Optronic Technologies, Inc., v. Ningbo Sunny Electronic Co., Ltd. et al

Filing 636

ORDER Granting 583 Plaintiff's Motion for Equitable Relief and Judgment on UCL Claim. Signed by Judge Edward J. Davila on 4/9/2020. (ejdlc3S, COURT STAFF) (Filed on 4/9/2020)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6

SAN JOSE DIVISION

7
8

OPTRONIC TECHNOLOGIES, INC,
Plaintiff,

9

v.

10

United States District Court
Northern District of California

11

NINGBO SUNNY ELECTRONIC CO.,
LTD., et al.,

12

Case No. 5:16-cv-06370-EJD
ORDER GRANTING PLAINTIFF’S
MOTION FOR EQUITABLE RELIEF
AND JUDGMENT ON UCL CLAIM

Defendants.

13

Re: Dkt. No. 582

Pursuant to 15 U.S.C. § 26, Cal Bus. and Prof. Code § 17200, and Federal Rules of Civil

14

Procedure 54(b) and 58(b)(2)(B), Plaintiff Optronic Technologies, Inc. (“Plaintiff” or “Orion”)

15

moves this Court for equitable relief and judgment on its claim arising under California’s Unfair

16

Competition Law (“UCL”). The Court took the matter under submission for decision without oral

17

argument pursuant to Civil Local Rule 7-1(b). For the reasons below, Plaintiff’s motion is

18

GRANTED.

19
20
21
22

I.

Background
The basic facts and procedural history underlying this case are well known to the Court

and the parties. The Court recounts only the pertinent background here.
On November 26, 2019, and after a six-week jury trial, the jury returned a verdict for

23

Plaintiff and against defendants Ningbo Sunny Electronic Co., LTD (“Ningbo Sunny” or, for the

24

purposes of this motion, “Defendant”), Sunny Optics, Inc. (“Sunny Optics”), and Meade

25

Instruments, Corp. (“Meade”) on all claims. Dkt. No. 501. The jury found that the defendants had

26

conspired to fix prices or credit terms in violation of the Sherman Act Section 1 (Claim 1), had

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
1

1

conspired to allocate the market for telescopes in violation of the Sherman Act Section 1 (Claim

2

2), had attempted to monopolize the market in violation of the Sherman Act Section 2 (Claim 3),

3

had conspired to monopolize the market in violation of the Sherman Act Section 2 (Claim 4), and

4

that the acquisition of Meade by Ningbo Sunny and Sunny Optics harmed competition in violation

5

of the Clayton Act Section 7 (Claim 5). Ibid. The jury found that Orion suffered $14 million in

6

damages for each of the Sherman Act claims and $16.8 million for the Clayton Act Claim. Ibid.
After the verdict, Sunny Optics and Meade entered bankruptcy and the litigation was

7

stayed as to them. Dkt. Nos. 511, 512. On December 5, 2019, the Court entered a partial

9

judgment against Ningbo Sunny on Plaintiff’s damages claims awarding Plaintiff $50,400,000 in

10

accordance with the verdict’s award of $16,800,000 as trebled pursuant to 15 U.S.C. §15(a). Dkt.

11
United States District Court
Northern District of California

8

No. 518. On February 21, 2020, Plaintiff filed a motion for equitable relief and judgment on its

12

UCL claim. Dkt. No. 583 (“Motion”). Defendant opposes the motion. Dkt. No. 596

13

(“Opposition”).
On April 3, 2020, the Court partially granted Defendant’s Motion to Alter or Amend

14
15

Judgment (Dkt. No. 534) and simultaneously granted Plaintiff’s Motion for Attorneys’ Fees and

16

Costs (Dkt. No. 558). On the same day, the Court issued an Amended Partial Judgment (Dkt. No.

17

630), which amended the damages to $52,030,371.73 plus post-judgment interest, in accordance

18

with the post-trial motions. The Court denied Ningbo Sunny’s Renewed Motion for Judgment as

19

a Matter of Law (Dkt. No. 556) and Motion for a New Trial (Dkt. No. 557). The Court now

20

considers Plaintiff’s motion for a permanent injunction and its request for judgment on the

21

remaining UCL claim.

