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

Filing 72

RESPONSE (re 61 MOTION to Dismiss DEFENDANTS JOINT NOTICE OF MOTION AND MOTION TO DISMISS IN PART AMENDED COMPLAINT ) filed byT-Mobile USA Inc. (Taylor, Brooke) (Filed on 1/17/2012)

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David Orozco (CA Bar No. 220732)
SUSMAN GODFREY L.L.P.
1901 Avenue of the Stars, Ste. 950
Los Angeles, CA 90067-6029
Telephone: [phone]
Facsimile: [phone]
E-Mail:
[e-mail]

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Parker C. Folse (pro hac vice)
Brooke A. M. Taylor (pro hac vice)
SUSMAN GODFREY L.L.P.
1201 Third Ave, Suite 3800
Seattle, WA 98101
Telephone: [phone]
Facsimile: [phone]
E-Mail:
[e-mail]
[e-mail]

Edward A. Friedman (pro hac vice)
Daniel B. Rapport (pro hac vice)
Hallie B. Levin (pro hac vice)
Jason C. Rubinstein (pro hac vice)
FRIEDMAN KAPLAN SEILER &
ADELMAN LLP
7 Times Square
New York, NY 10036-6516
Telephone: [phone]
Facsimile: [phone]
E-Mail: [e-mail]
[e-mail]
[e-mail]
[e-mail]

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Counsel for T-Mobile U.S.A., Inc.
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA – SAN FRANCISCO DIVISION

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IN RE TFT-LCD (FLAT PANEL)
ANTITRUST LITIGATION
This Document Relates to
Case C 3:11-02591 SI
T-MOBILE U.S.A., INC.,
Plaintiff,

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

v.
AU OPTRONICS CORPORATION, et al.,

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Defendants.
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PLAINTIFF T-MOBILE U.S.A.,
INC.’S OPPOSITION TO
DEFENDANTS’ JOINT MOTION TO
DISMISS IN PART AMENDED
COMPLAINT
Date:
Time:
Location:

February 10, 2012
9:00 AM
Courtroom 10, 19th Floor
450 Golden Gate Ave.
San Francisco, CA 94102

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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TABLE OF CONTENTS

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Page(s)

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INTRODUCTION ...........................................................................................................................1
STATEMENT OF FACTS ..............................................................................................................3
ARGUMENT ...................................................................................................................................7

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T-MOBILE’S CLAIMS UNDER CALIFORNIA LAW ARE TIMELY............................7
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The Doctrine of Fraudulent Concealment Tolled T-Mobile’s Claims
Until December 11, 2006 .........................................................................................7
T-Mobile’s Claims Were Tolled During the Pendency of the Indirect
Purchasers’ Class Actions – from December 14, 2006 to November 5,
2007..........................................................................................................................9
T-Mobile’s California Claims Were Equitably Tolled Between the
Filing of the DPPs’ Consolidated Complaint on November 5, 2007 and the
Exclusion of Mobile Phone Purchasers from the DPP Class on March 28,
2010........................................................................................................................12
CONCLUSION ..............................................................................................................................16

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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TABLE OF AUTHORITIES

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Page(s)

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CASES

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American Pipe & Constr. Co. v. Utah,
414 U.S. 538 (1974) ......................................................................................................... Passim

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Bernson v. Browning-Ferris Indus.,
7 Cal. 4th 926 (Cal. 1994)..........................................................................................................7
Boilermakers Nat’l Annuity Trust Fund v. WaMu Mortg. Pass Through Certificates,
748 F. Supp. 2d 1246 (W.D. Wash. 2010)...............................................................................10
Clemens v. DaimlerChrysler Corp.,
534 F.3d 1017 (9th Cir. 2008) .................................................................................................13

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Collier v. City of Pasadena,
142 Cal. App. 3d 917 (Cal. Ct. App. 1983) .............................................................................14
Crown, Cork & Seal Co. v. Parker,
462 U.S. 345 (1983) ...................................................................................................................9
Griffin v. Singletary,
17 F.3d 356 (11th Cir. 1994) cert. denied 513 U.S. 1077 (1995) ............................................11

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Haas v. Pittsburgh Nat’l Bank,
526 F.2d 1083 (3d Cir. 1975)...................................................................................................11
Hatfield v. Halifax PLC,
564 F.3d 1177 (9th Cir. 2009) ...........................................................................................13, 14
Hunter v. Am. Gen. Life & Accident Ins. Co.,
384 F. Supp. 2d 888 (D.S.C. 2005)......................................................................................3, 12

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Maine State Ret. Sys. v. Countrywide Fin. Corp.,
722 F. Supp. 2d 1157 (C.D. Cal. 2010) .............................................................................10, 11
Mayes v. Leipziger,
729 F.2d 605 (9th Cir. 1984) ...................................................................................................14
Palmer v. Stassinos,
236 F.R.D. 460 (N.D. Cal. 2006) .............................................................................................10

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Smith v. Pennington,
352 F.3d 884 (4th Cir. 2003) .............................................................................................11, 12
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Master File No. C M:07-01827 SI
OPPOSITION TO DEFENDANTS’ JOINT MOTION
Individual Case No. C 3:11-02591 SI
TO DISMISS IN PART AMENDED COMPLAINT
MDL NO. 1827

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In re TFT-LCD (Flat Panel) Antitrust Litig.,
586 F. Supp. 2d 1109 (N.D. Cal. 2008) .....................................................................................8
In re Wells Fargo Mortg.-Backed Certificates Litig.,
No. 09–CV–01376–LHK, 2010 WL 4117477 (N.D. Cal. Oct. 19, 2010) ...............................10

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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Plaintiff T-Mobile U.S.A., Inc. (“T-Mobile”) respectfully submits this

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memorandum of law in opposition to Defendants’ Joint Motion to Dismiss in Part T-Mobile’s

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Amended Complaint.

