ACER America Corporation v. Hitachi, Ltd. et al

Filing 48

ORDER RE: NEC DEFENDANTS' MOTION TO TRANSFER 8882 (Illston, Susan) (Filed on 4/14/2014)

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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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United States District Court
For the Northern District of California

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IN RE: TFT-LCD (FLAT PANEL) ANTITRUST
LITIGATION
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No. M 07-1827 SI
MDL No. 1827

This Order Relates To Individual Case No. 13cv-3349 SI:

No. C 13-3349 SI

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ORDER RE NEC DEFENDANTS’
MOTION TO TRANSFER VENUE

ACER AMERICA CORPORATION;
GATEWAY, INC.; and GATEWAY U.S.
RETAIL, INC. f/k/a EMACHINES, INC.,
Plaintiffs,
v.
HITACHI, LTD.; HITACHI DISPLAYS, LTD.;
HITACHI ELECTRONIC DEVICES (USA),
INC.; NEC CORPORATION; NEC
CORPORATION OF AMERICA; NEC
DISPLAY SOLUTIONS OF AMERICA, INC.;
NEC LCD TECHNOLOGIES, LTD., NEC
ELECTRONICS AMERICA, INC.; TOSHIBA
CORPORATION; TOSHIBA MOBILE
DISPLAY CO., LTD.; TOSHIBA AMERICA
ELECTRONIC COMPONENTS, INC.;
TOSHIBA AMERICA INFORMATION
SYSTEMS, INC.; LG DISPLAY CO., LTD.; LG
DISPLAY AMERICA, INC.,
Defendants.
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Currently before the Court is the NEC defendants’ motion to transfer venue. Pursuant to Civil

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Local Rule 7-1(b), the Court determines that this matter is appropriate for resolution without oral

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argument and VACATES the hearing scheduled for April 18, 2014. For the reasons set forth below, the

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Court DENIES the motion to transfer venue.

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BACKGROUND

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The current motion is brought by five related defendants: NEC Corporation; NEC LCD

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Technologies, Ltd.; NEC Display Solutions of America, Inc.; NEC Electronics America, Inc.; and NEC

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Corporation of America, Inc. (collectively, “NEC”). On February 23, 1998, plaintiff Gateway, Inc.

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(“Gateway”) entered into a purchase agreement with Mitsubishi Electronics America – a predecessor

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to NDSA. See Declaration of Dylan Dunavan (“Dunavan Decl.”) Ex. A. Under the terms of the

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agreement, “any legal action by either party against the other relating to this Agreement or Schedule as

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contained therein shall be commenced in a court of competent jurisdiction in the State of South Dakota.”

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Id. ¶ 19.

United States District Court
For the Northern District of California

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NEC now moves for an order transferring this case to the District of South Dakota, following
pretrial proceedings.

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LEGAL STANDARD

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Under 28 U.S.C. § 1404(a), a court considering a motion to transfer venue must evaluate and

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weigh numerous private and public interest factors. See Williams v. Bowman, 157 F. Supp. 2d 1103,

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1106 (N.D. Cal. 2001); see also Jones v. GNC Franchising Inc., 211 F.3d 495, 498-99 (9th Cir. 2000).

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However, when venue is putatively governed by a valid forum selection clause, the calculus changes

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in three ways. See Atl. Marine Constr. Co., Inc. v. United States Dist. Court, 134 S. Ct. 568, 581 (2013).

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First, courts may accord no weight to the plaintiff’s chosen forum. Id. Second, courts may not consider

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the parties’ private interests. Id. at 582. Third, if venue is transferred, the original venue’s choice-of-

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law rules will not apply. Id. Thus, when a court considers a motion to transfer venue involving a valid

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forum selection clause, it may only consider public interest factors. Id. “In all but the most unusual

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cases, therefore, ‘the interest of justice’ is served by holding parties to their bargain.” Id. at 583.

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DISCUSSION

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NEC argues that venue should be transferred to South Dakota because the relevant public interest

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factors do not weigh in favor of keeping the case in the Northern District of California. The Court

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disagrees.
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As discussed more fully in the Court’s Order on NEC’s motion to compel arbitration, the

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February 23, 1998 agreement governs only direct purchases made by Gateway from NEC during the

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period of February 23, 1998 through February 23, 2002. It does not cover claims by the other two

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plaintiffs, or against defendants other than NEC. It also does not cover any of the plaintiffs’ indirect

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purchaser claims or claims based on co-conspirator liability. The plaintiffs here allege an array of

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conspiratorial conduct by multiple defendants, occurring from 1996 through the end of 2006. Am.

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Compl. ¶ 1. Thus, the vast majority of the alleged wrongdoing in this case is not governed by the

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agreement.
The Court agrees with plaintiffs that enforcing the forum selection clause under these

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United States District Court
For the Northern District of California

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circumstances would contravene the federal policy in favor of “efficient resolution of controversies.”

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See Frigate Ltd. v. Damia, No. C 06-04734 CRB, 2007 WL 127996, at *3 (N.D. Cal. Jan. 12, 2007).

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Enforcing the forum selection clause would splinter Gateway’s Sherman Act claims from its California

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state law claims. It would also require that Gateway’s claims against NEC be tried separately from its

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substantially similar claims against the other defendants. This would be “needlessly inconvenient and

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burdensome [and] plainly contrary to the policy of the federal judiciary of promoting the consistent and

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complete adjudication of disputes.” Frigate, 2007 WL 127996 at *3.

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Accordingly, the Court finds that the public interest would be best served by keeping this case
in the Northern District of California, and therefore DENIES NEC’s motion to transfer venue.

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CONCLUSION

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For the foregoing reasons and for good cause shown, and on the basis of the record before it, the

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Court hereby DENIES NEC’s motion to transfer venue. This Order resolves Master Docket No. 8882.

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IT IS SO ORDERED.

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Dated: April 14, 2014
SUSAN ILLSTON
UNITED STATES DISTRICT JUDGE

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