Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05944/USCOURTS-cand-3_07-cv-05944-233/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:1 Antitrust Litigation

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

In re: CATHODE RAY TUBE (CRT) 

ANTITRUST LITIGATION

This Document Relates to:

Electrograph Systems, Inc. v. 

Technicolor SA, No. 13-cv-05724;

Alfred H. Siegel v. Technicolor 

SA, No. 13-cv-05261;

Best Buy Co., Inc. v. 

Technicolor SA, No. 13-cv-05264; 

Interbond Corporation of America 

v. Technicolor

SA, No. 13-cv-05727;

Office Depot, Inc. v. 

Technicolor SA, No.

13-cv-05726;

Costco Wholesale Corporation v. 

Technicolor SA, No. 13-cv-05723;

P.C. Richard & Son Long Island 

Corporation v. Technicolor SA, No. 13-cv-05725;

Schultze Agency Services, LLC v. 

Technicolor SA, Ltd., No. 13-cv- 05668;

Sears, Roebuck and Co. and Kmart 

Corp. v. Technicolor SA, No. 

3:13-cv-05262;

Target Corp. v. Technicolor SA, No. 13-cv-05686 

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Case No. C 07-5944 SC

MDL No. 1917

ORDER GRANTING IN PART AND 

DENYING IN PART MITSUBISHI'S

MOTION TO DISMISS SHARP'S FIRST 

AMENDED COMPLAINT

Case 3:07-cv-05944-JST Document 2439 Filed 03/13/14 Page 1 of 11
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I. INTRODUCTION

Now before the Court is Defendant Mitsubishi's1 ("Mitsubishi" 

or "Defendant") motion to dismiss various Direct Action Purchaser 

Plaintiffs' ("Plaintiffs" or "DAPs") complaints.2 ECF No. 2299 

("MTD"). The matter is fully briefed, ECF Nos. 2358-4 ("Opp'n") 

(filed under seal), 2374-4 ("Reply") (filed under seal), and 

appropriate for decision without oral argument, per Civil Local 

Rule 7-1(b). As explained below, the motion is GRANTED in part and 

DENIED in part.

II. BACKGROUND

Mitsubishi is a relatively new defendant in this case, the 

basic facts of which are familiar to all parties. The DAPs first 

named the Mitsubishi entities as defendants in November 2013, 

though in March 2013 they had sought leave from the Court to amend 

 1 "Mitsubishi" refers collectively to Mitsubishi Electric US, Inc., 

f.k.a. Mitsubishi Electric & Electronics, USA, Inc.; Mitsubishi 

Electric Corporation; and Mitsubishi Electric Visual Solutions 

America, Inc.

2 Mitsubishi specifically moves to dismiss the complaints in the 

following actions: Best Buy Co, Inc. v. Technicolor SA, No. 13-cv- 05264; Siegel v. Technicolor SA, No. 13-cv-00141; Costco Wholesale 

Corp. v. Technicolor SA (f/kla Thomson SA) et al., No. 13-cv-05723; 

Electrograph Systems, Inc. v. Technicolor SA, No. 2: 13-cv-05724; 

Interbond Corp. of Am. v. Technicolor SA, No. 13-cv-05727;

Office Depot, Inc. v. Technicolor SA, No. 13-cv-05726; P.C. Richard 

& Son Long Island Corp. v. Technicolor SA, No. 13-cv-05725; Sears, 

Roebuck & Co. v. Technicolor SA, No. 13-cv-05262; Schultze Agency 

Services, LLC v. Technicolor SA, No. 13-cv-05668; and Target Corp. 

v. Technicolor SA, No. 13-cv-05686. Two other cases purport to 

name Mitsubishi as defendants, but these plaintiffs have not 

previously requested leave to amend, nor have they served their 

amended complaints on any Mitsubishi entity: Tech Data

Corp. et al. v. Hitachi, Ltd. et al., No. 13-cv-00157 (Sept. 9, 

2013), ECF No. 1911; Dell Inc. et al. v. Hitachi, Ltd. et al., No. 

3:13-cv-02171, (Jun. 10, 2013), ECF No. 1726.

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their initial complaints to include Mitsubishi Electric. ECDF Nos. 