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INTRODUCTION

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Defendants assert two arguments in support of their joint motion to dismiss

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T-Mobile’s claims under California’s Cartwright Act and Unfair Competition Law. 1 First,

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Defendants argue that, as a matter of Due Process and in accordance with this Court’s rulings,

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T-Mobile cannot assert California state law claims for its purchase of price-fixed LCD products

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absent a showing that it made such purchases within California. T-Mobile acknowledges the

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Court’s prior rulings on this question. It further recognizes that, in light of these rulings, the

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Court might be inclined to rule that T-Mobile cannot avail itself of the protections of California’s

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antitrust and unfair competition laws. But given T-Mobile’s significant presence in California,

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and its allegations that Defendants are subject to personal jurisdiction in California, maintained

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offices in California, transacted business in California, and, by their own admission, committed

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acts in furtherance of their price-fixing conspiracy within California, T-Mobile believes that

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reconsideration of the Court’s previous rulings would be warranted here. In any event, T-Mobile

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has asserted claims against Defendants under the Cartwright Act and California Unfair

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Competition Law to preserve its right to pursue such claims in the event that the governing law

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concerning its standing to do so changes during the pendency of this action, including as a result

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Defendants also move to dismiss T-Mobile’s (i) Sherman Act claims to the extent they are based on the indirect
purchase of LCD products, and (ii) New York Donnelly Act claims for indirect purchases made prior to December
23, 1998. (See Defendants’ Memorandum of Points and Authorities in Support of Defendants’ Joint Motion to
Dismiss in Part T-Mobile’s Amended Complaint (“Defs. Br.”) at 1, 8-10.) As Defendants implicitly acknowledge
(see Defs. Br. at 8-9), T-Mobile has alleged that it purchased cellular phones containing LCD screens directly from
Defendants, and it is asserting damages claims under the Sherman Act solely with respect to such direct purchases.
(See Amended Complaint for Damages and Injunctive Relief, T-Mobile U.S.A., Inc. v. AU Optronics Corp., et al.,
Individual Case No. C 3:11-02591 SI (“Amended Complaint” or “Am. Cpl.”) ¶¶ 253-56, 280-86.) Further,
T-Mobile does not seek relief under New York’s Donnelly Act for indirect purchases made before the effective date
of New York’s Illinois Brick repealer amendment, December 23, 1998. Accordingly, Defendants’ arguments
relating to T-Mobile’s standing to assert Sherman Act or Donnelly Act claims are moot.

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Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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of the AT&T Mobility plaintiffs’ appeal of this Court’s rulings on this question to the U.S. Court

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of Appeals for the Ninth Circuit.

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Second, Defendants assert that T-Mobile’s claims under the Cartwright Act, and

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the California Unfair Competition Law are untimely because (a) T-Mobile filed its complaint on

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April 18, 2011, more than four years after the United States government publicly disclosed the

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existence of the LCD conspiracy on December 11, 2006, and (b) T-Mobile’s claims were not

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tolled by the pendency of either the direct or indirect class actions. As a preliminary matter, this

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Court need not reach these arguments if it dismisses the claims for lack of standing. However, if

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the Court were inclined to address these arguments, it should reject them because T-Mobile’s

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claims under California law are in fact timely.

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Indeed, only one year and 24 days had run on the four-year statute of limitations

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governing T-Mobile’s Cartwright Act and Unfair Competition Law claims when it filed its

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original complaint on April 18, 2011. For starters, as a result of Defendants’ fraudulent

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concealment of their price-fixing conspiracy, the statute of limitations governing T-Mobile’s

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California claims did not begin running until December 11, 2006, when the conspiracy was first

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disclosed.

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After the December 11 disclosure, only three days ran on the statute of limitations

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before T-Mobile’s claims were tolled again, from December 14, 2006 to November 5, 2007. See

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American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554 (1974) (“[T]he rule most consistent

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with federal class action procedure must be that the commencement of a class action suspends

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the applicable statute of limitations as to all asserted members of the class . . . .”). During this

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period, T-Mobile was a class member in three indirect purchaser class actions, filed in December

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2006, February 2007, and March 2007. Each of those class actions asserted claims under

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California law, including with respect to mobile phones purchased for resale. Although the class

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definitions of the indirect purchaser actions were later narrowed to exclude T-Mobile’s claims,

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there is no authority to suggest that this had the effect of stripping T-Mobile of the benefits of

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MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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American Pipe tolling for the 10 months and 22 days in which it was a member of the class.

