Office Depot, Inc. v. AU Optronics Corporation et al

Filing 181

ORDER DENYING PLAINTIFFS' MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS RE: DEFENDANTS' DOWNSTREAM PASS-ON AFFIRMATIVE DEFENSE re #172 .(Nos. 11-5765, 11-2225 and 11-3763) [MDL No.7593] (Illston, Susan) (Filed on 2/6/2013) Modified on 2/7/2013 (ysS, COURT STAFF).

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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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United States District Court
For the Northern District of California

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This Order Relates to:

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Tech Data Corp. and Tech Data Product
Management, Inc. v. AU Optronics Corp.,
et al., C 11-5765 SI

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No. M 07-1827 SI
MDL. No. 1827
ORDER DENYING PLAINTIFFS’
MOTION FOR PARTIAL JUDGMENT
ON THE PLEADINGS RE:
DEFENDANTS’ DOWNSTREAM PASSON AFFIRMATIVE DEFENSE

Office Depot, Inc. v. AU Optronics
Corp., et al., C 11-2225 SI
Interbond Corp. of America v. AU
Optronics Corp., et al., C 11-3763 SI
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Plaintiffs1 bring this motion for Partial Judgment on the Pleadings under Fed. R. Civ. P. 12(c)

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in Respect of Defendants’ Downstream Pass-on Affirmative Defense. The matter is scheduled for a

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hearing on February 8, 2013. Pursuant to Civil Local Rule 7–1(b), the Court determines that this matter

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is appropriate for resolution without oral argument, and VACATES the hearing. For the reasons set

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forth below, the Court hereby DENIES the motion. Master Docket Nos. 7086 and 7108.

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Plaintiffs purchased finished products containing TFT-LCD panels (“LCD products”) and resold

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those products to subsequent purchasers. Plaintiff Tech Data is a distributor which purchased LCD

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products indirectly and resold them to customers. Tech Data First Amended Complaint, ¶¶ 19-20.

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Plaintiffs Office Depot and BrandSmart allege purchases of LCD products both directly and indirectly,

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Plaintiffs Tech Data Corp. and Tech Data Product Management, Inc (“Tech Data”), No. C-115765 SI, filed this motion on November 2, 2012. See Docket No. 7086. On November 6, 2012,
plaintiffs Office Depot, Inc. (No. C-11-2225 SI) and Interbond Corp.of America (“Brandsmart”) (No.
C-11-3763 SI) filed joinders in Tech Data’s motion. Accordingly, this Order applies to all of them.

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and seek to recover damages for both types of purchases. Office Depot First Amended Complt, ¶ 19,

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BrandSmart First Amended Complt, ¶ 20. Plaintiffs assert state law indirect purchaser claims under the

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Florida Unfair and Deceptive Trade Practices Act (“FDUTPA”). In response, Defendants have asserted

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a downstream pass-on defense.
In this motion, Plaintiffs move for a partial judgment on the pleadings under Fed. R. Civ. P.

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12(c), seeking to dismiss Defendants’ downstream pass-on defense to the FDUTPA claim. Plaintiffs

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argue that the FDUTPA does not provide for a downstream pass-on defense, and that Florida case law

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measures damages under the FDUTPA solely at the time of the date of delivery and precludes

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consideration of any consequential effects of the violation in determining damages. Plaintiffs cite to a

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United States District Court
For the Northern District of California

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number of cases addressing how damages are measured, and argue that the case law is clear that the

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FDUTPA computes damages according to a “benefit of the bargain” analysis -- that is, the difference

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between the actual value of the product or service that was delivered without the violation and its value

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with the violation. As a result, Plaintiffs argue, Defendants’ downstream pass-on defense is precluded.

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Defendants argue that the plain text of the statute, requiring a plaintiff to prove it suffered a

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“loss” and allowing recovery only for its “actual damages,”does not preclude a downstream pass-on

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defense. Defendants assert that consideration of downstream pass-on relates directly to whether, and

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to what extent, plaintiffs suffered “loss” and “actual damages.” Opposition at 1. Defendants challenge

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the relevance of plaintiffs’ cited cases, which dealt with FDUTPA damages in defective goods cases,

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but assert that even considering damages in that context, evidence regarding downstream pass-on is

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relevant to a determination of whether plaintiffs received the value of the goods it purchased from

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suppliers. Defendants cite to In re Florida Cement and Concrete Antitrust Litig., 746 F.Supp.2d 1291,

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1330-22 (S.D. Fla. 2010) as the only reported case that directly considers the issue of pass-on in the

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context of a price-fixing claim brought under the FDUTPA. In Florida Cement, the court dismissed

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plaintiffs’ FDUTPA claim because plaintiffs had not sufficiently pled facts to allege they had suffered

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harm. The court noted plaintiffs’ failure to “allege sufficient information about what particular products

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were purchased from which Defendants, or whether the particular indirect purchasers absorbed the

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alleged price increases or passed them on to their customers.” 746 F.Supp.2d at 1322. Defendants

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contend this case establishes that information regarding the extent to which plaintiffs passed on or
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absorbed the overcharge is “essential to establish the loss and actual damages elements.” Opposition

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at 5.
The Court concludes that judgment on the pleadings under Fed. R. Civ. P. 12(c) is not proper

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in this instance. Accepting as true Defendants’ allegations of fact and construing these allegations in

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the light most favorable to Defendants, as this Court is required to do, the Court finds that Plaintiffs have

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not established, on the face of the pleadings, that no material issue of fact remains to be resolved, and

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that it is entitled to judgment as a matter of law. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896

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F.2d 1542, 1550 (9th Cir.1990); see also Gen. Conference Corp. of Seventh-Day Adventists v.

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Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir.1989) (“if the defendant

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United States District Court
For the Northern District of California

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raises an affirmative defense in his answer it will usually bar judgment on the pleadings”); Lee v. Port

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of Oakland, 2010 WL 3746451, at *1 (N.D. Cal. 2010) (finding that raising an affirmative defense in

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an answer will usually bar judgment on the pleadings (citing Seventh-Day Adventist, 887 F.2d 228 (9th

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Cir. 1989)). There is no clear Florida case law precluding the pass-on defense under the FDUTPA, and

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the applicability of the consequential damages/lost profits cases, in other contexts, is unclear. Florida

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courts have not addressed this issue or how “loss” or “actual damages” would be calculated in the

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context of price-fixing cases under the FDUTPA. Accordingly, the Court finds that plaintiffs are not

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entitled to judgment as a matter of law on the issue of downstream pass-on, and Plaintiff’s motion is

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DENIED. Docket Nos. 7086 and 7108.

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IT IS SO ORDERED.
Dated: February 6, 2013
SUSAN ILLSTON
United States District Judge

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