1609, 1610. The Court denied that motion on September 26, 2013, 

because at the time, Plaintiffs had presented no compelling reason 

as to why Mitsubishi should be part of this case. See ECF No. 1959 

("Order Denying Amendment"). Mitsubishi had never been indicted in 

the United States or anywhere else, had never received a grand jury 

subpoena in any investigation, and had never even been the subject 

of any government investigation into CRT price-fixing. Further, 

Mitsubishi had last been alleged to have participated in the CRT 

conspiracy in 2004, though it had exited the market for color 

picture tubes ("CPTs," which are used in televisions) in 1998 and 

stopped shipping color display tubes ("CDTs," which are used in 

computer monitors) to the United States in September 2003. Since 

Mitsubishi asserts that its role in the CRT market was very small, 

and since it was a purchaser of CRTs itself, Mitsubishi contends 

that it should not be part of this case: after all, according to 

Mitsubishi, its participation in the overall market was de minimis, 

and it would not have participated in a conspiracy that caused it 

to pay higher prices. See MTD at 2-3.

Mitsubishi accordingly moves to dismiss the DAPs' complaints, 

arguing first that laches applies because the DAPs have possessed 

the relevant information for some time, they unreasonably delayed 

filing their complaints against Mitsubishi, causing Mitsubishi 

prejudice by forcing it to enter long-running, complex litigation 

at a very late date. Mitsubishi argues further that if the Court 

does not find that laches bars the DAPs' complaints, they are still 

untimely per all relevant statutes of limitations and are not 

tolled by any tolling doctrine. 

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III. LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 

12(b)(6) "tests the legal sufficiency of a claim." Navarro v. 

Block, 250 F.3d 729, 732 (9th Cir. 2001). "Dismissal can be based 

on the lack of a cognizable legal theory or the absence of 

sufficient facts alleged under a cognizable legal theory." 

Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 

1988). "When there are well-pleaded factual allegations, a court 

should assume their veracity and then determine whether they 

plausibly give rise to an entitlement to relief." Ashcroft v. 

Iqbal, 556 U.S. 662, 664 (2009). However, "the tenet that a court 

must accept as true all of the allegations contained in a complaint 

is inapplicable to legal conclusions. Threadbare recitals of the 

elements of a cause of action, supported by mere conclusory 

statements, do not suffice." Id. at 678 (citing Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 555 (2007)). The allegations made in a 

complaint must be both "sufficiently detailed to give fair notice 

to the opposing party of the nature of the claim so that the party 

may effectively defend against it" and "sufficiently plausible" 

such that "it is not unfair to require the opposing party to be 

subjected to the expense of discovery." Starr v. Baca, 652 F.3d 

1202, 1216 (9th Cir. 2011).

Claims sounding in fraud are subject to the heightened 

pleading requirements of Federal Rule of Civil Procedure 9(b), 

which requires that a plaintiff alleging fraud "must state with 

particularity the circumstances constituting fraud." See Kearns v. 

Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009). "To satisfy 

Rule 9(b), a pleading must identify the who, what, when, where, and 

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how of the misconduct charged, as well as what is false or 

misleading about [the purportedly fraudulent] statement, and why it 

is false." United States ex rel Cafasso v. Gen. Dynamics C4 Sys., 

Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (internal quotation marks 

and citations omitted).

IV. DISCUSSION

A. Laches

Laches is an equitable time limitation on a party's right to 

bring suit that requires a showing of (1) unreasonable delay in 

filing the suit and (2) prejudice to Defendant. Jarrow Formulas, 

Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002). A 

laches defense raised at the motion to dismiss posture requires 

exclusive reliance on the factual allegations in the complaint. 

Kourtis v. Cameron, 419 F.3d 989, 1000 (9th Cir. 2005), overruled 

on other grounds, Taylor v. Sturgell, 553 U.S. 880 (2008). Courts 

have noted that this requirement poses a nearly insurmountable 

obstacle to the favorable resolution of a defendant's factdependent laches claim at the pleadings stage. See Mishewal Wappo 

Tribe of Alexander Valley v. Salazar, No. 09-cv-02502-EJD, 2011 WL 

5038356, at *7 (N.D. Cal. Oct. 24, 2011); Italia Marittima, S.P.A. 

v. Seaside Transp. Servs., LLC, No. C-10-0803-PJH, 2010 WL 3504834, 

at *6 (N.D. Cal. Sept. 7, 2010). 

In considering the complaints, it is difficult not to find 

some delay -- especially given the Order Denying Amendment -- but 

new facts have arisen since the Court considered the DAPs' motion 

for leave to add Mitsubishi as a defendant. The previous request 

and proposed complaints were all factually deficient, but the facts 

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and the DAPs' arguments have changed at this point. 