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Even the decisional authority cited by Defendants in related cases does not support such a harsh

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result. See, e.g., Hunter v. Am. Gen. Life & Accident Ins. Co., 384 F. Supp. 2d 888, 894 (D.S.C.

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2005) (“[T]he carved out putative class members retain the right to rely on American Pipe tolling

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if they file individual actions.”) (emphasis added). If no additional tolling applied after

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November 5, 2007, only three years, five months, and 16 days would have run on the statute of

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limitations governing T-Mobile’s California claims when it filed its complaint on April 18, 2011.

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Finally, even though additional tolling is not required for T-Mobile’s claims to be

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timely, the applicable statute of limitations was further tolled from November 5, 2007 to March

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28, 2010, the day T-Mobile, as a purchaser of cellular phones, was excluded from the Direct

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Purchaser Plaintiff (“DPP”) class action. For the intervening two years, four months, and 23

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days, T-Mobile, as a purchaser of cellular phones, was a member of that class, and the filing of

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the DPP class action equitably tolled the statute of limitations governing T-Mobile’s California

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law claims.

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In sum, the statute of limitations on T-Mobile’s California claims was tolled for

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three years, three months, and 14 days out of the four years, four months, and seven days

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between the disclosure of Defendants’ conspiracy and the filing of T-Mobile’s original

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complaint. Defendants’ motion to dismiss T-Mobile’s California claims as untimely should

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therefore be denied. 2

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STATEMENT OF FACTS

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On December 11, 2006, the United States Department of Justice (“DOJ”)
announced that it had launched an investigation into anti-competitive activity among

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In addition to asserting indirect purchaser claims under California’s Cartwright Act and Unfair Competition Law,
T-Mobile also asserts claims under New York’s Donnelly Act. (Am. Cpl. ¶ 299.) Although Defendants argue that
T-Mobile’s Donnelly Act claims for indirect purchases made before December 23, 1998 should be dismissed on
standing grounds (see Defs. Br. at 1, 9-10), Defendants do not contend that those claims are untimely, and they
would have no basis to do so. As with T-Mobile’s claims under California law, Defendants’ fraudulent concealment
of the price-fixing conspiracy and the pendency of certain indirect and direct purchaser class actions operated to toll
the statute of limitations governing T-Mobile’s Donnelly Act claims.

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Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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manufacturers of LCD panels. (See Am. Cpl. ¶¶ 174-75.) Until that disclosure, T-Mobile had

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neither actual nor constructive knowledge of the facts supporting its claims in this action. (Id.

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¶ 260.)

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Three days later, on December 14, 2006, a class action complaint was filed

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against the Defendants asserting indirect purchaser claims on behalf of “[a]ll persons within the

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United States who indirectly purchased LCD products, either as stand alone devices or pre-

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installed in other consumer electronic products.” (Class Action Complaint, Audio Video Artistry

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v. Samsung Elecs. Co. Ltd., et al., Case No. 2:06-cv-02848 (W.D. Tenn.), Dkt. No. 1 (“AVA

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Cpl.”), ¶ 19.) The class definition did not exclude businesses that purchased LCD products for

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resale. Further, Audio Video Artistry asserted claims under both California and New York law.

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(See id. ¶¶ 80 (alleging violations of California’s Cartwright Act and Unfair Competition Act);

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90 (alleging violations of New York’s Donnelly Act).) The complaint also made clear that “[t]he

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LCD products at issue in this litigation are used in a broad range of consumer electronic products

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that are available either as stand alone products . . . or as significant component parts of

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consumer electronic devices, such as mobile phone . . . screens . . . .” (Id. ¶ 38 (emphasis

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added).)

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On February 16, 2007, yet another class action, Jafarian v. LG Philips LCD Co.

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Ltd., et al., was filed against the Defendants that included T-Mobile as a class member and

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asserted the same state law claims T-Mobile asserts herein. The Jafarian class encompassed

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“[a]ll persons and entities throughout the United States . . . who indirectly purchased products

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that contain TFT-LCDs manufactured by any Defendant . . . . includ[ing] . . . businesses who

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have purchased TFT-LCDs and/or products containing TFT-LCDs,” and did not exclude

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businesses that purchased LCD products for resale. (Class Action Complaint, Jafarian v. LG

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Philips LCD Co. Ltd., et al. Case No. 3:07-cv-00994-SI (N.D. Cal.), Dkt. No. 1 (“Jafarian

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Cpl.”), ¶ 19.) Moreover, the Jafarian complaint defined “TFT-LCD products” to include cell

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phones (id. ¶ 2), and asserted claims under both California and New York law. (See id. ¶¶ 52

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MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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(alleging violations of California’s Cartwright Act and New York’s Donnelly Act); 56 (alleging

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violations of California’s Unfair Competition Act).)

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On March 9, 2007, a third class action, Minoli, et al. v. LG Philips LCD Co., Ltd.,

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et al., was filed against the Defendants that included T-Mobile in its class definition and pleaded

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claims under California and New York law encompassing the indirect purchase of cellular

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phones, including for purposes of resale. (Class Action Complaint, Minoli, et al. v. LG Philips

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LCD Co., Ltd., et al., Case No. 6:07-cv-00235-MV-WDS (D.N.M.), Dkt. No. 1 (“Minoli Cpl.”).)

