T-Mobile U.S.A., Inc. v AU Optronics Corporation, et al

Filing 60

Joinder to 59 MOTION to Dismiss Defendants' Joint Notice of Motion and Motion to Dismiss in Part Amended Complaint of T-Mobile by Sanyo Consumer Electronics Co., Ltd.. (Attachments: # 1 Proposed Order)(Davis, Allison) (Filed on 12/12/2011) Modified on 12/13/2011 (ysS, COURT STAFF). Modified on 12/13/2011 (ysS, COURT STAFF).

1 Allison A. Davis (CA State Bar No. 139203)
Sanjay Nangia (CA State Bar No. 264986)
2 DAVIS WRIGHT TREMAINE LLP
3 505 Montgomery Street, Suite 800
San Francisco, California 94111
[phone]
4 Telephone:
Facsimile:
[phone]
5 Email:
[e-mail]; [e-mail]

DAVIS WRIGHT TREMAINE LLP

6 Nick S. Verwolf (pro hac vice)
7 DAVIS WRIGHT TREMAINE LLP
777 – 108th Ave. N.E., Suite 2300
8 Bellevue, WA 98004
Telephone:
[phone]
9 Facsimile:
[phone]
Email:
[e-mail]
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11 Attorneys for SANYO Consumer Electronics Co., Ltd.
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IN THE UNITED STATES DISTRICT COURT

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THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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16 IN RE: TFT-LCD (FLAT PANEL) ANTITRUST
LITIGATION
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This Document Relates To:
Individual Case No. 3:11-CV-02591 SI
T-MOBILE U.S.A., INC.,
Plaintiff,

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v.

22 AU OPTRONICS CORPORATION; et al.,
Defendants.

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Master Docket No. 3:07-md-1827 SI
(Case No. 3:11-cv-02591 SI)
SANYO CONSUMER ELECTRONICS,
CO., LTD.’S JOINDER TO
DEFENDANTS’ JOINT NOTICE OF
MOTION AND MOTION TO DISMISS
T-MOBILE’S AMENDED
COMPLAINT
Date:
Time:
Courtroom:
Judge :

February 3, 2012
9:00 a.m.
10, 19th Floor
Hon. Susan Illston

SANYO Consumer Electronics Co., Ltd. (“SANYO Consumer Electronics”) respectfully

26 joins in Defendants’ Joint Notice of Motion and Motion to Dismiss Plaintiff T-Mobile U.S.A.,
27 Inc.’s (“T-Mobile”) Amended Complaint (“Complaint”) and additionally moves pursuant to
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18693648v1

SANYO CONSUMER ELECTRONICS’ JOINDER OF DEFENDANTS’ JOINT NOTICE OF MOTION AND
MOTION TO DISMISS T-MOBILE’S AMENDED COMPLAINT
Master File No. 3:07-md-1827 SI
Individual Case No. 3:11-cv-02591 SI

1 12(b)(6) of the Federal Rules of Civil Procedure (“FRCP”) for dismissal of T-Mobile’s claims
2 against SANYO Consumer Electronics for failure to state a claim upon which relief can be
3 granted.
4

I.

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THE COMPLAINT DOES NOT ALLEGE SUFFICIENT
ANTICOMPETITIVE CONDUCT BY SANYO CONSUMER
ELECTRONICS TO STATE A CLAIM

Under FRCP 12(b)(6), a district court must dismiss a complaint if it fails to state a claim

7 upon which relief can be granted. Defendant prevails on a motion if the plaintiff fails to allege
8 “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
9 550 U.S. 544, 570 (2007). The “facial plausibility” standard requires the plaintiff to allege facts

DAVIS WRIGHT TREMAINE LLP

10 that add up to “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v.
11 Iqbal, 129 S. Ct. 1937, 1949 (2009). A plaintiff must allege facts sufficient to “raise a right to
12 relief above the speculative level.” Twombly, 550 U.S. at 555; In re TFT-LCD Antitrust Litig.
13 (Costco), No. M 07-1827 SI, No. C 11-0058 SI, 2011 U.S. Dist. LEXIS 96741, at *8 (N.D. Cal.,
14 Aug. 29, 2011); In re TFT-LCD Antitrust Litig. (Nokia), No. M 07-1827 SI, No. C 09-5609 SI,
15 2010 U.S. Dist. LEXIS 64930, at *8-9 (N.D. Cal., 2010).
16

“[T]he tenet that a court must accept as true all of the allegations contained in a complaint

