Viewsonic Corporation v. AU Optronics Corporation et al

Filing 42

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' JOINT MOTION TO DISMISS (VIEWSONIC) 6392 in case 3:07-md-01827-SI; 33 in case 3:12-cv-00335-SI (Illston, Susan) (Filed on 9/26/2012)

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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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Case No.: C 12-0335 SI

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United States District Court
For the Northern District of California

No. M 07-1827 SI
MDL. No. 1827

This Order Relates to:

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VIEWSONIC CORPORATION,

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ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS’
JOINT MOTION TO DISMISS
(VIEWSONIC)

Plaintiff,
v.
AU OPTRONICS CORPORATION, et al.,
Defendants.
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Currently before the Court is defendants’ joint motion to dismiss the First Amended Complaint

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filed by ViewSonic Corporation. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter

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suitable for disposition without oral argument and therefore VACATES the hearing currently scheduled

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for September 28, 2012. Having considered the parties’ papers, and for good cause appearing, the Court

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hereby GRANTS IN PART and DENIES IN PART defendants’ joint motion.

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BACKGROUND

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ViewSonic is “a large manufacturer of televisions, computer monitors, and other consumer

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electronics.” FAC at ¶ 2. On January 20, 2012, it filed this action in this Court to “recover the damages

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it incurred as a result of a long-running conspiracy by manufacturers of liquid crystal display panels

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(‘LCD Panels’).” Compl. at ¶ 1. ViewSonic filed its first amended complaint (“FAC”) on July 27, 2012.

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The FAC contains four claims: 1) a claim under Section 1 of the Sherman Act, 15 U.S.C. § 1; 2) claims

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under Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26; 3) a claim under California’s

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Cartwright Act (“Cartwright Act”), Cal. Bus. & Prof. Code §§ 16720, et seq.; and 4) a claim under

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California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq. FAC at ¶¶

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157-171.

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Defendants now move to dismiss ViewSonic’s FAC in part.

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LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it

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fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss,

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United States District Court
For the Northern District of California

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the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl.

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Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard requires the plaintiff

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to allege facts that add up to “more than a sheer possibility that a defendant has acted unlawfully.”

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Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While courts do not require “heightened fact pleading

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of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.”

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Twombly, 550 U.S. at 555, 570.

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In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court

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must assume that the plaintiff’s allegations are true and must draw all reasonable inferences in the

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plaintiff’s favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the

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court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions

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of fact, or unreasonable inferences.” In re Gilead Sciences Sec. Litig., 536 F.3d 1049, 1055 (9th Cir.

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2008).

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If the court dismisses the complaint, it must then decide whether to grant leave to amend. The

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Ninth Circuit has “repeatedly held that a district court should grant leave to amend even if no request

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to amend the pleading was made, unless it determines that the pleading could not possibly be cured by

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the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citations and internal

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quotation marks omitted).

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DISCUSSION

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Defendants’ joint motion seeks dismissal of ViewSonic’s claims in four ways: first,

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“ViewSonic’s claims under the Cartwright Act and UCL should be dismissed as time-barred under the

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applicable statutes of limitations”; second, “ViewSonic’s Cartwright Act and UCL claims should be

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dismissed because the Complaint contains no allegations sufficient to support a conclusion that

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California law applies to all of its purchases”; third, “ViewSonic’s claims under the Sherman Act and

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Clayton Act should be dismissed to the extent they are based on indirect purchases”; and, fourth,

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“ViewSonic’s Complaint should be dismissed to the extent that it impermissibly relies on group

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pleading.” See Motion at 6.

United States District Court
For the Northern District of California

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The Court will discuss each basis for dismissal in turn.

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A.

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Defendants argue that ViewSonic’s Cartwright Act and UCL claims are untimely. ViewSonic

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filed suit more than four years after the DOJ’s December 11, 2006 announcement of its investigation

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into the conspiracy. Because these claims have four-year statutes of limitations, defendants contend that

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ViewSonic’s claims must be dismissed. In particular, defendants argue that ViewSonic does not

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sufficiently plead facts to justify tolling of the statutes of limitations.