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Specifically, the Minoli class included “[a]ll persons within the United States who indirectly

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purchased LCD products, either as stand alone devices or pre-installed in other consumer

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electronic products, which were manufactured, marketed and sold by Defendants . . . .” (Id.

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¶ 39.) As with Audio Video Artistry and Jafarian, the Minoli class did not exclude businesses

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that purchased LCD products for resale. It also asserted claims under both California and New

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York law. (See id. ¶¶ 99 (alleging violations of California’s Cartwright Act and Unfair

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Competition Act); 109 (alleging violations of New York’s Donnelly Act.) Finally, like Audio

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Video Artistry and Jafarian, Minoli asserted claims concerning the price-fixing of LCD screens

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incorporated into mobile phones. (See id. ¶ 58.)

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On November 5, 2007 (10 months, 22 days after the filing of Audio Video

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Artistry), the Indirect Purchaser Plaintiffs’ (“IPP”) Consolidated Amended Complaint was filed.

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That complaint excluded T-Mobile from its operative class definition. (Dkt. No. 367.) 3 But on

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the same day, the DPPs filed their Consolidated Complaint. (Dkt. No. 366.) Although the

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DPPs’ Consolidated Complaint did not allege claims under state law, that complaint included

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T-Mobile in its class definition. Moreover, the DPPs based their federal claims on substantially

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the same allegations of wrongdoing as T-Mobile now bases its claims under California and New

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York law. Specifically, the DPPs asserted direct purchaser claims on behalf of “all persons and

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Unless otherwise noted, all “Dkt. No.” references concern filings made in In re TFT-LCD (Flat Panel) Antitrust
Litig., MDL No. 1827, Master File No. C M:07-01827 SI.

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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entities who directly purchased a Thin Film Transistor Liquid Crystal Display (“TFT-LCD”)

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panel, or a product containing a TFT-LCD panel . . . .” (Dkt. No. 366 ¶¶ 1, 68.) The DPPs

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further alleged, “TFT-LCDs are used in a number of products, including but not limited to . . .

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cellular telephones. As used herein, ‘TFT-LCD Product’ refers to TFT-LCD panels, and

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products containing TFT-LCD panels . . . .” (Id. ¶ 1 (emphasis added).)

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The First Amended DPPs’ Consolidated Complaint, dated December 5, 2008, and

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the Second Amended DPPs’ Consolidated Complaint, dated March 3, 2009, included the same

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definitions. (See Dkt. No. 748 ¶¶ 1 & 66; Dkt. No. 874 ¶¶ 1 & 67.) As a direct purchaser of

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cellular phones (see, e.g., Am. Cpl. ¶¶ 254-56), T-Mobile was a member of this class until March

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28, 2010 – i.e., for two years, four months, and 23 days. On that date, this Court excluded

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purchasers of cellular phones from the DPP class, defining the class to include only “persons and

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entities who . . . directly purchased a television, computer monitor, or notebook computer

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containing a TFT-LCD panel, from any defendant or any subsidiary thereof . . . .” (Dkt. No.

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1641 at 34.)

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T-Mobile filed its original Complaint in the United States District Court for the

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Western District of Washington on April 18, 2011 (four years, four months, and seven days after

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the disclosure of Defendants’ conspiracy). On November 7, 2011, after this action was

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transferred here for purposes of coordination of pre-trial proceedings (see Conditional Transfer

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Order, Case No. 3:11-cv-02591, Dkt. No. 15 (May 18, 2011)), T-Mobile filed its Amended

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Complaint in this Court. In its Amended Complaint, T-Mobile alleges that it purchased mobile

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wireless handsets containing LCD panels directly from Defendants. It further alleges that, as a

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result of Defendants’ conspiracy to fix the price of LCD Panels, T-Mobile purchased those

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handsets at artificially-inflated prices. (Am. Cpl. ¶¶ 254-256.) T-Mobile asserts claims under

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the Sherman Act and Clayton Act related to such direct purchases of LCD products. (Id. ¶¶ 282-

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86.) In addition, T-Mobile alleges that it purchased mobile wireless handsets containing LCD

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panels from other handset original equipment manufacturers (“OEM”) that, in turn, purchased

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MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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LCD panels and products directly from Defendants. T-Mobile alleges that it was injured as a

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result of the handset OEMs passing on to it the overcharges caused by Defendants’ conspiracy

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(id. ¶¶ 257-58), and asserts claims in respect of its indirect purchases under both California’s

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Cartwright Act and Unfair Competition Law, as well as New York’s Donnelly Act. (Id. ¶¶ 287-

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299.)

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ARGUMENT

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T-MOBILE’S CLAIMS UNDER CALIFORNIA LAW ARE TIMELY

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Defendants argue that T-Mobile filed its Cartwright Act and California Unfair

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Competition Law claims after the applicable four-year statute of limitations for each claim

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expired, and that no grounds exist upon which T-Mobile’s claims can be tolled. (Defs. Br. at 4-

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6.) Defendants are incorrect. Defendants’ fraudulent concealment of the LCD Conspiracy, the

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pendency of class actions that explicitly included T-Mobile’s claims, and the doctrine of

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equitable tolling stopped the running of the statute of limitations on T-Mobile’s California law

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claims for all but three days between December 11, 2006 and March 28, 2010.