17 is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action,
18 supported by mere conclusory statements, do not suffice.” Iqbal, 129 S. Ct. at 1949 (citing
19 Twombly, 550 U.S. at 555). “[A] Section 1 claim ‘requires a complaint with enough factual matter
20 (taken as true) to suggest that an agreement was made.’” In re Transpacific Passenger Air
21 Transportation Antitrust Litigation, No. C 07-05634 CRB, 2011 U.S. Dist. LEXIS 49853 at *39
22 (N.D. Cal., May 9, 2011) (citing Twombly, 550 U.S. at 556).
23

Numerous cases make clear that a complaint must allege facts establishing each

24 defendant’s participation in the alleged conspiracy in order to satisfy Twombly. See, e.g. Total
25 Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F. 3d 430, 436 (6th Cir.
26 2008) (“Generic pleading, alleging misconduct against defendants without specifics as to the role
27 each played in the alleged conspiracy, was specifically rejected by Twombly.”); Lubic v. Fid. Nat.
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SANYO CONSUMER ELECTRONICS’ JOINDER OF DEFENDANTS’ JOINT NOTICE OF MOTION AND
MOTION TO DISMISS T-MOBILE’S AMENDED COMPLAINT
Master File No. 3:07-md-1827 SI
Individual Case No. 3:11-cv-02591 SI

1 Fin., Inc., No. C08-0401 MJP, 2009 U.S. Dist. LEXIS 62092, *15 (W.D. Wash. July 20, 2009)
2 *15 (“A complaint must allege that each individual defendant joined the conspiracy and played
3 some role in it because, at the heart of an antitrust conspiracy is an agreement and a conscious
4 decision by each defendant to join it.”) (citations omitted). T-Mobile’s allegations relating to
5 SANYO Consumer Electronics fail completely in this regard.
Twombly requires specific pleading of anticompetitive conduct because it recognizes that

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7 “proceeding to antitrust discovery can be expensive.” Twombly, 550 U.S. at 558. Only by
8 requiring “allegations that reach the level suggesting conspiracy” can the Court “hope to avoid the
9 potentially enormous expense of discovery in cases with no ‘reasonably founded hope that the

DAVIS WRIGHT TREMAINE LLP

10 [discovery] process will reveal relevant evidence.’” Id. at 559 (internal quotations omitted). The
11 Court in Twombly therefore was concerned about “sending the parties into discovery when there is
12 no reasonable likelihood that the plaintiffs can construct a claim from the events related in the
13 complaint.” Id. at 558 (internal quotations omitted).
The sparse allegations actually mentioning SANYO Consumer Electronics are contained in

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15 just a few paragraphs out of the nearly 300-paragraph Complaint. Compl. ¶¶ 70, 71, 107, 108,
16 125, 126, 159. None of these allegations pass muster under Twombly and Iqbal and none are
17 sufficient to support T-Mobile’s conclusion that SANYO Consumer Electronics was part of “the
18 Conspiracy.”
First, paragraph 70 merely alleges that SANYO Consumer Electronics is a Japanese

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20 company that previously operated as a subsidiary of SANYO Electric Co., Ltd. (“SANYO
21 Electric”) and sold and distributed LCD Products. Compl. ¶ 70.1
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T-Mobile alleges that SANYO Consumer Electronics and SANYO Electric were coconspirators. Compl. ¶ 71. But SANYO Consumer Electronics is not liable for the actions of its
affiliates. See, e.g., Gering v. Fraunhofer USA., Inc., No. 05-73458, 2009 WL 2877414, at *3-4
(E.D. Mich. Sept. 3, 2009) (attempts to hold a subsidiary liable for actions of a parent was a
“novel” legal theory for which the court found no support); Transition Healthcare Assocs., Inc. v.
Tri-State Health Investors, LLC, 306 F. App’x 273, 280 (6th Cir. 2009). And T-Mobile’s
conclusory statement that the parties were “closely affiliated, commonly owned, controlled and
dominated” and “functioned as a single enterprise and/or alter egos” is not sufficient to overcome
this. Compl. ¶ 71. See, e.g., Manila Indus. V. Ondova Ltd. Co., 334 Fed Appx. 821, 823 (9th Cir.
2009) (alter ego allegations deemed conclusory and claims dismissed); Nordberg v. Trilegiant
Corp., 445 F. Supp. 2d 1082, 1102-03 (N.D. Cal. 2006) (Patel, J.) (conclusory “alter ego claims”
support motion to dismiss), abrogated on other grounds by Odom v. Microsoft Corp., 486 F. 3d
541 (9th Cir. 2007); Katzir’s Floor & Home Design, Inc. v. M-MLS.com, 394 F. 3d 1143, 1149
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18693648v1

