Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05944/USCOURTS-cand-3_07-cv-05944-229/pdf.json

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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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:

Sharp Electronics Corp. v. 

Hitachi Ltd., No. 12-cv-1173-SC

)

)

)

)

)

)

)

)

)

)

)

)

Case No. C 07-5944 SC

MDL No. 1917

ORDER GRANTING TOSHIBA'S MOTION 

TO DISMISS SHARP'S FIRST 

AMENDED COMPLAINT

I. INTRODUCTION

Now before the Court is Toshiba's1 motion to dismiss Sharp's

first amended complaint.2 ECF No. 2030 ("FAC") (filed under seal). 

The motion is fully briefed. ECF Nos. 2000 ("MTD"), 2195

("Opp'n"), 2229 ("Reply").3 The Court finds it appropriate for 

 1 The Toshiba Defendants are Toshiba Corporation, Toshiba America 

Information Systems, Inc., and Toshiba America Electronic 

Components, Inc.

2 "Sharp" and "Plaintiffs" collectively refers to Plaintiffs Sharp 

Electronics Corporation and Sharp Electronics Manufacturing of 

America, Inc. Toshiba's motion first referred to Sharp's original 

complaint, but the parties stipulated that all briefing would refer 

to the FAC.

3 Toshiba amended its motion, with the Court's leave, to accord 

with the Supreme Court's ruling that procedural motions to dismiss 

complaints based on forum-selection clauses are to be based on the 

doctrine of forum non conveniens and Rule 12(b)(6) of the Federal 

Rules of Civil Procedure -- not, per prior Ninth Circuit procedure, 

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 1 of 10
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

resolution without oral argument, Civ. L.R. 7-1(b), and GRANTS it.

II. BACKGROUND

The parties are familiar with the general facts of this case, 

which is an antitrust action concerning the alleged price-fixing of 

cathode-ray tubes ("CRTs"). A brief factual summary relevant to 

the instant motion follows.

Plaintiff Sharp Electronics Corporation is based in New 

Jersey, and Plaintiff Sharp Electronics Manufacturing Company of 

America, Inc. is based in California. They allege that Toshiba

manufactured, marketed, sold, or distributed CRT Products in the 

United States, either directly or through subsidiaries or 

affiliates. Plaintiffs allege that Toshiba participated in an 

international conspiracy to fix the prices of CRTs. Plaintiffs

state that they bought price-fixed CRT Products "directly from 

Defendants and co-conspirators, and/or Defendants' and coconspirators' subsidiaries and affiliates, and/or any agents 

controlled by Defendants, Defendants' subsidiaries and affiliates, 

co-conspirators or co-conspirators' affiliates," as well as from 

original equipment manufacturers ("OEMs") and other suppliers. 

The two parties' Japan-based parent corporations -- Tokyo 

Shibaura Electric Corporation and Sharp Corporation -- entered an 

agreement, the "Basic Transaction Agreement" or "BTA," that is 

crucial to this dispute. MTD Attach. 3 ("BTA") (filed under 

 

Rule 12(b)(3). Sharp filed a response to this amended motion, 

adding some detail to their opposition. ECF No. 2292. Toshiba 

then filed another supplemental reply to their brief, again with 

the Court's leave, ECF No. 2336, and Sharp responded to that as 

well. ECF No. 2352.

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 2 of 10
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

seal).4 Under the BTA, Sharp Corporation is "Party A," and Tokyo 

Shibaura is "Party B." Id. Preamble & Art. 1(2). The BTA 

expressly applies to all "individual Agreements" between Parties A 

and B, "to the extent that there is no special Agreement." Id.

Art. 1(2). The BTA includes a short forum-selection clause: "In 

terms of litigation related to this Agreement or the individual 

Agreement, the Osaka District Court shall be the court of competent 

jurisdiction." Id. Art. 21(2). 

Toshiba now moves to dismiss this action, arguing that the 

BTA's forum-selection clause requires this action to be litigated 

in Japan. 

III. DISCUSSION

Toshiba originally brought its motion to dismiss under Rule 

12(b)(3) -- improper venue -- but has amended its motion to dismiss 

to rely on Rule 12(b)(6) and the doctrine of forum non conveniens

instead, comporting with a recent Supreme Court holding that Rule 

12(b)(3) is not the proper mechanism for enforcing a forumselection clause. See Atl. Marine Const. Co., Inc. v. U.S. Dist. 