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A.

The Doctrine of Fraudulent Concealment Tolled T-Mobile’s Claims
Until December 11, 2006
Defendants argue that the “fraudulent concealment doctrine cannot salvage”

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T-Mobile’s California law claims because “the alleged conspiracy became public knowledge” in

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December 2006. (Defs. Br. at 5.) But Defendants cannot legitimately dispute that, under the

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fraudulent concealment doctrine, the statute of limitations on those claims did not start to run

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until December 11, 2006.

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As a matter of law, the doctrine of fraudulent concealment tolls claims asserted

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against the Defendants under the Cartwright Act and the California Unfair Competition Law.

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See Bernson v. Browning-Ferris Indus., 7 Cal. 4th 926, 931, 931 n.3 (Cal. 1994) (stating that

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“[i]t has long been established that the defendant’s fraud in concealing a cause of action against

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him tolls the applicable statute of limitations” and that “[t]he rule of fraudulent concealment is

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MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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applicable whenever the defendant intentionally prevents the plaintiff from instituting suit; the

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rule applies whether or not the action itself is based on fraud.”) (citations and internal

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punctuation omitted).

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Moreover, this Court has ruled that the LCD class action plaintiffs’ allegations of

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fraudulent concealment were sufficient to toll the plaintiffs’ claims until the conspiracy was

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publicly disclosed in December 2006. See In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F.

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Supp. 2d 1109 (N.D. Cal. 2008). Specifically, this Court has stated:

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[P]laintiffs have sufficiently alleged fraudulent concealment such
that, as a pleading matter, the Court will not dismiss any claims as
time-barred. As with the direct purchaser plaintiffs’ consolidated
complaint, the indirect purchaser plaintiffs’ complaint alleges that
defendants concealed their price-fixing conspiracy through secret
discussions about price and output, an agreement not to discuss
publicly the nature of their price-fixing agreement, and numerous
pretextual and false justifications disseminated to consumers
regarding defendants price increases.

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Id. at 1132. See also id. at 1119-20 (fraudulent concealment sufficiently alleged where DPPs

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pleaded “specific pretextual reasons for the inflated prices of LCDs,” that they were “unaware of

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their claims and discovered them as a result of investigations by the DOJ and other antitrust

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regulators in December 2006,” “that [d]efendants engaged in a secret conspiracy that did not

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give rise to facts that would put plaintiffs . . . on inquiry notice,” “that defendants agreed not to

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publicly discuss the nature of the scheme,” and that plaintiffs therefore “could not have

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discovered through the exercise of reasonable diligence the alleged conspiracy”) (internal

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punctuation omitted); id. at 1120 (“It is generally inappropriate to resolve the fact-intensive

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allegations of fraudulent concealment at the motion to dismiss stage.”) (citations and internal

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punctuation omitted).

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T-Mobile has made precisely the same allegations of fraudulent concealment that

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this Court found sufficient when analyzing the DPPs and IPPs’ complaints. (See, e.g., Am. Cpl.

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MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

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¶¶ 260-279.) Accordingly, the doctrine of fraudulent concealment tolled T-Mobile’s California

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claims until December 11, 2006.

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B.

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T-Mobile’s Claims Were Tolled During the Pendency of the Indirect
Purchasers’ Class Actions – from December 14, 2006 to November 5, 2007

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Defendants next argue that T-Mobile’s state law claims were not included in the

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prior class actions and therefore could not be tolled. (See Defs. Br. at 5.) Defendants’ assertion

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is not correct. Just days after the fraudulent concealment tolling ended on December 11, 2006,

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several class action complaints were filed against the Defendants. At least one of those

9

complaints, in Audio Video Artistry (filed on December 14, 2006), included T-Mobile as a class

10

member. It also asserted the very state-law antitrust claims with respect to the same LCD

11

products (mobile phones) as T-Mobile has asserted here, thereby tolling the statute of limitations

12

once again. See American Pipe, 414 U.S. at 554 (“[T]he commencement of a class action

13

suspends the applicable statute of limitations as to all asserted members of the class who would

14

have been parties had the suit been permitted to continue as a class action.”); see also Crown,

15

Cork & Seal Co. v. Parker, 462 U.S. 345, 353-54 (1983) (“We conclude, as did the Court in

16

American Pipe, that the commencement of a class action suspends the applicable statute of

17

limitations as to all asserted members of the class who would have been parties had the suit been

18

permitted to continue as a class action.”) (citations and internal punctuation omitted; emphasis

19

added).

20

Defendants insist that T-Mobile cannot invoke the class tolling doctrine for its

21

indirect purchaser claims because the “indirect purchaser class action was brought only on behalf

22

of those who made indirect purchases of televisions, computer monitors, and laptop computers

23

for their ‘own use and not for resale.’” (Defs. Br. at 5.) Defendants fail to acknowledge the

24

filing of the Audio Video Artistry, Jafarian, and Minoli complaints, which asserted claims on

25

behalf of indirect purchasers who purchased mobile handsets for resale.

