Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05944/USCOURTS-cand-3_07-cv-05944-258/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

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MDL No. 1917

Case No. CV 07-5944 SC

ORDER GRANTING SHARP'S MOTION 

FOR LEAVE TO AMEND

This Document Relates to:

Sharp Elecs. Corp. v. Hitachi, 

Ltd., No. 13-cv-01173;

I. INTRODUCTION

Now before the Court is Plaintiffs Sharp Corporation and Sharp 

Electronics Manufacturing Company of America's (collectively, 

"Sharp") motion for leave to file an amended complaint. ECF No. 

2520 ("Mot.") (filed under seal). The Toshiba Defendants

("Toshiba") oppose the motion. ECF Nos. 2538 ("Opp'n"), 2547 

("Reply").1

 Per Civil Local Rule 7-1(b), the Court finds the 

 1 Toshiba also asks for leave to file a surreply, ECF No. 2553, 

which Sharp opposes, ECF No. 2563. The Court GRANTS Toshiba's 

motion, but does not find either party's surreply brief

dispositive.

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motion suitable for decision without oral argument and GRANTS it, 

as explained below.

II. BACKGROUND

Sharp's Complaint and First Amended Complaint alleged various 

antitrust and unfair competition claims against Toshiba, seeking 

damages based on both Sharp's purchases from Toshiba and Toshiba's 

joint and several liability as a co-conspirator defendant. 

Toshiba's sales to Sharp represent a fairly large sum, but the 

amount of the other defendants and co-conspirators' sales to Sharp 

is far larger. Toshiba moved to dismiss Sharp's claims under Rule 

12(b)(3) in October 2013,2 and before the Court considered the 

motion, the Supreme Court clarified that motions to dismiss based 

on forum-selection clauses -- like Toshiba's motion to dismiss --

were to be evaluated not under Rule 12(b)(3) but under forum non 

conveniens doctrine. Atl. Marine Const. Co.., Inc. v. U.S. Dist. 

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

the parties discussed that doctrinal change, the Court evaluated 

Toshiba's motion to dismiss.

That motion was based on an agreement that Sharp and Toshiba's 

Japanese parent companies had entered: the Basic Transaction 

Agreement ("BTA"). See MTD at 1. The Court held that the BTA 

bound Sharp and Toshiba so far as it concerned cathode ray tube 

("CRT") purchases they made from each other -- the commerce that 

forms the basis of this MDL -- and dismissed with prejudice Sharp's 

claims against Toshiba under the BTA's forum-selection clause, 

which stated that litigation related to purchase orders under the 

 2 ECF Nos. 2000 ("MTD"), 2195 ("MTD Opp'n"), 2229 ("MTD Reply").

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BTA was to be conducted in Japan. ECF No. 2435 ("Mar. 13 Order").

Sharp does not challenge the Court's dismissal of its claims 

based on Toshiba's sales to Sharp. Rather, Sharp's present motion 

to amend is based on the fact that neither Sharp, Toshiba, nor the 

Court stated whether Sharp's claims against Toshiba based on joint 

and several liability were to remain in the case. The March 3 

Order dismissed Sharp's claims, though it only discussed dismissal 

relative to the BTA, so the question of joint and several liability 

never arose. Sharp asks for leave to amend its complaint to 

specify that it is only bringing claims for joint and several 

liability against Toshiba. Sharp contends that these claims are 

not covered by the BTA and could not have been dismissed per the 

forum-selection clause, which was the only matter the parties 

briefed. Toshiba opposes the motion, arguing that even though 

neither it nor Sharp addressed joint and several liability, all 

claims against it (including those for joint and several liability) 

must have been dismissed in the Court's March 13 Order.

III. LEGAL STANDARD

After a party has amended a pleading once as a matter of 

course, it may only amend further if it obtains leave of the court. 

Fed. R. Civ. P. 15(a).3

 Rule 15 advises the court that "leave 

 3 Sharp notes that before a dismissal is made final under Rule 

54(b), Rule 15 is the appropriate standard for governing leave to 

amend, even when a dismissal was with prejudice. The Court agrees, 

because the Court has not certified any judgments under Rule 54. Toshiba procedurally objects on other grounds, also contending that 

Sharp's motion is a disguised motion for reconsideration, but the 

Court does not agree. As discussed in this Order, the posture of 

the case suggests that a nuanced consideration under Rule 15 is 

appropriate, and the Court declines to interpret Sharp's Rule 15 

motion as something other than what both parties ultimately agree 

that it is.