Ct. for W. Dist. of Tex., 134 S. Ct. 568, 580 (2013). Atlantic 

Marine held that 28 U.S.C. § 1404(a)5 and the forum non conveniens 

doctrine provide appropriate mechanisms for enforcing forumselection clauses. Neither party's substantive arguments changed 

 4 While the BTA and its certified translation filed under seal, the 

parties frequently quote it in their unsealed papers. The Court 

likewise disregards the seal.

5 "Section 1404(a) is merely a codification of the dotrine of forum 

non conveniens for the subset of cases in which the transferee 

forum is within the federal court system." Atl. Marine, 134 S. Ct. 

at 580.

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 3 of 10
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

pursuant to this amendment. Since this case does not involve a 

transferee forum within the federal court system -- the putative 

transferee court is in Japan -- section 1404(a) does not apply 

here, so Toshiba's motion can only be based on forum non conveniens 

doctrine concerning forum-selection clauses. Absent further 

guidance, the Court continues to apply the Ninth Circuit's standard 

of review from Rule 12(b)(3) cases on this motion, drawing 

reasonable inferences and resolving factual conflicts in favor of 

the non-movant, but not necessarily accepting the non-movant's 

pleadings as true, and also considering facts outside the 

pleadings. Petersen v. Boeing Co., 715 F.3d 276, 279 (9th Cir. 

2013). 

In diversity cases, federal courts apply federal law in 

determining the enforceability of forum-selection clauses. 

Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 513 (9th 

Cir. 1988). Contractual forum-selection clauses are prima facie 

valid and therefore enforceable absent a strong showing that 

"enforcement would be unreasonable or unjust, or that the clause 

[is] invalid for such reasons as fraud or overreaching." M/S 

Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 15 (1972). "The 

party seeking to avoid the forum-selection clause bears 'a heavy 

burden of proof.'" Richards v. Lloyd's of London, 135 F.3d 1289, 

1294 (9th Cir. 1988) (en banc) (quoting Bremen, 407 U.S. at 17). 

The policy of enforcing forum-selection clauses remains strong in 

the international commercial context: as the Ninth Circuit has 

stated, "[t]he expansion of American business and industry will 

hardly be encouraged if, notwithstanding solemn contracts, we 

insist on a parochial concept that all disputes must be resolved 

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 4 of 10
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

under our laws and in our courts." TAAG Linhas Aereas de Angola v. 

Transamerica Airlines, Inc., 915 F.2d 1351, 1354 (9th Cir. 1990). 

 Federal courts have recognized three grounds for declining 

to enforce a forum-selection clause: (1) if the inclusion of the 

clause in the contract was the result of "fraud or overreaching"; 

(2) if the party seeking to avoid the clause would be effectively 

deprived of its day in court in the forum specified in the clause; 

or (3) if enforcement would contravene a strong public policy of 

the forum in which the suit is brought. Murphy v. Schneider Nat'l, 

Inc., 362 F.3d 1133, 1140 (9th Cir. 2004). 

Sharp contends that the forum-selection clause in the BTA 

neither governs the present dispute nor mandates dismissal for any 

reason, because (1) the two Sharp Plaintiffs are not parties to or 

bound by the BTA, (2) the Sharp Plaintiffs' claims do not relate to 

the BTA, and (3) enforcing the BTA's forum-selection clause would 

violate public policy.

Sharp is wrong on all counts. Sharp first contends that the 

two Sharp Plaintiffs are not parties to the BTA, and that "[i]t 

goes without saying that a contract cannot bind a nonparty." Opp'n 

at 5-6 (quoting EEOC v. Waffle House, Inc., 534 U.S. 279, 294 

(2002)). Sharp argues that the face of the BTA proves that it was 

not intended to bind any non-signatories, because only Sharp 

Corporation and Tokyo Shibaura -- not subsidiaries or affiliates --

are listed in the preamble. Id. (citing GECCMC 2005-C1 Plummer St. 

Office Ltd. P'ship v. JPMorgan Chase Bank, N.A., 671 F.3d 1027, 

1033 (9th Cir. 2012); Klamath Water Users Protective Ass'n v. 

Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999)). Sharp also seeks 

to support its argument with a secondary source, the deposition of 

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 5 of 10
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

a Sharp Corporation employee, but because the parties agree that 

the BTA is not ambiguous, the Court need not and cannot evaluate 

that evidence. Pierce Cnty. Hotel Emps. & Rest. Emps. Health Trust 

v. Elks Lodge, B.P.O.E. No. 1450, 827 F.2d 1324, 1327 (9th Cir. 

1987) (extrinsic evidence is inadmissible to contradict clear 

contract terms). 

Sharp's authority is inapposite: the Ninth Circuit recognizes 

the quotation from EEOC v. Waffle House, Inc. as dicta, noting that 

if taken literally it would "jettison hundreds of years of common 

law under which nonparties can be contractually liable under 

ordinary contract and agency principles." Comer v. Micor, Inc., 

436 F.3d 1098, 1104 n.10 (9th Cir. 2006) (Kozinski, J.). Sharp's 

other authority concerns third-party beneficiary doctrine, which is 

different from the present situation in that the parties' intent to 

cover non-signatories is the central question. See Klamath Water 

Users, 204 F.3d at 1210 (discussing third-party beneficiary 

doctrine). Rather, on the face of the BTA, Tokyo Shibaura and 

Sharp Corporation explicitly agree to handle all litigation related 

to the BTA, which includes individual Agreements (and purchase 

orders), in Osaka District Court. BTA Art. 21(2). In this case, 

the Ninth Circuit has held that forum-selection clauses will apply 

to non-signatories "where the alleged conduct of the non-parties is 

closely related to the contractual relationship." Holland Am.

Line, Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 456 (9th Cir. 

2007). In this case, because any relationship between the Sharp 

Plaintiffs and Toshiba took place "as part of the larger 

contractual relationship" between the two parent companies, the BTA 

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 6 of 10
7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

and its forum-selection clause should be read to apply to the 

subsidiaries. Id.; see also Manetti-Farrow, 858 F.2d at 511.

Second, Sharp is wrong that its claims do not relate to the 

BTA. Sharp correctly states that the term "related to" must 

involve the agreement itself to trigger a forum-selection clause 

governing litigation related to a contract. See Opp'n at 7-8 

(citing cases). But Sharp is wrong that the BTA governs only 

Japanese transactions, and that the Purchase Orders it cites, see

id. Attach. 1, Ex. A ("PO"), are the real governing agreements (or 

that they are inconsistent with the BTA and should override it). 

On Sharp's first point, the BTA is not so limited. It clearly 

states that it establishes "the basic terms and agreements related 

to the manufacture and supply of goods." BTA Preamble. Further, 

it also governs "individual Agreements," which are "established 

upon the delivery of the purchase order describing the details of 

[transactions related to the parties' goods] by Party A and upon 

delivery of the order confirmation by Party B." BTA Art. 2. The 

Court finds that orders like Sharp's PO are related to the BTA by 

the contract's terms themselves. 

In such a case, the forum-selection clause of the master 

agreement could be limited in application if it were true -- as 

Sharp argues -- that the secondary agreement contained an 

integration clause that foreclosed the master agreement's 

application, or perhaps if the two contracts were inconsistent. 

See Sharp Opp'n at 8 (citing PO ¶¶ 3 (integration clause), 5 

(inspection provisions), 6 (indemnity provisions), 11 (transfer of 

rights and obligations provisions), 13 (choice of law provisions)). 

However, the BTA and PO are not exclusive: Article 2 of the BTA 

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 7 of 10
8

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

states that the BTA covers individual Agreements, and none of the 

provisions of the PO is a forum-selection clause. The PO includes 

an integration clause reading, "This Order shall constitute the 

entire agreement between the Seller and the Buyer and no other 

understanding shall limit modify or vary its terms [sic] unless 

reduced to writing." PO ¶ 3. This does not preclude application 

of the BTA's forum-selection clause because the PO includes no such 

term -- it includes a choice of law provision, but choice-of-law 

provisions are distinct from forum-selection clauses. See

Hartstein v. Rembrandt IP Solutions, LLC, No. 12-2270 SC, 2012 WL 

3075084, at *6 (N.D. Cal. July 30, 2012) (quoting Besag v. Custom 

Decorators, Inc., No. 08-05463 JSW, 2009 WL 330934, at *4 (N.D. 

