United States District Court, W.D. Washington, Seattle
RICHARD A. JONES, District Judge.
This matter comes before the court on a motion for summary judgment from Defendants Au Optronics, Chi Mei, Hannstar, and LG Display. Defendants requested oral argument, but the court finds oral argument unnecessary. For the reasons stated herein, the court DENIES the motion. Dkt. # 484.
II. BACKGROUND OF MULTIDISTRICT LITIGATION
Today the court considers for the first time the merits of the price-fixing claims that Costco will soon present to a jury. The motion this order resolves concerns what the court will call the "control exception" to the general rule of Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), that only direct purchasers of price-fixed goods or services have standing to sue for federal antitrust damages. Before considering the control exception, however, the court remarks on its role in this case.
This case is one of dozens that the Judicial Panel on Multidistrict Litigation assigned to the Honorable Susan Illston in the United States District Court for the Northern District of California (the "MDL court") for coordinated pretrial proceedings. All of the MDL cases arise from a conspiracy allegedly spanning nearly a decade to fix the prices for thin-film transistor liquid crystal display panels ("TFT-LCD panels" or "panels"). There are allegedly many conspirators, and the conspirators themselves allegedly relied on a complicated web of corporate parents, subsidiaries, joint ventures, and other related entities to effectuate the conspiracies. The preceding sentences do not begin to describe the MDL court's gargantuan task. There are more than 9, 000 entries on the MDL court's docket, more than 8, 000 of which came before the MDL court suggested that the JPMDL transfer Costco's case back to this court for trial. The MDL court itself has presided over civil and criminal trials, and prepared others for trial in the courts in which they originated.
This case is among those that the MDL court prepared for trial. Costco, which opted out of participation of a class of direct purchaser plaintiffs that first sued in late 2006 and that the MDL court certified in March 2010, sued more than a dozen groups of Defendants, contending that as a result of their conspiracy, it paid too much for finished products incorporating the price-fixed TFT-LCD panels.
Defendants resisted Costco's claims vigorously in the MDL court. Defendants filed dozens of dispositive motions on a schedule that the MDL court set. In rulings on those motions, the MDL court pared Costco's claims, but did not completely resolve them. In July 2013, the JPMDL returned Costco's suit here, to the district in which it originated, for trial.
The parties initially agreed that their claims were ready for trial. After the court set a trial schedule, adopting the parties' suggestions as to deadlines for pretrial filings, Defendants changed their mind about the case's readiness for trial. They requested leave to file two summary judgment motions. Accepting as at least colorable Defendants' representations that these motions were necessary despite the MDL proceedings, the court permitted the motions.
After reviewing those motions, it seems that Defendants view this court as part trial court sequel, part court of appeals. They ask the court both to revisit the MDL court's rulings and to permit them to request summary judgment on issues that they neglected to present in dispositive motions before the MDL court. This court, however, is not the court of second chances that Defendants seem to envision. This court is continuing the MDL court's pretrial work into trial, and it will rule accordingly.
III. ANALYSIS OF CONTROL EXCEPTION MOTION
A. Illinois Brick and the Control Exception
Illinois Brick generally confers statutory standing to recover for antitrust injuries only on plaintiffs who purchase products directly from a defendant who violates the antitrust laws. Customers who buy lemonade from a neighborhood stand cannot sue farmers who conspire to fix the prices of lemons, even if they paid more for lemonade. Illinois Brick dictates that if anyone is to privately enforce the antitrust laws, it must be the direct purchasers of the price-fixed lemons - in this example the operators of the lemonade stand.
As a general rule, general rules have exceptions, and the Illinois Brick rule is no different. Among those exceptions is the control exception, which in its simplest form confers standing on an indirect purchaser who purchases goods from a direct purchaser under the control of a price fixer. If Lemons, Inc. conspires with other growers to fix lemon prices, and sells lemons to its wholly-owned subsidiary, Lemonade, Inc., customers of Lemonade can sue Lemons to recover the overcharge they paid for lemonade. Indeed, even if Lemonade buys its lemons solely from one of Lemons's conspirators (an entity with no control over Lemonade), Lemonade's customers may sue the conspirator directly because it conspired with Lemonade's corporate parent to fix lemon prices. Courts, particularly the Supreme Court, have been reluctant to carve out exceptions to the Illinois Brick rule, but one is necessary in instances like these, because there is no realistic possibility that Lemons would permit its subsidiary Lemonade to sue it or one of its conspirators. Without an exception, ...