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

1

Specifically, on December 14, 2006, a class action complaint was filed in Audio

2

Video Artistry on behalf of a class of indirect purchasers of “LCD products, either as stand alone

3

devices or pre-installed in other consumer electronic products.” (AVA Cpl. ¶ 19.) That class

4

action defined “LCD products” to encompass mobile phones with LCD screens, included as class

5

members businesses that resold LCD products, and asserted claims under California and New

6

York law. (Id. ¶¶ 19, 38, 80, 90.) Likewise, Jafarian, filed on February 16, 2007, and Minoli,

7

filed on March 9, 2007, asserted claims on behalf of indirect purchasers of LCD products,

8

including cellular phones, without regard to whether those purchasers resold such products.

9

(Jafarian Cpl. ¶¶ 2, 19; Minoli Cpl. ¶¶ 39, 58.) And Jafarian and Minoli also asserted California

10

and New York claims in respect of such indirect purchases. (Jafarian Cpl. ¶¶ 52-53, 56; Minoli

11

Cpl. ¶¶ 99, 109.) In short, as an indirect purchaser of mobile phones for resale, T-Mobile

12

unquestionably was a member of the Audio Video Artistry, Jafarian, and Minoli classes, which

13

asserted the same California and New York claims that Defendants now attack as time-barred.

14

In related cases, Defendants have argued that the filing of Audio Video Artistry

15

did not toll the statute of limitations governing individual, direct action plaintiffs’ California law

16

claims because the lead plaintiff in that class action lacked standing to assert such claims. (Dkt.

17

No. 4410 at 4.) The cases Defendants cited for this proposition are uniformly inapposite. All

18

address circumstances in which a plaintiff class – as opposed to an individual plaintiff –

19

attempted to avail itself of American Pipe tolling after the lead plaintiff was deemed to lack

20

standing to assert certain claims on behalf of the class. 4 Defendants’ reliance on this line of

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22
23
24
25
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4

See In re Wells Fargo Mortg.-Backed Certificates Litig., No. 09–CV–01376–LHK, 2010 WL 4117477, at *2, *5,
*9 (N.D. Cal. Oct. 19, 2010) (ruling that class tolling was unavailable where plaintiffs amended their pleadings to
add plaintiffs who met standing requirements, but recognizing the possibility that former class members might
receive the benefit of tolling by proceeding as individual plaintiffs); Maine State Ret. Sys. v. Countrywide Fin.
Corp., 722 F. Supp. 2d 1157, 1161, 1166-67 (C.D. Cal. 2010) (initial class action did not toll subsequent class action
where lead plaintiffs in original suit lacked standing); Boilermakers Nat’l Annuity Trust Fund v. WaMu Mortg. Pass
Through Certificates, 748 F. Supp. 2d 1246, 1250, 1258-59 (W.D. Wash. 2010) (same); Palmer v. Stassinos, 236
F.R.D. 460, 463-66 (N.D. Cal. 2006) (lead plaintiffs not entitled to benefit of American Pipe tolling where they
sought to amend class action complaint to add additional class representatives with standing to assert time-barred
claims).

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

1

authority ignores a well entrenched distinction between individual plaintiffs and plaintiff classes

2

with respect to American Pipe tolling. Courts have recognized that “extending American Pipe

3

tolling to class action claims the original named plaintiffs had no standing to bring will

4

encourage filings made merely to extend the period in which to find a class representative.”

5

Countrywide, 722 F. Supp. 2d at 1167. No such concerns are implicated in cases – such as this

6

one – where an individual plaintiff asserts otherwise time-barred claims after being judicially

7

ejected from a class or opting out.

8
9

Indeed, the weight of authority supports T-Mobile’s position that the narrowing of
the indirect purchaser class definition after the filing of Audio Video Artistry, Jafarian, and

10

Minoli does not operate to retroactively deny T-Mobile the benefits of American Pipe tolling for

11

the period when it was still a member of these indirect purchaser classes. 5 See, e.g., Smith v.

12

Pennington, 352 F.3d 884, 888, 891, 893 (4th Cir. 2003) (“We . . . see no reason in this case to

13

say that [lead plaintiff’s] lack of a viable federal claim [due to lack of standing] prevents . . .

14

members of his asserted class, . . . who might have viable individual claims, from obtaining the

15

benefit of tolling.”) (emphasis added); Griffin v. Singletary, 17 F.3d 356, 357, 360 (11th Cir.

16

1994) (holding that class action tolled claims of individual plaintiffs where class representatives

17

lacked standing, and recognizing that “putative class members should be entitled to rely on a

18

class action as long as it is pending”), cert. denied 513 U.S. 1077 (1995); see also Haas v.

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Pittsburgh Nat’l Bank, 526 F.2d 1083, 1097-98 (3d Cir. 1975) (where original class

20

representative lacked standing, class action tolled the statute of limitations as to all members of

21

putative class, and amendment of the complaint by the addition of a new class representative

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24
5

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Any other rule would make nonsense out of American Pipe because American Pipe issues generally
arise when a plaintiff was previously part of a class action and later ceases to be a member of the class. In
other words, eliminating American Pipe tolling for the period in which the individual plaintiff was a
member of the class, simply because the plaintiff is no longer a member of the class, would eviscerate
American Pipe.

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

1

with standing related back to the filing of the initial complaint). 6 For these reasons, T-Mobile’s

2

California claims were tolled under American Pipe for the ten month, 22 day period between

3

December 14, 2006 and November 5, 2007.