SANYO CONSUMER ELECTRONICS’ JOINDER OF DEFENDANTS’ JOINT NOTICE OF MOTION AND
MOTION TO DISMISS T-MOBILE’S AMENDED COMPLAINT
Master File No. 3:07-md-1827 SI
Individual Case No. 3:11-cv-02591 SI

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Paragraph 107 refers to hearsay testimony
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Compl. ¶ 107. Notably lacking from this allegation is any contention that

–a

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definition which includes five different entities under ¶ 69 – and SANYO Consumer Electronics
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took any action with regard to the alleged

. Nor is

DAVIS WRIGHT TREMAINE LLP

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there any allegation of what LCD panels were the subject

, or the purchaser or

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purchasers. The rest of the paragraph contains a conclusory statement that
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– nothing specific as to
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what the

contained. There is nothing else

in the

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paragraph. The allegation provides no information that would support a finding that the
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was unlawful or anticompetitive. The allegation is conclusory and wholly
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deficient.
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Paragraph 108 states that
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– an entity which is presumably distinct from SANYO Consumer Electronics and
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its alleged co-conspirator SANYO Electric:
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Compl. ¶ 108. There are no facts to indicate who, or what company or what the topic of the
was

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This paragraph could

also be interpreted as legitimate, legal conduct similar to attendance at industry trade shows

26 (9th Cir. 2004); Lubic v. Fid. Nat. Fin., Inc., No. C08-0401 MJP, 2009 U.S. Dist. LEXIS 62092, at
*15 (W.D. Wash. July 20, 2009); United States ex rel. Pilecki-Simko v. Chubb Inst., No. 06-3562,
27 2010 U.S. Dist. LEXIS 27187, at *42-43 (D.N.J. March 22, 2010); In re Welding Fume Prods.
Liab. Litig., No. 1:03-CV-17000, 2010 U.S. Dist. LEXIS 57859, at *47 (N.D. Ohio June 11,
28 2010).
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SANYO CONSUMER ELECTRONICS’ JOINDER OF DEFENDANTS’ JOINT NOTICE OF MOTION AND
MOTION TO DISMISS T-MOBILE’S AMENDED COMPLAINT
Master File No. 3:07-md-1827 SI
Individual Case No. 3:11-cv-02591 SI

1 because it merely alleges that
See In re Graphics Processing Units Antitrust Litig., 527 F. Supp.

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3 2d 1011, 1023 (N.D. Cal. 2007) (“[a]ttendance at industry trade shows and events is presumed
4 legitimate and is not a basis from which to infer a conspiracy, without more.”). This allegation is
5 insufficient.
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Paragraph 125, notably, is the only allegation that explicitly states that
. However, it fails due to its

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8 vague and conclusory nature:
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DAVIS WRIGHT TREMAINE LLP

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12 Compl. ¶ 125. This allegation states in conclusory fashion that
This is a legal conclusion clearly in violation of

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14 Iqbal. Moreover, there is no allegation of who these

were, and certainly no

15 suggestion that T-Mobile was one of them.
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Although this paragraph alleges that
it is in the context of

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. Courts, moreover, have recognized that this can be a legitimate, legal practice. In

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19 re Travel Agent Comm’n Antitrust Litig., MDL Docket No. 1561, 2007 U.S. Dist. LEXIS 79918,
20 at *35 (N.D. Ohio Oct. 29, 2007) (“[T]he exchange of price data and other information among
21 competitors does not invariably have anticompetitive effects; indeed such practices can in
22 certain circumstances increase economic efficiency and render markets more, rather than less,
23 competitive’’); In re Citric Acid Litig., 191 F.3d 1090, 1103 (9th Cir. 1999) (finding no evidence of
24 conspiracy despite competitor communications and meetings); Amey, Inc. v. Gulf Abstract & Title,
25 Inc., 758 F.2d 1486, 1505 (11th Cir. 1985) (finding that “there is nothing unlawful about
26 competitors meeting and exchanging price information”); Krehl v. Baskin-Robbins Ice Cream
27 Co., 664 F.2d 1348, 1357-58 (9th Cir. 1982) (finding that 12 communications over seven years
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concerning prices was “idle shop talk” and did not establish an unlawful conspiracy).
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SANYO CONSUMER ELECTRONICS’ JOINDER OF DEFENDANTS’ JOINT NOTICE OF MOTION AND
MOTION TO DISMISS T-MOBILE’S AMENDED COMPLAINT
Master File No. 3:07-md-1827 SI
Individual Case No. 3:11-cv-02591 SI

Finally, paragraph 126

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5 Compl. ¶ 126. Even setting aside the fact that
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, the allegation is insufficient. This paragraph provides no details

