Viewsonic Corporation v. AU Optronics Corporation et al

Filing 58

ORDER GRANTING IN PART DEFENDANTS' JOINT MOTION TO DISMISS (VIEWSONIC) 7023 (Illston, Susan) (Filed on 11/28/2012)

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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
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 Second Amended

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Complaint (“SAC”) filed by ViewSonic Corporation. Pursuant to Civil Local Rule 7-1(b), the Court

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finds this matter suitable for disposition without oral argument and therefore VACATES the hearing

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currently scheduled for November 30, 2012. Having considered the parties’ papers, and for good cause

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appearing, the Court hereby GRANTS 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.” SAC at ¶ 2. After having its First Amended Complaint dismissed in part, ViewSonic filed

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its Second Amended Complaint on October 8, 2012. See Docket Nos. 6852 & 6928 in Master Case No.

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07-1827. The SAC contains two claims for relief: 1) a claim under Section 1 of the Sherman Act, 15

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U.S.C. § 1; and 2) a claim under California’s Cartwright Act (“Cartwright Act”, Cal. Bus. & Prof. Code

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§§ 16720, et seq.) and California’s Unfair Competition Law (“UCL”, Cal. Bus. & Prof. Code §§ 17200,

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et seq.). Defendants move to dismiss ViewSonic’s Sherman Act claim for failure to sufficiently plead

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antitrust standing, and to dismiss the California Cartwright and UCL claims as barred by the statute of

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limitations. Docket No. 7023.

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

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United States District Court
For the Northern District of California

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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, 556 U.S. 662, 678 (2009). While courts do not require “heightened fact pleading of

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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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DISCUSSION

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A.

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In ruling on the prior motion to dismiss, the Court found that ViewSonic failed to sufficiently

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plead facts to justify tolling of the statute of limitations for its California state law claims. See Docket

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No. 6582 at 3-4 (citing Order Granting Defendants’ Joint Motion to Dismiss, Master Docket No. 4867,

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

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

ViewSonic’s Cartwright Act and UCL Claims – Tolling

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

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Attorney Generals, or other matters.”)). The Court required ViewSonic to “plead with specificity the

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bases for their entitlement to tolling.” Id., at 3. In its SAC, ViewSonic identifies two primary sources

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on which it relies for tolling: (1) the Consolidated Amended Complaint in the IPP Action (“IPP-CAC”),

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and (2) the complaints filed in Hee v. LG Philips LCD Co. Ltd., et al., Case No. 07-CV-0722 (N.D. Cal.,

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filed Feb. 2, 2007), and in Selfridge v. LG Philips LCD Co. Ltd., et al., Case No. 07-CV-01312 (S.D.

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Cal., filed Feb. 15, 2007). See SAC, ¶ 123.
As an initial matter, the Court finds that American Pipe tolling applies to toll ViewSonic’s

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California claims for the period of November 5, 2007 through December 5, 2008, when resellers like

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United States District Court
For the Northern District of California

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ViewSonic were excluded from the scope of that action. See, e.g., Docket No. 6506 at 4 [CompuCon].

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Defendants contend, however, that ViewSonic cannot rely on Hee and Selfridge to provide the 10 extra

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days of tolling required for ViewSonic’s complaint because neither Hee nor Selfridge identified what

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LCD panels or products the plaintiffs in those class actions actually purchased. See Joint Motion

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[Docket No. 7023] at 9.1 Consistent with the Court’s past orders, the Court finds the ViewSonic can rely

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on Hee and Selfridge to toll its California claims, but the tolling is limited to the defendants, products

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and conspiracy periods identified in Hee, Selfridge and the IPP-CAC. See, e.g., Docket No. 4718 at 1

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[Office Depot II]; Docket No. 6386 at 5 [TechData].

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ViewSonic also argues that the filing of a direct purchaser class action complaint in December,

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2006, tolls its state law claims under California’s equitable tolling doctrine. Under that doctrine, three

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factors are considered: “1) timely notice to the defendant in the filing of the first claim; (2) lack of

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prejudice to the defendant in gathering evidence to defend against the second claim; and (3) good faith

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and reasonable conduct by the plaintiff in filing the second claim.” Hatfield v. Halifax PLC, 564 F.3d

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1177, 1185 (9th Cir. 2009) (citing Collier v. City of Pasadena, 142 Cal. App. 3d 917 (1983)). As an

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initial matter, the Court has already rejected a similar argument, finding that the direct purchaser class

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actions did not equitably toll the statute of limitations for claims under Florida law. See Docket No.

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Defendants argue – and ViewSonic does not dispute – that because ViewSonic filed its
complaint on January 20, 2012, and the IPP-CAC only tolled ViewSonic’s California indirect purchaser
claims for a period of one year and one month, ViewSonic needs to identify a basis for tolling its claims
for an additional 10 days.
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4602 [Interbond/Brandsmart]. Considering the relevant factors under California law, the Court likewise

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rejects ViewSonic’s argument. First, ViewSonic does not even attempt to show that the direct

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purchaser class claims are substantially similar to the California indirect purchaser claims in terms of

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proof. Indeed concerns about differences between direct and indirect purchaser claims led this Court

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to bifurcate parts of the DPP and IPP class trial. See Docket No. 5518 at 1. As such, it is questionable

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whether the direct purchaser class action provided fair notice of the need to investigate potential indirect

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purchaser claims under California law. More importantly, because ViewSonic waited until January

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2012 to file its indirect purchaser claims, defendants have been prejudiced in their ability to collect

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evidence and defend against ViewSonic’s California claims, even if defendants were already

United States District Court
For the Northern District of California

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investigating the direct and indirect purchaser claims of other plaintiffs.

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As a result, the Court GRANTS defendants’ motion to dismiss in part and ViewSonic’s

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California law claims are limited to the defendants, products and conspiracy time periods asserted in

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Hee and Selfridge complaints, as well as the IPP-CAC complaint during the time resellers were

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included.

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B.

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Defendants argue that ViewSonic does not have standing for its Sherman Act claim based on

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ViewSonic’s indirect purchase of finished LCD products because ViewSonic has: (1) failed to

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adequately plead the “ownership or control” exception to the Illinois Brick bar; and (2) failed to allege

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which defendant or co-conspirator sold finished LCD products to ViewSonic. With respect to the first

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argument, the Court has rejected defendants’ contention that the Ninth Circuit in In re ATM Fee

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Antitrust Litig., 686 F.3d 741 (9th Cir. 2012), limited the “ownership or control” exception to situations

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where the seller of the price-fixed goods owns/controls the direct purchaser. See Docket No. 7188. The

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Court found that the exception still covers situations where a co-conspirator owns/controls the direct

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purchaser and where the direct purchaser owns/controls the seller or co-conspirator. Id., at 5-6. As

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such, ViewSonic’s allegations – that it purchased LCD products from defendants and co-conspirators,

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SAC ¶¶ 2, 17 – are sufficient to state a claim under the exception at this juncture. The Court also rejects

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defendants’ argument that ViewSonic is required to identify with specificity who it purchased finished

ViewSonic’s Sherman Act Standing

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LCD products from. In this case, where significant evidence of the alleged conspiracy is in the public

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record, there is no reason to require ViewSonic to provide this information at the pleading stage.

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CONCLUSION
For the foregoing reasons, the Court GRANTS in part defendants’ motion to dismiss. Master
Docket No. 7023; Docket No. 50 in C 12-0335 SI.

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IT IS SO ORDERED.

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United States District Court
For the Northern District of California

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Dated: November 28, 2012

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SUSAN ILLSTON
United States District Judge

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