22
23
24

II.

Discussion
A. Plaintiff’s Request For a Permanent Injunction Under Section 16
Under Section 16 of the Clayton Act, courts have the power to grant injunctive relief for

25

violations of the antitrust laws. 15 U.S.C. § 26 (authorizing “[a]ny person . . . [to] have injunctive

26

relief . . . against threatened loss or damage by a violation of the antitrust laws . . . when and under

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
2

1

the same conditions and principles as injunctive relief against threatened conduct that will cause

2

loss or damage is granted by courts of equity”). Where a violation of law has already been

3

established, injunctive relief should be granted if “there exists some cognizable danger of recurrent

4

violation.” Fed. Trade Comm’n v. Qualcomm Inc., 411 F. Supp. 3d 658, 812 (N.D. Cal. 2019)

5

(granting injunctive relief under the FTC Act after the court found violations of the FTC and

6

Sherman Acts) (citing United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953).

7

In general, “[t]o obtain permanent injunctive relief, a plaintiff must show (1) that it has

8

suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are

9

inadequate to compensate for that injury; (3) that, considering the balance of hardships between
the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would

11
United States District Court
Northern District of California

10

not be disserved by a permanent injunction.” California ex rel. Lockyer v. U.S. Dep’t of Agric.,

12

575 F.3d 999, 1019–20 (9th Cir. 2009) (internal quotations and citations omitted).

13

These four elements apply when considering relief under Section 16 of the Clayton Act.

14

The Supreme Court has stated that Section 16, “which was enacted by the Congress to make

15

available equitable remedies previously denied private parties, invokes traditional principles of

16

equity.” Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 131 (1969); 15 U.S.C. §

17

26 (injunctive relief is authorized “when and under the same conditions and principles as

18

injunctive relief . . . is granted by courts of equity”). The traditional principles of equity call for

19

the four-step analysis above. eBay Inc., v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)

20

(“According to well-established principles of equity, a plaintiff seeking a permanent injunction

21

must satisfy a four-factor test before a court may grant such relief.”).

22

“The party seeking an injunction ‘has the general burden of establishing the elements

23

necessary’ to obtain relief.” BladeRoom Grp. Ltd. v. Emerson Elec. Co., No. 5:15-CV-01370-

24

EJD, 2019 WL 1117537, at *2 (N.D. Cal. Mar. 11, 2019) (citing Klein v. City of San Clemente,

25

584 F.3d 1196, 1201 (9th Cir. 2009)). Ultimately, “[t]he decision to grant or

26

deny permanent injunctive relief is an act of equitable discretion by the district court.” eBay, Inc.,

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
3

1
2

547 U.S. at 391.
i.

Irreparable Injury and Inadequacy of Monetary Damages

3

The first two elements are significantly interrelated. “Irreparable harm may be established

4

where there is the fact of an injury, such as that arising from a breach of contract, but where there

5

is an inability to ascertain the amount of damage.” DVD Copy Control Ass’n, Inc., 176 Cal. App.

6

4th at 722. “In other words, to say that the harm is irreparable is simply another way of saying

7

that pecuniary compensation would not afford adequate relief or that it would be extremely

8

difficult to ascertain the amount that would afford appropriate relief.” Ibid. Therefore, the Court

9

considers the first two elements together.

10

Plaintiff raises three arguments regarding irreparable harm. First, Plaintiff argues that it “is

United States District Court
Northern District of California

11

suffering from irreparable and non-compensable harm because Defendant is engaged in a

12

judgment avoidance scheme.” Mot. at 12. Defendant argues that Plaintiff’s allegations regarding

13

Defendant’s post-judgment conduct are irrelevant to the injunctive relief Plaintiff seeks under

14

Section 16. Opp. at 6-8. The Court agrees that the equitable relief to which Plaintiff is entitled

15

under Section 16 is not meant to provide a remedy for Defendant’s post-judgment misconduct.

