Best Buy Co., Inc. et al v. AU Optronics Corp. et al

Filing 307

ORDER DENYING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT DISMISSING BEST BUY'S PRE-OCTOBER 8, 2006 CLAIMS AS TIME-BARRED AND FOR PARTIAL SUMMARY JUDGMENT OF BEST BUY'S FAILURE TO MITIGATE DAMAGES; GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT 6174 6379 6924 (Illston, Susan) (Filed on 12/10/2012)

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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 9 United States District Court For the Northern District of California 10 IN RE: TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION / Case No. 10-4572 SI 11 12 No. M 07-1827 SI MDL. No. 1827 This Order Relates to: ORDER DENYING DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT DISMISSING BEST BUY’S PRE-OCTOBER 8, 2006 CLAIMS AS TIME-BARRED AND FOR PARTIAL SUMMARY JUDGMENT OF BEST BUY’S FAILURE TO MITIGATE DAMAGES; GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT Best Buy et al. v. AU Optronics Corporation, et al., C 10-4572 SI 13 14 15 16 / 17 18 Defendants’ motion for partial summary judgment dismissing Best Buy’s pre-October 8, 2006 19 claims as time-barred and for partial summary judgment of Best Buy’s failure to mitigate damages is 20 scheduled for a hearing on December 14, 2012. Best Buy’s motion for leave to file second amended 21 complaint is also scheduled for a hearing on the same day. Pursuant to Civil Local Rule 7-1(b), the 22 Court determines that these matters are appropriate for resolution without oral argument, and 23 VACATES the hearing on these motions. For the reasons set forth in this order, defendants’ motion is 24 DENIED and plaintiff’s motion is GRANTED. Docket Nos. 6174, 6379 and 6924. 25 26 27 28 DISCUSSION I. Defendants’ motion for summary judgment Best Buy filed its complaint in this case on October 8, 2010. Defendants contend that Best Buy’s claims relating to conduct occurring before October 8, 2006 are barred by the applicable four-year 2 statute of limitations because the evidence shows that Best Buy had knowledge of the facts underlying 3 its claims as early as May 15, 2003.1 Defendants rely on a May 15, 2003 e-mail from Best Buy 4 Merchandising Director Kevin Winneroski to other Best Buy employees and employees of Toshiba 5 America Information Systems (“TAIS”), an entity that sold notebook computers containing LCD panels 6 to Best Buy. The e-mail described a meeting of the same day between Mr. Winneroski and several TAIS 7 employees, and it states inter alia, “Panels are a spotty issue – not necessarily any real shortages, likely 8 more an issue of the ‘panel cartel’ conspiring to keep supply down to drive prices up.” Docket No. 9 6380, Ex. 1. Defendants have also submitted evidence showing that on May 28, 2003, the “panel cartel” 10 United States District Court For the Northern District of California 1 was mentioned on an internal PowerPoint presentation to Best Buy management. Id. at Ex. 3; see also 11 id. at Ex. 4 (March 7, 2005 e-mail from Best Buy employee to other Best Buy employees stating “cartel 12 holding supply down to drive pricing”). 13 To toll the statute of limitations under a theory of fraudulent concealment, Best Buy must prove 14 that defendants “fraudulently concealed the existence of the cause of action so that [Best Buy], acting 15 as a reasonable person, did not know of its existence.” Conmar Corp. v. Mitsui & Co. (U.S.A.), Inc., 16 858 F.2d 499, 502 (9th Cir. 1988). Summary judgment is appropriate “if uncontroverted evidence 17 ‘irrefutably demonstrates that a plaintiff discovered or should have discovered [the cause of action] but 18 failed to file a timely complaint.’” Id. (quoting Volk v. D.A. Davidson & Co., 816 F.2d 1406, 1417 (9th 19 Cir. 1987)). 20 The Court concludes that summary judgment is not appropriate because defendants have not 21 shown with uncontroverted evidence that Best Buy discovered or should have discovered its antitrust 22 claims prior to October 2006. Best Buy has submitted deposition testimony of Best Buy witnesses who 23 stated that they had no knowledge of a price-fixing conspiracy in May 2003, and that the “panel cartel” 24 comment was considered by Best Buy to be an excuse given by TAIS for its inability to meet Best Buy’s 25 26 27 28 1 Best Buy has alleged that its claims relating to conduct occurring before October 8, 2006, are timely because defendants fraudulently concealed the alleged price-fixing conspiracy, and Best Buy did not discover and could not have discovered through the exercise of reasonable diligence the existence of the conspiracy until December 2006, when investigations by the DOJ and other antitrust regulators became public. 