant for purposes of the first-to-file rule.
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Weinstein, 2006 WL 3201045 at *4. Because Plaintiffs seek to assert claims on behalf of absent
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consumers, a similar approach is appropriate here. Moreover, the Court finds that the composition of
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the absent classes in the parens patriae actions are substantially similar to the Florida and Michigan
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classes certified in the IPP class action. (See M 07-1827, Docket No. 1642 at 37-38) (certifying classes
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including all persons and entities in Michigan and Florida “who, from January 1, 1999 to December 31,
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2006 . . . purchased LCD panels incorporated in televisions, monitors, and/or laptop computers . . . .”)
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Finally, the issues raised in the two lawsuits are substantially similar. Both the parens patriae actions
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United States District Court
For the Northern District of California
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and the IPP class action allege a broad conspiracy to fix the price of TFT-LCD products among nearly
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identical groups of defendants and over essentially the same period of time. Both the Michigan parens
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patriae action and the IPP class action allege violations of MARA. (Compare Michigan Complaint ¶¶
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127-131 with IPP Second Amended Complaint ¶ 267.) Both the Florida parens patriae action and the
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IPP class action allege violations of the FDUTPA. (Compare Florida Complaint ¶¶ 125-128 with IPP
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Second Amended Complaint ¶ 287.)
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conduct that occurred in 1998 while the IPP class action is limited to conduct that occurred on or after
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January 1, 1999, Florida provides no basis on which the Court could find that the alleged conduct in
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1998 substantially changes the character of the issues involved in the case in a way that would
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distinguish its claims from those of the IPP class. Accordingly, the Court finds that the first-to-file rule
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and the general interest in judicial efficiency supports a limited stay in this case.
Although the Florida parens patriae action relies in part on
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CONCLUSION
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For the foregoing reasons, the Court GRANTS defendants’ motion to stay as follows. (Case No.
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07-1827, Docket No. 2406; Case No. 10-3517, Docket No. 16; Case No. 10-3619, Docket No. 20.) All
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claims asserted by Florida or Michigan on behalf of natural persons in those states are hereby STAYED.
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This order shall not apply to any claim brought on behalf of the State of Florida or its agencies, any
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claim brought on behalf of the State of Michigan or its agencies, or any claim that plaintiffs allege was
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contractually assigned to the State of Florida or the State of Michigan.
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This stay shall remain in effect until the earlier of: entry of judgment with respect to Florida or
Michigan classes certified in the IPP class action (Case No. 07-1827) or April 30, 2012.
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IT IS SO ORDERED.
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Dated: April 13, 2011
SUSAN ILLSTON
United States District Judge
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United States District Court
For the Northern District of California
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