16

A permanent injunction cannot be ordered merely because the requesting party did not receive the

17

full extent of the legal relief it sought. See BladeRoom Grp. Ltd., No. 15-cv-01370, 2019 WL

18

1117537, at *3. To the extent that Defendant’s post-judgment misconduct demonstrates an

19

unwillingness to cease its anti-competitive behavior, however, such misconduct offers evidence

20

that the legal violations established at trial are ongoing or likely to recur. These allegations thus

21

weigh in favor of finding a threat of irreparable injury.

22

Plaintiff next argues that Defendant’s violations of antitrust laws have caused structural

23

harm to the U.S telescope market and that such injury will become irreparable if Defendant

24

intentionally puts Meade out of business. Defendant does not directly address this argument. The

25

Court agrees with Plaintiff that Defendant’s decision to forego profit by refusing to supply

26

products to its own wholly-owned subsidiary evidences Defendant’s intent to unlawfully restrain

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
4

1

competition. Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 409

2

(2004) (“The unilateral termination of a voluntary (and thus presumably profitable) course of

3

dealing suggest[s] a willingness to forsake short-term profits to achieve an anticompetitive end.”)

4

(quoting Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 6018, 610-11 (1985)

5

(emphasis in original). The jury found that Defendant’s acquisition of Meade created a reasonable

6

likelihood of substantially lessening competition or creating a monopoly, and the Court finds that

7

eliminating Meade as a competitor entirely would achieve a similar result by over-concentrating

8

the telescope market. Such an injury to the market would be irreparable.
Defendant argues that this potential injury to Plaintiff and to the market is merely

10

speculative. To support a permanent injunction under Section 16, however, it is enough to show

11
United States District Court
Northern District of California

9

“threatened loss or damage by a violation of the antitrust laws” if injunctive relief is not granted.

12

15 U.S.C. § 26; Zenith Radio Corp., 395 U.S. at 130 (“section 16 . . . authorizes injunctive relief

13

upon the demonstration of ‘threatened’ injury. That remedy is characteristically available even

14

though the plaintiff has not yet suffered actual injury.”). In any event, the jury expressly found

15

that Plaintiff did suffer actual injury here. See, e.g., Verdict Form, Dkt. No. 501 at 5. The jury’s

16

verdict and the evidence on which it was based are sufficient to demonstrate that the threat of

17

irreparable injury to the market is more than speculative.

18

Finally, Plaintiff argues that “[i]f the structural problems caused by Defendant go

19

uncorrected, Orion faces the danger of losing its business.” Mot. at 12. Defendant contends that

20

Plaintiff has not shown that it actually risks losing its business, and that the loss of Plaintiff’s

21

business would be a “purely monetary injury.” Opp. at 8 (citing Colorado River Indian Tribes v.

22

Town of Parker, 776 F.2d 846, 850-51 (9th Cir. 1985).

23

The Court finds that Plaintiff has shown sufficient evidence that its business would be

24

threatened with extinction in the absence of injunctive relief. At trial, Orion presented evidence,

25

without objection from Defendant, that if Defendant continues its anticompetitive conduct, Orion

26

would go out of business. See, e.g., Trial Tr. at 1771:21-23 (Q. And do you have any concerns

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
5

1

about what will happen to Orion in the event that you don’t receive that relief? A. They’re going

2

to kill us.); id. at 2499:24-2500:2 (discussing Defendant’s lack of objection to evidence of

3

Plaintiff’s financial distress). This evidence is sufficient to show that Plaintiff faces the threat of

4

going out of business. See hiQ Labs, Inc. v. LinkedIn Corp., 938 F.3d 985, 993 (9th Cir. 2019)

5

(finding “ample support” for the asserting that the survival of the plaintiff’s business was

6

threatened absent an injunction, where the plaintiff’s CEO made statements that without injunctive

7

relief, the business would have to “lay off most if not all its employees, and shutter its

8

operations.”).
The threat to Plaintiff’s business is sufficient to establish irreparable harm. Am. Passage