Cal. Feb. 10, 2009)). 

In any event, Sharp's claims are based partly on its corporate 

relationship with Sharp Corporation, a party to the BTA. See FAC 

¶¶ 22-23. And as the parties discuss in their supplemental briefs, 

filed under seal, the Sharp Plaintiffs' purchases that form the 

basis of their antitrust claims against Toshiba were made from 

Sharp Corporation. The Court therefore finds that Sharp's claims 

relate to and have their genesis in the BTA between Sharp 

Corporation and Tokyo Shibaura. 

Finally, the Court finds that enforcing the BTA's forumselection clause would not violate public policy. Sharp first 

contends that the Osaka District Court would lack jurisdiction over 

the antitrust claims at issue in this case, because the Japanese 

court would hold the forum-selection clause applicable only to the 

parent corporations, not to the subsidiaries and affiliates. See

Opp'n at 12-13 (citing Opp'n Attach. 3 ("Yamamoto Decl.") ¶¶ 3-5). 

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 8 of 10
9

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

Sharp's declarant, a Japanese attorney, states that he is unaware 

of cases in which Japanese courts have applied forum-selection 

clauses to non-signatories, including subsidiaries or affiliates. 

Yamamoto Decl. ¶ 5. The Court finds this argument insufficient: it 

does not suggest that the Japanese court would not actually have 

jurisdiction over the parties or that the parties are without 

recourse in the forum-selection clause's designated court. It only 

states that the Japanese Court might not hear the parties' United 

States antitrust claims, an argument the Ninth Circuit has rejected 

on the grounds that foreign fora's remedies need not be identical

to those in the United States. See Simula, Inc. v. Autoliv, Inc., 

175 F.3d 716, 723 (9th Cir. 1999). The standard here is whether 

the transferee court's law would be so deficient that plaintiffs 

would be deprived of "any reasonable recourse," and the Court does 

not find that Sharp's argument or declaration meets that standard. 

Richard's v. Lloyd's of London, 135 F.3d 1289, 1295 (9th Cir. 1988) 

(en banc). Sharp never argues that Sharp Corporation, the parent, 

would be deprived of the ability to sue on behalf of its 

subsidiaries or affiliates. 

Likewise, Sharp's argument that the Japanese court would not 

permit treble damages is deficient. As noted, the Ninth Circuit's 

standard is not that remedies must be identical -- rather, the 

plaintiff must lack any reasonable recourse. Id. Mr. Yamamoto 

states that plaintiffs can recover only actual damages, not 

punitive damages. Yamamoto Decl. ¶ 6. The Court does not find 

this sufficient to render application of the forum-selection clause 

contrary to public policy. Simula, 175 F.3d at 723. Sharp cites a 

statement from Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 9 of 10
10

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

Inc., 473 U.S. 614 (1985), as support here: " [I]n the event the 

choice-of-forum and choice-of-law clauses operated in tandem as a 

prospective waiver of a party's right to pursue statutory remedies 

for antitrust violations, we would have little hesitation in 

condemning the agreement as against public policy." Id. at 637 

n.19. The Ninth Circuit has repeatedly held that this footnote is 

non-binding dicta. Simula, 175 F.3d at 723 (citing Richards, 135 

F.3d at 1295); Meras, 2013 WL 146341, at *14. The proper standard 

remains whether a plaintiff is deprived of reasonable recourse, and 

as above, the Court finds that Sharp has not demonstrated such a 

lack here: despite the unavailability of treble damages, Sharp 

maintains that actual damages could be available to it, which does 

not evince a lack of reasonable recourse in the Japanese court 

system. See Richards, 135 F.3d at 1296.

IV. CONCLUSION

As explained above, the Toshiba Defendants' motion to dismiss 

the Sharp Plaintiffs' first amended complaint is GRANTED. The 

complaint is DISMISSED WITH PREJUDICE.

IT IS SO ORDERED.

Dated: March 13, 2014

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-05944-JST Document 2435 Filed 03/13/14 Page 10 of 10