4

C.

5
6

T-Mobile’s California Claims Were Equitably Tolled Between the Filing of
the DPPs’ Consolidated Complaint on November 5, 2007 and the Exclusion
of Mobile Phone Purchasers from the DPP Class on March 28, 2010
Finally, the four-year statute of limitations on T-Mobile’s California law claims

7

was further tolled by the separate DPP class action, of which T-Mobile was initially a class

8

member. Although the IPP class definition was narrowed to exclude T-Mobile’s claims on

9

November 5, 2007, the DPPs filed their Consolidated Complaint on the same day, asserting

10

direct purchaser claims on behalf of “all persons and entities who directly purchased a Thin Film

11

Transistor Liquid Crystal Display (“TFT-LCD”) panel, or a product containing a TFT-LCD

12

panel . . . .” (Dkt. No. 366 ¶¶ 1, 68.) The DPPs’ Consolidated Complaint further alleged, “TFT-

13

LCDs are used in a number of products, including but not limited to . . . cellular telephones. As

14

used herein, ‘TFT-LCD Product’ refers to TFT-LCD panels, and products containing TFT-LCD

15

panels . . . .” (Id. ¶ 1.) The First Amended DPPs’ Consolidated Complaint, dated December 5,

16

2008, and the Second Amended DPPs’ Consolidated Complaint, dated March 3, 2009, included

17

the same definitions. (See Dkt. No. 748 ¶¶ 1 & 66; Dkt. No. 874 ¶¶ 1 & 67.) As a direct

18

purchaser of cellular phones (see, e.g., Am. Cpl. ¶¶ 254-56), T-Mobile was unquestionably a

19

member of this class until March 28, 2010. On that date, the Court excluded purchasers of

20
6

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Defendants’ reliance elsewhere (see, e.g., Dkt. No. 3949 at 8 n.3) on Hunter v. Am. Gen. Life &
Accident Ins. Co., 384 F. Supp. 2d 888 (D.S.C. 2005), and Smith, 352 F.3d 884, is also misplaced.
Hunter ruled that American Pipe tolling does not apply when a class plaintiff seeks tolling based on the
voluntary narrowing of the class definition in the earlier class action (a rule designed to curb abuse by
class action attorneys). See id. at 892. But the court there specifically stated that “the carved out putative
class members retain the right to rely on American Pipe tolling if they file individual actions.” Id. at 894
(emphasis added). That is the exact basis upon which T-Mobile, an individual plaintiff excluded from the
IPP class, is entitled to American Pipe tolling here. Similarly, Smith clarified the circumstances in which
extrinsic “evidence outside of the complaint can be used to construe a definition of a plaintiff’s asserted
class that is more narrow than what the complaint alone would dictate for the purposes of determining a
party’s entitlement to tolling.” 352 F.3d at 891. Here, there is no question that the class action
complaints in Audio Video Artistry, Jafarian, and Minoli encompassed T-Mobile’s California law claims.

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

1

cellular phones from the DPP class, defining the class to include only “persons and entities who

2

. . . directly purchased a television, computer monitor, or notebook computer containing a TFT-

3

LCD panel, from any defendant or any subsidiary thereof . . . .” (Dkt. No. 1641 at 34.)

4

Without citation to any apposite authority, Defendants state in conclusory fashion

5

that T-Mobile’s California claims could not have been tolled by the DPP class action because it

6

did not “include a claim under the Cartwright Act or Unfair Competition Act.” (Defs. Br. at 5.)

7

But as Defendants have conceded elsewhere, “whether the statute of limitations for a state law

8

claim is . . . tolled by the filing of a class action is . . . controlled by state law” (see, e.g., Dkt. No.

9

3949 at 7), and California courts have expressly recognized that the filing of a class action

10

equitably tolls California state law claims. See, e.g., Hatfield v. Halifax PLC, 564 F.3d 1177,

11

1184-85 (9th Cir. 2009) (“[Plaintiff’s] individual claims were equitably tolled by the timely

12

filing of her nearly identical class action in New Jersey state court. Equitable tolling under

13

California law is a judicially created doctrine that operates to suspend or extend a statute of

14

limitations in order to ensure that a limitations period is not used to bar a claim unfairly.”). 7

15

Under California law, T-Mobile’s membership in the DPP class, which asserted federal claims

16

predicated on substantially the same allegations of wrongdoing as T-Mobile now bases its claims

17

under California law, equitably tolled the statute of limitations controlling those state law claims.

18

The Court in Hatfield considered three factors when determining whether to apply

19

equitable tolling based on the pendency of a class action complaint: (1) timely notice to the

20

defendant by the filing of the first claim; (2) lack of prejudice to the defendant in gathering

21

evidence to defend against the second claim; and (3) good faith and reasonable conduct by the

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26

7

In related cases, Defendants have cited Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir.
2008), for the proposition that California courts have declined to adopt a cross-jurisdictional tolling rule,
pursuant to which a class action in one jurisdiction would toll claims later filed in another. (See, e.g., Dkt.
No. 3949 at 7.) But as the Ninth Circuit made clear in Hatfield, “Clemens, which only rejected the
application of American Pipe tolling in a cross-jurisdictional action, does not affect the application of
California’s equitable tolling doctrine, which covers situations beyond those covered by American Pipe.”
564 F.3d at 1188.