10

Media Corp. v. Cass Commc’ns, Inc., 750 F.2d 1470, 1474 (9th Cir. 1985) (“The threat of being

11
United States District Court
Northern District of California

9

driven out of business is sufficient to establish irreparable harm.”). “[T]he loss of . . . an ongoing

12

business representing many years of effort and the livelihood of its . . . owners, constitutes

13

irreparable harm. What plaintiff stands to lose cannot be fully compensated by subsequent

14

monetary damages.” hiQ Labs, Inc., 938 F.3d at 993 (quoting Roso–Lino Beverage Distributors,

15

Inc. v. Coca–Cola Bottling Co. of New York, Inc., 749 F.2d 124, 125–26 (2d Cir. 1984) (per

16

curiam)). Defendant cites Colorado River Indian Tribes to support its argument that the loss of

17

business would be a purely monetary injury. That case is inapposite. In that case, the plaintiff did

18

not face the threat of being driven out of business, but rather the threat of loss of income due to a

19

tax increase. Colorado River Indian Tribes, 776 F.2d at 851.

20
21

ii.

Balance of Hardships

In determining whether to grant Plaintiff’s motion for a permanent injunction, the Court

22

also considers the balance of the hardships to the parties. Taleff v. Sw. Airlines Co., 828 F. Supp.

23

2d 1118, 1123 (N.D. Cal. 2011), aff’d, 554 F. App’x 598 (9th Cir. 2014). When considering

24

injunctive relief, “courts ‘must balance the competing claims of injury and must consider the

25

effect on each party of the granting or withholding of the requested relief.’” Winter v. Nat. Res.

26

Def. Council, Inc., 555 U.S. 7, 24 (2008) (quoting Amoco Prod. Co. v. Gambell, 480 U.S. 531, 542

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
6

1
2

(1987)).
Plaintiff argues that it “will continue to suffer from the effects of Defendant’s continuing

3

unlawful behavior, as well as the structural damage Defendant inflicted on the U.S. telescope

4

market, absent the requested relief.” Mot. at 13-14. Plaintiff argues that in contrast, the proposed

5

injunction would impose no hardship on Defendant. Ibid. In fact, the relief requested—

6

specifically, selling products to Meade and to Plaintiff on non-discriminatory terms—would be

7

profitable for Defendant. Ibid. Defendant does not address this factor directly. In arguing that the

8

proposed injunction is overbroad, however, Defendant argues that the injunction would

9

significantly burden the “everyday functions of its business.” Opp. at 6.

10

As discussed above, Plaintiff stands to lose its business if Defendant’s misconduct

United States District Court
Northern District of California

11

continues. The primary potential burden that Defendant raises is that it would be unable to

12

communicate with one of its customers, Celestron. The Court addresses this concern in Part C

13

below. In comparison to the potential harm to Plaintiff, the potential burden on Defendant’s

14

business operations as a result of the injunction ordered herein is slight. Thus, the Court finds that

15

the balance of hardships tilts in favor of Plaintiff.

16
17

iii.

Public Interest

“Whereas the balance of equities focuses on the parties, ‘[t]he public interest inquiry

18

primarily addresses impact on non-parties rather than parties,’ and takes into consideration ‘the

19

public consequences in employing the extraordinary remedy of injunction.’” hiQ Labs, Inc., 938

20

F.3d at 1004 (citing Bernhardt v. Los Angeles Cty., 339 F.3d 920, 931-32 (9th Cir. 2003)). “By its

21

very nature, the determination that [a defendant] has violated the Sherman Act and that ‘the

22

wrongs are ongoing or likely to recur’ is a finding that an injunction is in the public interest

23

because it will restrain the defendant from further anticompetitive conduct.” Qualcomm Inc., 411

24

F. Supp. 3d at 813 (citing F.T.C. v. Evans Prod. Co., 775 F.2d 1084, 1087 (9th Cir. 1985)).

25

In this case, the jury found that Defendant violated Sections 1 and 2 of the Sherman Act

26

and Section 5 of the Clayton Act. As discussed in Part (i) above, Defendant’s refusal to supply

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
7

1

Meade is likely to cause over-concentration of the telescope market. Injunctive relief is necessary

2

to protect the market from over-concentration by preventing Defendant from further violating

3

antitrust laws. The Court, therefore, finds that it is in the public interest to issue an injunction

4

prohibiting Defendant from engaging in conduct previously found to violate the law.