One defendant in this case recently gave extensive details 

regarding Mitsubishi's participation in the conspiracy, which had, 

until November 2013, been kept secret. The defendant stated very 

specifically that Mitsubishi executives participated directly in 

the conspiracy, and that they agreed to keep their participation 

secret, including by using coded references to the participating 

companies. See, e.g., ECF No. 2279-6 ("BrandsMart FAC") (filed 

under seal) ¶¶ 144-45. This late-arising evidence weighs against 

finding laches at this point, which the Court is not inclined to do 

in any event, given the lack of a strong factual record concerning 

these parties at this point. See Sensible Foods, LLC v. World 

Gourmet, Inc., No. 11-2819 SC, 2011 WL 5244716, at *5 (N.D. Cal. 

Nov. 3, 2011). Mitsubishi can, of course, raise laches at a later 

point, when the record is more developed.

B. Tolling Doctrines Apply for the DAPs' Federal Claims

The doctrine of fraudulent concealment focuses on actions that 

a defendant took to prevent a plaintiff from learning of grounds 

for filing a suit. See Lukovsky v. City & Cnty. of S.F., 535 F.3d 

1044, 1051 (9th Cir. 2008). To invoke the doctrine, plaintiffs 

must allege facts demonstrating that they could not have discovered 

the alleged violations by exercising reasonable diligence. 

Rosenfeld v. JPMorgan Chase Bank N.A., 732 F. Supp. 2d 952, 964 

(N.D. Cal. 2010). A fraudulent concealment claim must be alleged 

with particularity under Rule 9(b). Noll v. eBay, Inc., 282 F.R.D. 

462, 468 (N.D. Cal. 2012).

The Court finds that the DAPs' complaints have sufficiently 

pled fraudulent concealment until November 14, 2007, the latest 

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date this Court has held to provide actual or inquiry notice to the 

DAPs. See In re Cathode Ray Tube (CRT) Antitrust Litig., No. C-07-

5944, 2013 WL 4505701, at *3 (N.D. Cal. Aug. 21, 2013); see also In 

re Rubber Chems. Antitrust Litig., 504 F. Supp. 2d 777, 789 (N.D. 

Cal. 2007) ("[I]t is generally inappropriate to resolve the factintensive allegations of fraudulent concealment at the motion to 

dismiss stage, particularly where the proof relating to the extent 

of the fraudulent concealment is alleged to be largely in the hands 

of the alleged conspirators."). However, given their late filing 

date, this still renders their claims time-barred unless they are 

able to invoke a tolling doctrine or some equivalent that would 

cover the time period from November 14, 2007 to the filing of the 

present complaints. The Court is not persuaded by Mitsubishi's 

arguments that it withdrew from the CRT business by 2005, if not 

later, since that is a fact-sensitive dispute not suitable to 

resolution at this posture. Similarly, the Court declines to find 

that any fraudulent concealment ceased prior to November 14, 2007, 

since the DAPs' allegations make clear that Mitsubishi worked to 

hide its involvement in the conspiracy throughout all relevant 

times.

i. American Pipe Tolling

American Pipe & Const. Co. v. Utah, 414 U.S. 538 (1974), held 

that commencement of a class action suspends the statute of 

limitation as to all putative members of the class up to and until 

class certification is denied or the plaintiff opts out of the 

class. Id. at 554; Williams v. Boeing Co., 517 F.3d 1120, 1136 

(9th Cir. 2008); Emp'rs-Teamsters Local Nos. 175 & 505 Pension 

Trust Fund v. Anchor Capital Advisors, 498 F.3d 920, 925 (9th Cir. 

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2007). "Tolling is fair in such a case because when the complaint 

is filed defendants have notice of the 'substantive claims being 

brought against them.'" Williams, 517 F.3d at 1136 (quoting Crown, 

Cork & Seal Co. v. Parker, 462 U.S. 345, 352-53 (1983)). 

Mitsubishi was not a defendant in any of the previously filed 

cases. This is enough for the Court to hold American Pipe tolling 

inapplicable in this case. See Biotech. Value Fund, L.P. v. Celera 

Corp., -- F. Supp. 2d --, 2013 WL 6731900, at *8 (N.D. Cal. Dec. 

20, 2013) (not applying American Pipe to a defendant not named in 

any putative class action); Tech Data Corp. v. AU Optronics Corp., 

No. 07-MD-1827, 2012 WL 3236065, at *5 (N.D. Cal. Aug. 6, 2012) 

(same). The DAPs argue that the Court should apply American Pipe

tolling anyway, contending that this would comport with the spirit 

of American Pipe and equitable tolling doctrines. Opp'n at 13-14. 