2 1 laptop demand. Best Buy asserts that the May 15, 2003 “panel cartel” comment was cut and pasted into 2 the two later documents, and that “[e]ach document is totally devoid of any facts whatsoever regarding 3 a purported cartel, as there are no references at all to any individuals, entities, places, events, documents, 4 dates and/or agreements.” Docket No. 6479 at 1:4-12. Best Buy also asserts that the record 5 demonstrates that its employees took various steps to investigate component shortages and supply chain 6 problems, and that those investigations revealed nothing. On this disputed record, the Court concludes 7 that summary judgment is not appropriate. Defendants separately move for summary judgment on Best Buy’s claims relating to conduct 9 after October 8, 2006, on the ground that Best Buy failed to mitigate its damages. Defendants advance 10 United States District Court For the Northern District of California 8 similar arguments and authority that the Court recently found unpersuasive in denying defendants’ 11 motion for partial summary judgment of Dell’s failure to mitigate damages. Docket No. 7276. For the 12 reasons set forth in that order, the Court declines to hold that defendants may assert mitigation as a 13 defense to Best Buy’s horizontal price-fixing claim. 14 15 II. Plaintiff’s motion for leave to amend the complaint 16 Plaintiff seeks to amend the complaint to add allegations relevant to equitable tolling of the 17 statute of limitations pursuant to American Pipe & Construction Company v. Utah, 414 U.S. 538 (1974), 18 and government action. See Am. Pipe, 414 U.S. at 554 (“[T]he commencement of a class action 19 suspends the applicable statute of limitations as to all asserted members of the class who would have 20 been parties had the suit been permitted to continue as a class action.”); 15 U.S.C. § 16(i) (“Whenever 21 any civil or criminal proceeding is instituted by the United States to prevent, restrain, or punish 22 violations of any of the antitrust laws, . . . the running of the statute of limitations . . . shall be suspended 23 during the pendency thereof and for one year thereafter.”). 24 Best Buy asserts that the current first amended complaint alleges facts demonstrating that Best 25 Buy was a member of the direct purchaser class and a class brought on behalf of indirect purchasers for 26 resale, and that the FAC discusses at great length the DOJ’s criminal investigation and proceedings. 27 Best Buy’s motion states that it previously thought the FAC’s allegations were sufficient to allege 28 equitable tolling of the statute of limitations, but that an order issued by this Court on September 26, 3 1 2012 “suggests that the Court requires more thorough explanations of each tolling theory in the 2 pleadings.” Docket No. 6924 at 3:12-14 (citing Order Granting in Part and Denying in Part Defendants’ 3 Joint Motion to Dismiss ViewSonic Complaint, Docket No. 6852). Federal Rule of Civil Procedure 15(a) provides that a party may amend their complaint once “as 5 a matter of course” before a responsive pleading is served, after that “a party may amend its pleading 6 only with the opposing party’s written consent or the court’s leave. The court should freely give leave 7 when justice so requires.” Fed. R. Civ. P. 15(a). “Four factors are commonly used to determine the 8 propriety of a motion for leave to amend. These are: bad faith, undue delay, prejudice to the opposing 9 party, and futility of amendment. These factors, however, are not of equal weight in that delay, by itself, 10 United States District Court For the Northern District of California 4 is insufficient to justify denial of leave to amend.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 11 (9th Cir. 1987). 12 Defendants do not contend that plaintiff has engaged in bad faith, that the proposed amendments 13 are futile, or that defendants will be prejudiced. Instead, defendants contend that plaintiff has unduly 14 delayed in seeking to amend the complaint, and that it is improper to amend the complaint at the 15 summary judgment stage. Defendants assert that Best Buy should have known that its tolling allegations 16 were inadequate when the Court issued orders in January and February of 2012 dismissing tolling 17 allegations in other cases in this MDL. See Docket Nos. 4706 (dismissing fraudulent concealment 18 allegations for failure to allege specific acts of concealment by each individual defendant); 4867 19 (dismissing equitable tolling allegations and stating “going forward, plaintiffs may not rely on 20 generalized allegations that they are entitled to tolling.”). The Court accepts Best Buy’s representation 21 that it was unaware of the potential need to amend its tolling allegations until the Court’s September 23, 22 2012 order in ViewSonic. In any event, under Ninth Circuit law, delay alone is an insufficient reason to 23 deny leave to amend. The Court finds that Best Buy has shown that amendment is proper under the Rule 24 15 factors, and accordingly, the Court GRANTS Best Buy’s motion. 25 26 CONCLUSION 27 For the reasons set forth above, defendants’ motion for partial summary judgment is DENIED 28 and plaintiff’s motion for leave to file a second amended complaint is GRANTED. Plaintiff shall file 4 1 a second amended complaint no later than December 14, 2012. 2 3 IT IS SO ORDERED. 4 5 Dated: December 10, 2012 SUSAN ILLSTON United States District Judge 6 7 8 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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