5

See California v. American Stores Co., 495 U.S. 271, 284 (1990) (“We have recognized when

6

construing § 16 that it was enacted not merely to provide private relief, but . . . to serve as well the

7

high purpose of enforcing the antitrust laws.”).

8

Because the Court finds that Plaintiff has established the prerequisites for injunctive relief,

9

the Court concludes that a permanent injunction is warranted under Section 16 of the Clayton Act.

10

B. Plaintiff’s Request for Entry of Judgment On UCL Claim

United States District Court
Northern District of California

11

Plaintiff’s third cause of action in its amended complaint alleges that Defendant violated

12

California’s Unfair Competition Law (“UCL”). First Am. Compl. ¶¶ 139-141. Before trial, the

13

parties agreed that the claim would not be tried before the jury and that the Court should rule on

14

the claim following the jury verdict. Joint Pretrial Conference Statement, Dkt. No. 331, at 20-21

15

(“The parties agree that Orion’s claim under [the UCL] is an equitable claim that should be tried to

16

the bench and not the jury. The parties also agree that the Court should rule on Orion’s UCL

17

claim after the jury has returned its verdict.”). Plaintiff now seeks judgment and relief on this

18

claim. Defendant did not raise any arguments in opposition.

19

“The UCL broadly prohibits ‘any unlawful, unfair or fraudulent business act or practice.’”

20

Alvarez v. Chevron Corp., 656 F.3d 925, 933 (9th Cir. 2011); quoting Cal. Bus. & Prof. Code

21

§ 17200). “By proscribing any unlawful business practice, [the UCL] borrows violations of other

22

laws and treats them as unlawful practices that the unfair competition law makes independently

23

actionable.” Cel–Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 180

24

(1999) (citation and internal quotation marks omitted). Thus, the “unlawful” prong of the statute

25

prohibits “anything that can properly be called a business practice and that at the same time is

26

forbidden by law.” Ibid.

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
8

1

“[I]n a case where legal claims are tried by a jury and equitable claims are tried by a judge,
and the claims are ‘based on the same facts,’ in deciding the equitable claims ‘the Seventh

3

Amendment requires the trial judge to follow the jury’s implicit or explicit factual

4

determinations.’” Los Angeles Police Protective League v. Gates, 995 F.2d 1469, 1473 (9th Cir.

5

1993) (quoting Miller v. Fairchild Indus., 885 F.2d 498, 507 (9th Cir. 1989), cert. denied, 494

6

U.S. 1056 (1990)). The jury in this case concluded that Defendant violated the Sherman Act

7

Sections 1 and 2 as well as the Clayton Act Section 7. The jury’s findings as to Defendant’s

8

violations of law are sufficient to demonstrate that Defendant’s conduct was “unlawful” under the

9

UCL. Planned Parenthood Fed’n of Am., Inc. v. Ctr. for Med. Progress, 214 F. Supp. 3d 808, 836

10

(N.D. Cal. 2016) (“[B]ecause I conclude that plaintiffs have adequately alleged violations of other

11
United States District Court
Northern District of California

2

federal and state laws, plaintiffs have adequately pleaded the basis for an unlawful UCL claim.”)

12

aff’d, 890 F.3d 828 (9th Cir. 2018), amended, 897 F.3d 1224 (9th Cir. 2018), and aff’d, 735 F.

13

App’x 241 (9th Cir. 2018).

14

Plaintiff has adequately proven its UCL claim and the Court will enter judgment in favor

15

of Plaintiff. The UCL empowers a court to issue injunctions for violations of the UCL. Cal. Bus.