The Court is not convinced: the parts of American Pipe that the 

DAPs quote refer to the protection of "all asserted members of the 

class who would have been parties had the suit been permitted to 

continue as a class action," but this refers to plaintiffs, not 

defendants -- rightly so, since the point of American Pipe tolling 

is partly to preserve the interests of plaintiffs who would have 

claims against certain defendants, partly to prevent a rush to the 

courthouse by plaintiffs seeking to preserve their individual 

claims in the event of class claim denials, and partly to provide 

notice to defendants against whom claims are tolled. See American 

Pipe, 414 U.S. at 553-54. The Court will not make new law on this 

point: Mitsubishi is a new defendant, and American Pipe tolls no 

claims against it. 

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The only remaining question is whether any other tolling 

doctrine applies as to any of Mitsubishi's state or federal claims.

ii. Governmental Action

Sharp argues that its claims are also tolled by 15 U.S.C. §

16(i), which reads: 

Whenever any civil or criminal proceeding is instituted 

by the United States to prevent, restrain, or punish 

violations of any of the antitrust laws, but not 

including an action under section 15a of this title, the 

running of the statute of limitations in respect to 

every private or State right of action arising under 

said laws and based in whole or in part on any matter 

complained of in said proceeding shall be suspended 

during the pendency thereof and for one year thereafter . . . .

In concurrently filed orders on other motions to dismiss, the Court 

notes that § 16(i) tolls only federal claims, not state claims. 15 

U.S.C. § 12 (stating that the statute only applies to an express 

list of federal laws); Nashville Milk Co. v. Carnation Co., 355 

U.S. 373, 376 (1958) ("[T]he definition contained in [Section] 1 of 

the Clayton Act is exclusive. Therefore it is of no moment . . . 

that [a statute] may be colloquially described as an 'anti-trust' 

statute."). However, New York's Donnelly Act includes a provision 

modeled after § 16(i), which applies to the same degree if the 

Court finds governmental action tolling per § 16(i).

The Court finds that § 16(i) tolling applies based on the open 

indictments in this case. It is undisputed that one criminal 

matter, pending between March 18, 2011 until its closure in August 

30, 2012, tolls claims under § 16(i) for that time period plus a 

year. See Reply at 12-13. A "comparison of the two complaints on 

their face[s]" shows in this case that there is a significant 

overlap between the two actions, such "that the matters complained 

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of in the government suit bear a real relation to the private 

plaintiff's claim for relief." Leh v. Gen. Petro. Grp., 382 U.S. 

54, 59 (1965). 

However, Mitsubishi argues that the other indictments, opened 

around February 2009 and still pending, should not be applied to 

toll the DAPs' claims under § 16(i). Mitsubishi contends that 

permitting tolling based on those indictments would contravene both 

the purposes of government-action tolling and the purposes of 

statutes of limitation in general. See id. at 13-14. As noted in 

concurrently filed orders, the Court disagrees. Based on J.M. 

Dungan v. Morgan Drive-Away, Inc., 570 F.2d 867 (9th Cir. 1978), 

tolling under § 16(i) begins at least at the indictment stage, 

though that case had the benefit of at least one completed criminal 

case. As Mitsubishi notes, Dungan's holding was, in part, that 

empanelling a grand jury did not "institute" proceedings, but 

contrary to Mitsubishi's reading of Dungan, the Ninth Circuit's 

holding was in fact based on the court's reasoning that the return 

of a grand jury indictment fits the statutory language of § 16(i) 

more comfortably than empanelling alone would, since the purpose of 

an indictment is the prevention, restraint, or punishment of 

antitrust violations. 

The Court declines to adopt Mitsubishi's arguments that 

equitable doctrines or alternative views of a criminal proceeding 

should apply here to require the Court to consider the open 

indictments effectively closed. As noted in other orders, filed 

concurrently, the Court cannot presume, as Mitsubishi and other 

Defendants do, that those open (but in some cases unassigned) 

criminal cases should be ignored for tolling purposes. The Court 

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finds that the DAPs' federal and New York Donnelly Act claims are 

tolled from February 10, 2009 to the present.

V. CONCLUSION

As explained above, the DAPs' state law claims are DISMISSED 

WITH PREJUDICE, except their Donnelly Act claims, which remain in 

the case. All federal claims are undisturbed.

IT IS SO ORDERED.

Dated: March 13, 2014

UNITED STATES DISTRICT JUDGE

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