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shall be freely given when justice so requires," and the Ninth 

Circuit instructs that this policy is "to be applied with extreme 

liberality." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 

1051 (9th Cir. 2003) (quoting Owens v. Kaiser Found. Health Plan, 

Inc., 244 F.3d 708, 712 (9th Cir. 2001) (additional quotations 

omitted)). The Supreme Court offers additional guidance to 

district courts in deciding whether to grant leave to amend:

In the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the 

part of the movant, repeated failure to cure 

deficiencies by amendments previously allowed, undue 

prejudice to the opposing party by virtue of allowance 

of the amendment, futility of amendment, etc. -- the 

leave sought should, as the rules require, be "freely 

given."

Foman v. Davis, 371 U.S. 178, 182 (1962). Consideration of 

prejudice to the opposing party carries the greatest weight, but 

absent that or a strong showing of any remaining Foman factor, Rule 

15(a) carries a presumption in favor of granting leave to amend. 

Eminence Capital, 316 F.3d at 1052. 

IV. DISCUSSION

Sharp argues that though the dismissal was with prejudice, the 

Court should grant it leave to amend under Rule 15, primarily

because neither party briefed the issue of joint and several 

liability, and granting leave to amend on that issue would serve

substantial justice. See Reply at 11-14. From there the parties 

argue over who should have raised the issue, based on who should 

have remembered its import from separate but similar disputes 

regarding arbitration clauses. Both parties are acquainted with 

older motions in this case, in which the parties (Toshiba, in one 

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such dispute) argued over whether to separate conspiracy-related

joint and several liability claims from direct-purchaser claims in 

motions to compel arbitration.

This dispute appears to hinge on an assessment of whether 

Toshiba should have pointed out the missing issue to Sharp, as 

opposed to Toshiba's enjoying the benefit of Sharp's omission and 

then claiming waiver. The Court declines to entertain that line of 

argument, finding that the liberal standard of Rule 15, subject to 

the Foman factors, governs the Court's resolution of this matter. 

Accordingly, the question for the present motion is whether 

Sharp is entitled to amend its complaint per the Foman factors. 

Toshiba argues that Sharp's proposed amendment is futile, either 

because the BTA committed the joint and several claims to the 

jurisdiction of the Osaka District Court, or because the forum non 

conveniens doctrine would render the claim futile independently of 

the BTA.

A. The Foman Factors

Toshiba's brief appears to contest only the futility factor of 

Foman. As a threshold matter, the Court agrees that the other 

Foman factors are not at issue. First, Toshiba's long involvement 

in this litigation does not raise questions of prejudice, 

especially since Sharp's proposed amendment does not raise novel 

issues in this case. Second, the Court does not find that Sharp's 

prompt Rule 15 motion evinces bad faith or undue delay. Finally, 

Sharp's prior amendments did not concern this particular issue, so 

this is not a matter of Sharp repeatedly failing to cure a stated 

deficiency. Accordingly, the Court considers only whether Toshiba 

has established that Sharp's proposed amendment would be futile. 

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The Court finds that it would not be.

Preliminarily, the Court finds it irrelevant that, as Toshiba 

states, Sharp's proposed amendment "would not add any new facts or 

circumstances." Opp'n at 11-12. Proper amendments do not need to 

add new factual allegations. A proper amendment may also cure a 

defect in order to present a valid claim, thereby avoiding 

futility.

i. Futility - BTA Interpretation

As the Court found in its March 13 Order, the BTA governs CRTrelated transactions between Sharp and Toshiba, even those 

conducted by these subsidiary entities through individual 

agreements and purchase orders governed by the BTA's terms. Mar. 

13 Order at 6-8. Toshiba contends, however, that the BTA's 

"Resolution of Doubt or Disputes" clause, read alongside the forumselection clause, requires joint and several liability claims 

between Sharp and Toshiba to be litigated in Japan as well -- even 

when they are not necessarily related to direct Sharp-Toshiba 

commerce. Opp'n at 13-15. The Court finds Toshiba's 

interpretation of the BTA incorrect on these points.

The "Resolution of Doubt or Disputes" clause, Article 21.1 of 

the BTA, states, "[w]hen there are disputes or doubts that arise in 

relation to this Agreement or individual Agreement, or when there 

are unsolved items in this Agreement or individual Agreement, 

resolutions shall be made between [Sharp and Toshiba] in good 

faith." ECF No. 2000, Ex. 3 ("BTA") (filed under seal). The 

forum-selection clause, Article 21.2 of the BTA, states, "[i]n 

terms of litigation related to this Agreement or the individual 

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

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jurisdiction." BTA Art. 21.2.