16

& Prof. Code § 17203. The standard for injunctive relief under the UCL is less demanding than

17

the standard under Section 16. See Haas Automation, Inc. v. Denny, No. 12-cv-4779 (CBM),

18

2014 WL 2966989, at *9 (C.D. Cal. Jul. 1, 2014) (stating that under the UCL, plaintiff need only

19

show “the elements of a cause of action involving the wrongful act sought to be enjoined and . . .

20

the grounds for equitable relief, such as, inadequacy of the remedy at law.”) (quoting City of S.

21

Pasadena v. Dep’t of Transp., 29 Cal. App. 4th 1280, 1293 (1994)). The Court finds that

22

injunctive relief is warranted under the UCL for the reasons discussed in Part A above.

23
24

C. The Scope of the Injunction
The Supreme Court instructs “that a remedies decree in an antitrust case must seek

25

to ‘unfetter a market from anticompetitive conduct,’ to ‘terminate the illegal monopoly, deny to

26

the defendant the fruits of its statutory violation, and ensure that there remain no practices likely to

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
9

1

result in monopolization in the future.’” United States v. Microsoft Corp., 253 F.3d 34, 103 (D.C.

2

Cir. 2001) (quoting Ford Motor Co. v. United States, 405 U.S. 562, 577 (1972), and United States

3

v. United Shoe Mach. Corp., 391 U.S. 244, 250 (1968)); see also United States v. U.S. Gypsum

4

Co., 340 U.S. 76, 88 (1950) (an antitrust remedy must, “so far as practicable, cure the ill effects of

5

the illegal conduct, and assure the public freedom from its continuance”). Thus, it is “entirely

6

appropriate” for a court to order an injunction “beyond a simple proscription against the precise

7

conduct previously pursued.” Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 698

8

(1978). The relevant question is “whether the relief represents a reasonable method of eliminating

9

the consequences of the illegal conduct.” Ibid.; accord Fed. Trade Comm’n v. Grant Connect,

10

United States District Court
Northern District of California

11

LLC, 763 F.3d 1094, 1105 (9th Cir. 2014).
District courts are “clothed with large discretion to fit the decree to the special needs of the

12

individual case.” Ford, 405 U.S. at 573 (internal quotations omitted); see also Zenith Radio

13

Corp., 395 U.S. at 131 (1969) (“Section 16 should be construed and applied . . . with the

14

knowledge that the remedy it affords, like other equitable remedies, is flexible and capable of nice

15

‘adjustment and reconciliation between the public interest and private needs as well as between

16

competing private claims.’”) (quoting Hecht Co. v. Bowles, 321 U.S. 321, 329-330 (1944));

17

California ex rel. Lockyer, 575 F.3d at 1020 (“In determining the scope of an injunction, a district

18

court has broad latitude, and it must balance the equities between the parties and give due regard

19

to the public interest.”) (quoting Geertson Seed Farms v. Johanns, 570 F.3d 1130, 1136 (9th

20

Cir.2009)).

21
22
23

Plaintiff requests an order requiring Defendant to:
1. Supply Meade at non-discriminatory (i.e., most-favored-customer) terms for five
years;

24

2. Supply Orion at non-discriminatory terms for five years;

25

3. Refrain from communicating with Synta about the prices of telescopes and

26
27
28

accessories;
CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
10

1

4. Refrain from sharing customer information with Synta, including but not limited to

2

statistics about which products Defendant’s customers are buying, how much

3

Defendant is charging for those products, and the volume of purchases from

4

Defendant;

5
6

5. Refrain from communicating with Synta about which products Defendant and
Synta will manufacture; and

7

6. Refrain from participating in any internal meetings or strategy sessions in which

8

any representative from a competitor, including David Shen or any employee of

9

Synta, is in attendance.

10

Mot. at 10. The Court considers each request in turn.

United States District Court
Northern District of California

11

Plaintiff requests that Defendant be ordered to supply both Meade and Orion at non-

12

discriminatory terms for a period of five years. Defendant argues that the Court may not impose

13

an injunction forcing it to do business with any entity or dictate the terms of any business

14

transaction. Opp. at 4. Defendant cites Verizon Communications Inc. v. Law Offices of Curtis V.