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

1

plaintiff in filing the second claim. Id. at 1185 (citing Collier v. City of Pasadena, 142 Cal. App.

2

3d 917 (Cal. Ct. App. 1983), and Mayes v. Leipziger, 729 F.2d 605, 608 (9th Cir. 1984)).

3
4

Each of these factors favors the application of equitable tolling to T-Mobile’s
California claims based on the pendency of the DPPs’ class action complaint:
•

5
6
7

•

8
9
10

•

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12

The Defendants were timely notified of T-Mobile’s California law claims by
the (i) filing of indirect purchaser class actions asserting precisely the same
claims mere days after Defendants’ conspiracy was disclosed, and (ii) the
filing of the DPPs’ Consolidated Complaint, which asserted federal claims
arising from the same misconduct as T-Mobile’s state law claims;
The Defendants will suffer no prejudice in gathering evidence to defend
against T-Mobile’s state law claims, because the Defendants had been subject
to substantially similar lawsuits for over a year before T-Mobile filed its
complaint, and those lawsuits required Defendants to gather much of the
evidence relevant to T-Mobile’s claims; and
T-Mobile acted reasonably and in good faith in not splitting its direct and
indirect purchaser claims while it was a member of the DPP class.

13

For these reasons, the DPPs’ filing of their complaint on November 5, 2007 tolled the statute of

14

limitations on T-Mobile’s California claims for the two years, four months, and 23 days between

15

November 5, 2007 and March 28, 2010, when T-Mobile was excluded from the DPP class. 8

16

*

17
18

*

*

When T-Mobile filed its complaint against Defendants on April 18, 2011, only
one year and 24 days had run on the statute of limitations governing its claims. Indeed, even

19
8

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26

In related cases, Defendants have argued that “Hatfield expressly held that the application of equitable
tolling is limited to California residents.” (Dkt. No. 4410 at 7.) Defendants’ assertion mischaracterizes
the Hatfield court’s analysis. Hatfield states unambiguously that California courts “would clearly permit
equitable tolling at least as to any class members who individually subsequently filed a similar claim.”
564 F.3d at 1189 (emphasis added). It suggestion that non-residents could not avail themselves of
equitable tolling was limited to non-residents pursuing claims as part of a class action, not individually.
See, e.g., id. at 1189 (“Although we conclude that California would allow its resident class members to
reap tolling benefits under its equitable tolling doctrine, the same cannot be said for the non-resident class
members.”). And even then the court’s proscription was far from categorical. The Hatfield court
explained that its limitation was intended to address circumstances where non-resident class members, as
part of a plaintiff class, attempted to prosecute an action in California that would be time-barred in the
“jurisdiction whose law would otherwise govern.” Id. at 1189. Hatfield in no way compels the
conclusion that non-resident class members would be denied equitable tolling in connection with their
prosecution of California state-law claims that accrued in California.

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

1

without the benefit of equitable tolling between November 5, 2007 and March 28, 2010 – i.e.,

2

even if T-Mobile were relying exclusively on fraudulent concealment and American Pipe tolling

3

– only three years, five months and 16 days had run on the statute of limitations governing

4

T-Mobile’s California claims as of the date T-Mobile filed its complaint. T-Mobile’s claims

5

under California law are therefore timely.

6
7
8
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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT

1
2
3

CONCLUSION
For the reasons stated above, T-Mobile respectfully urges the Court to deny
Defendants’ Joint Motion to Dismiss in Part T-Mobile’s Amended Complaint.

4
5

Dated: January 17, 2012

Respectfully submitted,

6
7

/s/
Brooke A. M. Taylor
David Orozco (CA Bar No. 220732)
E-Mail: [e-mail]
SUSMAN GODFREY L.L.P.
1901 Avenue of the Stars, Ste. 950
Los Angeles, CA 90067-6029
Telephone: [phone]
Facsimile: [phone]

8
9
10
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12

Parker C. Folse III (pro hac vice)
E-Mail: [e-mail]
Brooke A. M. Taylor (pro hac vice)
E-Mail: [e-mail]
SUSMAN GODFREY L.L.P.
1201 Third Ave, Suite 3800
Seattle, WA 98101
Telephone: [phone]
Facsimile: [phone]

13
14
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18

Edward A. Friedman (pro hac vice)
E-Mail: [e-mail]
Daniel B. Rapport (pro hac vice)
E-Mail: [e-mail]
Hallie B. Levin (pro hac vice)
E-Mail: [e-mail]
Jason C. Rubinstein (pro hac vice)
E-Mail: [e-mail]
FRIEDMAN KAPLAN SEILER &
ADELMAN LLP
7 Times Square
New York, NY 10036-6516
Telephone: [phone]
Facsimile: [phone]

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Master File No. C M:07-01827 SI
Individual Case No. C 3:11-02591 SI
MDL NO. 1827

Counsel for T-Mobile U.S.A., Inc.
16
OPPOSITION TO DEFENDANTS’ JOINT MOTION
TO DISMISS IN PART AMENDED COMPLAINT