Toshiba contends that a properly alleged joint and several 

liability claim based on conspiracy-related activity concerning 

other parties would violate Article 1.1 of the BTA, which requires 

the parties to "set their foundation on mutual trust and respect 

for mutual benefits." According to Toshiba, a conspiracy among it

and other defendants that resulted in Sharp's paying higher prices 

would be a breach of this mutual trust and respect. Opp'n at 13-

14. Further, Toshiba argues, if there are any doubts concerning 

how far, exactly, the BTA extends in cases like this, those doubts 

are to be resolved in the Osaka District Court pursuant to Articles 

21.1 and 21.2 Id. at 14-15. 

The Court is not convinced by this overbroad interpretation of 

the BTA. As a matter of contract interpretation involving a forumselection clause, the Court's task is, first, to decide the 

clause's scope and applicability, and, second, to determine whether 

the clause applies to the behavior at issue. See Peterson v. 

Boeing Co., 715 F.3d 276, 280 (9th Cir. 2013) (holding that 

enforceability and interpretation of forum-selection clauses is an 

issue of federal law); Robeson v. Twin Rivers Unified Sch. Dist., 

No. 2:14-2 WBS KJN, 2014 WL 1392922, at *1-2 (E.D. Cal. Apr. 9, 

2014) (applying that principle).4 

Further, the Court finds that the BTA's plain meaning involves 

relations between Sharp, Toshiba, their parents, and their 

 4 Toshiba cites a case concerning questions of arbitrability, Moses 

H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 

1, 24-25 (1983), but that case is inapposite because the law and 

policy of arbitration is not identical to that concerning a court's 

interpretation of a forum-selection clause outside the arbitration 

context. 

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subsidiaries, so far as they concern the manufacture and supply of 

CRTs. The resolution of doubt or disputes arising in relation to 

the BTA or individual agreements (e.g., purchase orders) that are 

subject to the BTA's terms is a matter the parties reserved for the 

Osaka District Court. See Mar. 13 Order at 11-14. However, the 

Court does not find that the BTA's Resolution of Doubt or Disputes 

clause renders claims for joint and several liability -- unrelated 

to the BTA or its individual agreements themselves -- similarly 

subject to the forum-selection clause. As Sharp correctly notes, 

under the plain meaning of the term "related to" in that clause, 

the claims "must involve the [agreement] itself to trigger the 

clause." Reply at 6 (quoting Coal. for ICANN Transparency Inc. v. 

Verisign, Inc., 452 F. Supp. 2d 924, 921-32 (N.D. Cal. 2006)). The 

BTA sends certain disputes and doubts to the Osaka District Court, 

but those disputes and doubts must at least be related to the 

Sharp-Toshiba transactions the BTA governs. Any potential 

conspiracy-related joint and several liability Toshiba may have in 

relation to other agreements is distinct in scope.

The Court therefore finds Toshiba's interpretation of the BTA 

too broad and vague to be acceptable in these circumstances. The 

BTA does not render Sharp's claims against Toshiba for joint and 

several liability subject to dismissal under the forum-selection 

clause, so amendment to clarify Sharp's claims against Toshiba 

would not be futile on that ground.

ii. Futility - Forum Non Conveniens

Toshiba also argues that, separately from issues of the BTA's 

scope, Sharp's proposed amendment would be futile because the 

doctrine of forum non conveniens would compel dismissal of Sharp's 

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claims for joint and several liability. On this issue, Toshiba 

points to the March 13 Order's discussions of the suitability of 

the Osaka District Court, but the Court notes as a preliminary 

matter that the March 13 Order's discussion is not entirely 

apposite. It concerned a forum-selection clause, under which the 

parties specifically contracted to commit certain issues to a 

different court. Although a motion to dismiss that applies a 

forum-selection clause is to be analyzed within the rubric of forum 

non conveniens doctrine, Atl. Marine, 134 S. Ct. at 580, dismissal 

under forum non conveniens when a forum-selection clause is not 

involved requires slightly different balancing inquiries.

"A party moving to dismiss on grounds of forum non conveniens 

must show two things: (1) the existence of an adequate alternative 

forum, and (2) that the balance of private and public interest 

factors favors dismissal." Lockman Found. v. Evangelical Alliance 

Mission, 930 F.2d 764, 767 (9th Cir. 1991).

The Ninth Circuit has stated that "while a U.S. citizen has no 

absolute right to sue in a U.S. court, great deference is due 

plaintiffs because a showing of convenience by a party who has sued 

in his home forum will usually outweigh the inconvenience the 

defendant may have shown." Contact Lumber Co. v. P.T. Moges 

Shipping Co., Ltd., 918 F.2d 1446, 1449 (9th Cir. 1990). 