15

Trinko, LLP (“Trinko”) in support of this argument. 540 U.S. 398 (2004). In Trinko, the

16

Supreme Court considered whether the plaintiff had stated a claim under Section 2 of the Sherman

17

Act for refusing to deal with competitors. Trinko did not address whether and to what extent a

18

mandatory injunction may be appropriate to remedy an actual violation of law.

19

In cases that did involve injunctive relief, the Supreme Court has repeatedly “upheld

20

injunctions issued pursuant to § 16 regardless of whether they were mandatory or prohibitory in

21

character.” American Stores Co., 495 U.S. at 283-84 (1990) (affirming district court’s power to

22

grant divestiture by requiring defendant to sell certain assets); see also Zenith Radio Corp., 395

23

U.S. at 129–33 (reinstating injunction that required defendants to withdraw from patent

24

pools); Silver v. New York Stock Exchange, 373 U.S. 341, 345, 365 (1963) (reinstating judgment

25

for defendants in suit to compel installation of wire services); Pacific Coast Agricultural Export

26

Ass’n v. Sunkist Growers, Inc., 526 F.2d 1196, 1200–01, 1208–09 (9th Cir.1975) (affirming an

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
11

1

injunction enjoining defendant from “refusing to sell [products] to any qualified exporters” and

2

providing a formula for determining the price of those products), cert. denied, 425 U.S. 959

3

(1976).

4

Defendant also argues that the word “non-discriminatory” renders the relief impermissibly

5

vague and that enforcement of such a term would require extensive oversight by the Court. Opp.

6

at 2. As Plaintiff points out, the Ninth Circuit expressly approved an injunction using the term

7

“non-discriminatory” in Image Tech. Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195 (9th Cir.

8

1997) (explaining that “requiring nondiscriminatory pricing” was necessary to end the defendant’s

9

monopoly). Plaintiff specifies that the term “non-discriminatory” means that “Defendant should
only be able to charge Meade and Orion the same price it charges to Celestron and its other

11
United States District Court
Northern District of California

10

customers.” Reply, Dkt. No. 608, at 7. The Court finds that this explanation gives Defendant

12

adequate notice of what the Court intends to require. Fed. R. Civ. Proc. 65(d)(1); E. & J. Gallo

13

Winery v. Gallo Cattle Co., 967 F.2d 1280, 1297 (9th Cir. 1992) (“Injunctions are not set aside

14

under Rule 65(d) unless they are so vague that they have no reasonably specific meaning.”).

15

The Court concludes that requiring Defendant to supply Plaintiff and Meade at non-

16

discriminatory terms for a period of five years is a reasonable method of remedying the harm to

17

Plaintiff caused by Defendant’s attempted monopolization and of ensuring that Defendant’s

18

violations of antitrust law do not recur. See Nat’l Soc’y of Prof’l Eng’rs, 435 U.S. at 698 (District

19

Courts are “empowered to fashion appropriate restraints on [a defendant’s] future activities both to

20

avoid a recurrence of the violation and to eliminate its consequences.”); see also Bresgal v.

21

Brock, 843 F.2d 1163, 1170–71 (9th Cir. 1987) (“[A]n injunction is not necessarily made over-

22

broad by extending benefit or protection to persons other than prevailing parties in the lawsuit—

23

even if it is not a class action—if such breadth is necessary to give prevailing parties the relief to

24

which they are entitled.”).

25
26
27
28

Plaintiff next requests that Defendant be ordered to refrain from communicating with
“Synta” about the prices of telescopes and accessories and about which products Defendant and
CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
12

1

Synta will manufacture. Similarly, Plaintiff requests that Defendant be ordered to refrain from

2

sharing customer information with Synta, including information about which products customers

3

are buying at what price and in what volume. Defendant argues that each of these proposed orders

4

would impermissibly limit lawful conversations with its customer, Celestron, and force Defendant

5

to “completely re-alter its business operations.” Opp. at 5. For example, Defendant argues that

6

prohibiting it from communicating with Synta about the prices of telescopes and accessories

7

“would effectively mean Defendant can never again conduct business with Celestron.” Opp. at 6.