8 regarding what
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. It is clearly not sufficient to support any

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10 claim against SANYO Consumer Electronics, the defendant in this case.
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Paragraph 159 alleges

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. This paragraph then makes a cursory reference

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26 Compl. ¶ 159 (emphasis added). The allegation that

is an ambiguous

27 phrase, since there is clearly nothing anticompetitive about
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SANYO CONSUMER ELECTRONICS’ JOINDER OF DEFENDANTS’ JOINT NOTICE OF MOTION AND
MOTION TO DISMISS T-MOBILE’S AMENDED COMPLAINT
Master File No. 3:07-md-1827 SI
Individual Case No. 3:11-cv-02591 SI

1 Accordingly, the allegation does not support any claim of illegal activity by SANYO Consumer
2 Electronics, the named defendant.
3

On the whole, T-Mobile’s allegations against SANYO Consumer Electronics fail due to

4 their lack of specificity concerning SANYO Consumer Electronics’ alleged actions, the time,
5 place, and persons involved in the allegedly illicit “bilateral meetings” and nature of the
6 agreements with other competitors. Courts have routinely rejected these types of allegations. See,
7 e.g., In re Travel Agent Comm’n Antitrust Litig., 583 F. 3d 896, 905 (6th Cir. Ohio 2009)
8 (“[P]laintiffs use the word ‘agreement,’ . . .[which] is nothing more than a legal conclusion
9 ‘masquerading’ as a factual allegation.”); In re Hawaiian & Guamanian Cabotage Antitrust Litig.,

DAVIS WRIGHT TREMAINE LLP

10 647 F. Supp. 2d at 1256-1257 (recognizing that “a distinguishing factor” in an antitrust
11 complaint’s viability analyzed under Twombly “has been the inclusion of specific allegations
12 concerning time, place, and person versus general allusions to ‘secret meetings,’
13 ‘communications,’ or ‘agreements’”) (citations omitted); In re Elevator 502 F. 3d 47, 50-51 (2d
14 Cir. 2007) (concluding complaint was “nothing more than a list of theoretical possibilities, which
15 one could postulate without knowing any facts whatever” and that ‘“[s]uch conclusory allegations
16 of agreement at some unidentified point do[] not supply facts adequate to show illegality”’);
17 Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1048 (9th Cir. 2008) (an antitrust complaint must
18 “answer the basic questions: who, did what, to whom (or with whom), where, and when?”).
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Even considering the Complaint as a whole, T-Mobile’s allegations as to SANYO

20 Consumer Electronics must fail. Much of the Complaint is directed to defendants’ guilty pleas
21 and allegations of involvement in crystal meetings, “early conspiracy,” and trade associations. Id.
22 However, T-Mobile’s Complaint notably contains no allegations that SANYO Consumer
23 Electronics was part of the conspiracy’s “early years” (see Compl. ¶ 101), took part in the “crystal
24 meetings” (id. ¶¶ 113) or participated in any other meeting or gathering of the so-called
25 “conspirators.” Further, SANYO Consumer Electronics was never indicted and has never entered
26 into any plea agreement. Id. ¶¶ 174-190. SANYO Consumer Electronics, additionally, is not
27 specifically alleged to be a member of, or present as part of, the Japanese trade associations. Id. ¶
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231-244.
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18693648v1

SANYO CONSUMER ELECTRONICS’ JOINDER OF DEFENDANTS’ JOINT NOTICE OF MOTION AND
MOTION TO DISMISS T-MOBILE’S AMENDED COMPLAINT
Master File No. 3:07-md-1827 SI
Individual Case No. 3:11-cv-02591 SI

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CONCLUSION

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T-Mobile has not met its burden in providing specifics as to the role that SANYO

3 Consumer Electronics played in the alleged conspiracy. And because “proceeding to antitrust
4 discovery can be expensive,” granting SANYO Consumer Electronics’ motion here will serve the
5 policy goals behind Twombly. Twombly, 550 U.S. at 558. T-Mobile’s Complaint should be
6 dismissed.
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DATED: December 12, 2011
Respectfully submitted,

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DAVIS WRIGHT TREMAINE LLP

DAVIS WRIGHT TREMAINE LLP

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By:

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/s/ Allison A. Davis
Allison A. Davis

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Attorneys for SANYO Consumer Electronics Co., Ltd
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18693648v1

SANYO CONSUMER ELECTRONICS’ JOINDER OF DEFENDANTS’ JOINT NOTICE OF MOTION AND
MOTION TO DISMISS T-MOBILE’S AMENDED COMPLAINT
Master File No. 3:07-md-1827 SI
Individual Case No. 3:11-cv-02591 SI