ViewSonic’s Cartwright Act and UCL Claims – Tolling

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The Court agrees with defendants. ViewSonic articulates its basis for tolling for the first time

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in its opposition brief. The Court has addressed similar scenarios in this MDL and has concluded that

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bare tolling allegations similar to those in ViewSonic’s FAC do not satisfy the federal pleading

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standards. See, e.g., Order Granting Defendants’ Joint Motion to Dismiss, Master Docket No. 4867, at

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2-3 (Feb. 23, 2012) (“[P]laintiffs may not rely on generalized allegations that they are entitled to tolling

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. . . they must specifically identify every basis they intend to rely on to establish tolling of the statutes

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of limitations, whether they are class action lawsuits, enforcement actions brought by state Attorney

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Generals, or other matters.”). Plaintiffs in this MDL must plead with specificity the bases for their

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entitlement to tolling. Cf. Hinton v. Pacific Enters., 5 F.3d 391, 395 (9th Cir. 1993) (“The burden of

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alleging facts which would give rise to tolling falls upon the plaintiff. . . . That burden does not arise

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only after a motion to dismiss; rather, the plaintiff ‘must plead with particularity the circumstances
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surrounding the concealment and state facts showing his due diligence in trying to uncover the facts.’”).

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ViewSonic’s FAC alleges only that “[its] claims were tolled from the time that the first class

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action complaint relating to the conspiracy alleged herein was filed until the deadline for class members

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to opt out of the class.” FAC at ¶ 119. This is plainly insufficient to provide defendants with any useful

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notice of the basis for ViewSonic’s claim of entitlement to tolling. Accordingly, the Court GRANTS

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defendants’ joint motion to dismiss ViewSonic’s Cartwright Act and UCL claims as untimely, with

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leave to amend.

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B.

ViewSonic’s Cartwright Act and UCL Claims – Due Process

United States District Court
For the Northern District of California

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Defendants contend that ViewSonic’s Cartwright Act and UCL claims, as pled, fail to satisfy

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the requirements set out by this Court’s prior Due Process orders. In particular, defendants argue that

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ViewSonic does not adequately allege that it purchased LCD panels in California. The Court disagrees

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with defendants. The FAC alleges that “during and after the Conspiracy Period, Plaintiff purchased and

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paid for LCD Panels and LCD Products in California.” FAC at ¶ 7; see also id. at ¶ 170(c) (“During

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the Conspiracy Period, Plaintiff purchased LCD Panels and LCD Products containing price-fixed LCD

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Panels in California.”). These alleged facts justify applying California law. See Order Granting

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Defendants’ Joint Motion to Dismiss, Master Docket No. 1822, at 12 (June 28, 2010) (“[I]n order to

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invoke the various state laws at issue, [plaintiff] must be able to allege that ‘the occurrence or

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transaction giving rise to the litigation’ – which is [plaintiff’s] purchase of allegedly price-fixed goods

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– occurred in the various states.”). Accordingly, the Court DENIES defendants’ motion to dismiss

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ViewSonic’s Cartwright Act and UCL claims on Due Process grounds.

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C.

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Defendants move to dismiss ViewSonic’s Sherman Act claim to the extent that it is based upon

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indirect purchases. The parties appear to be in agreement on this point. In its opposition, ViewSonic

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states that it “is not seeking damages under its Sherman Act claim based on indirect purchases or

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purchases from non-conspirators.” Opp’n at 7. Accordingly, the Court GRANTS defendants’ motion

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to dismiss ViewSonic’s Sherman Act claim to the extent that it covers indirect purchases.

ViewSonic’s Sherman Act Claim

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D.

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Defendants contend that ViewSonic’s FAC impermissibly relies on group pleading. This Court

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has addressed a similar arguments on numerous occasions in this MDL and has concluded that

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allegations substantially similar to ViewSonic’s satisfy the federal pleading standards. See, e.g., Order

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Denying Defendants’ Joint Motion to Dismiss the Second Amended Complaint, Master Docket No.

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3590, at 3-4 (Sept.15, 2011); Order Denying Defendants’ Joint Motion to Dismiss, Master Docket No.

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3614, at 4-5 (Sept. 19, 2011). Accordingly, the Court DENIES defendants’ motion to dismiss on this

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basis.

Adequacy of Group Pleading

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United States District Court
For the Northern District of California

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CONCLUSION

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For the foregoing reasons and for good cause shown, the Court hereby GRANTS IN PART and

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DENIES IN PART defendants’ joint motion. Any amended complaint must be filed by October 8,

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2012. Master Docket No. 6392; Docket No. 33 in C 12-0335 SI.

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IT IS SO ORDERED.

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Dated: September 26, 2012

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SUSAN ILLSTON
United States District Judge

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