8
9

Defendant’s argument hinges on the fact that Plaintiff’s proposed order would prevent
Defendant from communicating with Celestron. The Court agrees with Defendant that prohibiting
communications between Defendant and its primary customer, Celestron, would burden lawful

11
United States District Court
Northern District of California

10

conduct unrelated to the underlying offense. See E. & J. Gallo Winery, 967 F.2d at 1297 (courts

12

“must insure that [an injunction] is tailored to eliminate only the specific harm alleged.”). Neither

13

party clearly defines which of the many entities involved in this case are included when they

14

reference “Synta.” The Court will order Defendant to refrain from communicating about the

15

topics outlined below with Suzhou Synta Optical Technology Co. Ltd (“Suzhou Synta”) and Synta

16

Technology Corp. (“Synta Tech”) only, so as to not unduly restrain Defendant’s communications

17

with Celestron.

18

The Court also shares Defendant’s concern that the topics about which it would be

19

prevented from communicating are overbroad. Plaintiff presented evidence at trial that Defendant

20

engaged in improper communications with certain Synta entities regarding the price of telescopes

21

and accessories, customer information, and planned production, among other topics.

22

Nevertheless, the Court can also imagine communications between Defendant and its competitors

23

about the price or sale of products that would be entirely lawful. For the sake of clarity, the Court

24

will enjoin this activity only to the extent it violates, or contributes to a violation of, antitrust laws.

25
26
27
28

Finally, the Court finds Plaintiff’s final request—that Defendant refrain from “internal
meetings or strategy sessions in which any representative from a competitor . . . is in
CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
13

1

attendance”—to be overbroad. Mot. at 10. While the jury found evidence of a conspiracy

2

between Defendant and Synta, there was no evidence to suggest that Defendant participated in any

3

conspiracy or unlawful activity with other competitors. The Court finds that Defendant should

4

only be restrained from communicating with the competitors for which Plaintiff presented

5

evidence of conspiracy. Moreover, as Defendant points out, the relief requested is unclear as to

6

what constitutes an “internal meeting or strategy session.” Opp. at 6. While Defendant should be

7

prohibited from discussing internal business strategy with certain competitors, the Court finds that

8

this result can be achieved by limiting communications instead of meetings.

9

III.

10

Conclusion and Order
Based on the foregoing reasons, Plaintiff’s motion for a permanent injunction and

United States District Court
Northern District of California

11

judgment on its UCL claim is GRANTED. Pursuant to Federal Rule of Civil Procedure 65(d), IT

12

IS HEREBY ORDERED as follows:

13

1. Defendant shall supply Meade at non-discriminatory terms for five years;

14

2. Defendant shall supply Orion at non-discriminatory terms for five years;

15

3. Defendant shall refrain from communicating with Suzhou Synta and Synta Tech,

16

about the following, to the extent such communication violates, or contributes to

17

the violation of, antitrust laws:

18

a. the prices of telescopes and accessories;

19

b. customer information, including but not limited to statistics about which

20

products Defendant’s customers are buying, how much Defendant is

21

charging for those products, and the volume of purchases from Defendant;

22

c. which products Defendant or Synta will manufacture; and

23

d. Defendant’s or Synta’s internal business strategy.

24

This Court shall retain jurisdiction over any and all issues arising from or related to the

25

enforcement of this permanent injunction, the implementation of this Order or the interpretation of

26

this Order.

27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
14

1

Because this Order represents a final resolution of all the claims against Defendant Ningbo

2

Sunny, the Court will enter Final Judgment. The parties are ordered to submit joint status reports

3

every six months regarding the progress of the related bankruptcy proceedings against defendants

4

Sunny Optics and Meade.

5
6
7
8

IT IS SO ORDERED.
Dated: April 9, 2020
______________________________________
EDWARD J. DAVILA
United States District Judge

9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

CASE NO.: 5:16-CV-06370-EJD
ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT
ON UCL CLAIM
15