Nonetheless, "[a] citizen's forum choice should not be given 

dispositive weight . . . ." Piper Aircraft Co. v. Reyno, 454 U.S. 

235, 255 n.23 (1981). "[I]f the balance of conveniences suggests 

that trial in the chosen forum would be unnecessarily burdensome 

for the defendant or the court, dismissal is proper." Id.

Even though the Court found dismissal under the forumCase 3:07-cv-05944-JST Document 2612 Filed 06/09/14 Page 9 of 13
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selection clause proper, the Court does not find that the doctrine 

of forum non conveniens applies here to render Sharp's proposed 

amendment futile. 

a. Adequate Alternative Forum

First, though there is an adequate alternative forum, the 

Ninth Circuit and Supreme Court have instructed district courts to 

give substantial (though not dispositive) deference to a 

plaintiff's choice of forum. Piper Aircraft, 454 U.S. at 255 n.23; 

Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1335 (9th Cir. 1984). 

The most important consideration under the circumstances is whether 

the balance of conveniences suggests that a trial on the issue of 

joint and several liability in this Court would be unnecessarily 

burdensome for Toshiba or the Court. Piper Aircraft, 454 U.S. at 

256 n.23. The Court finds that this factor favors Sharp.

b. Private Interest Factors

Second, the Court finds that the private interest factors do 

not suggest that Toshiba would be unacceptably inconvenienced by 

dealing with the issue of Sharp's joint and several liability 

claims in this Court. "Private interest factors include: ease of 

access to sources of proof; compulsory process to obtain the 

attendance of hostile witnesses, and the cost of transporting 

friendly witnesses; and other problems that interfere with an 

expeditious trial." Contact Lumber, 918 F.2d at 1451; see also

Nebenzahl v. Credit Suisse, 705 F.2d 1139, 1140 (9th Cir. 1983). 

Toshiba argues that most of its witnesses are located in Japan

and that only the Osaka District Court can hear disputes between 

Sharp and Toshiba. Opp'n at 14-17. The Court finds that this

factor does not favor Toshiba. Discovery has proceeded in this MDL 

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with relative ease, with Toshiba having already presented numerous 

witnesses for deposition. It is possible that Toshiba could be 

inconvenienced by producing more witnesses, but the Court does not 

find this an overly burdensome task for this defendant. 

The Court also finds that while the parties committed specific 

disputes to the Osaka District Court via the BTA, the issue of 

Toshiba's potential joint and several liability is distinct from 

the issues the parties agreed would be heard abroad. The Court 

does not find that honoring the parties' agreement on certain 

limited disputes would splinter this case. This is particularly 

true here because the issue of joint and several liability seems 

uniquely well-suited to resolution before this Court, due to the 

long involvement of nearly every relevant party and the fact that 

issues of Toshiba's joint and several liability were not 

specifically committed to a foreign court. Cf. Lockman, 930 F.2d 

at 770 (finding that the policy favoring an expeditious trial 

merited a conclusion that the foreign jurisdiction was best, since 

that jurisdiction was the only forum where the entire case could be 

tried); Contact Lumber, 918 F.2d at 1452 (finding similarly). 

Granted, the fact that Toshiba would be defending its case in 

two separate jurisdictions does suggest some inconvenience to 

Toshiba. Still, the Court does not find this inconvenience 

compelling in this case because Toshiba specifically contracted to 

have certain claims heard in a foreign court, even while it has

participated in this litigation for years, with discovery nearing a 

close and other deadlines coming expeditiously close. Moreover, 

this inconvenience does not seem unacceptably burdensome for a 

multinational corporation like Toshiba.

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The Court therefore finds that the private interest factors 

weigh in favor of rejecting Toshiba's argument on futility.

c. Public Interest Factors

Finally, the Court finds that the public interest factors 

merit retaining the issue of Toshiba's joint and several liability. 

"Public interest factors encompass court congestion, the local 

interest in resolving the controversy, and the preference for 

having a forum apply a law with which it is familiar." Contact 

Lumber, 918 F.2d at 1452; see also Nebenzahl, 705 F.2d at 1140. 

Toshiba contends that by finding Sharp's proposed amendment futile 

and committing the dispute to the Osaka District Court, the Court 

would further the goals of judicial efficiency and economy by 

ensuring that all of Sharp's claims would be heard in one forum. 

Opp'n at 17. The Court is not convinced. This litigation has 

proceeded before the undersigned for years, with the Court and the 

Special Master now being well acquainted with the parties and 

issues in this case. The Court's calendar on this case is well 

advanced. Moreover, the parties' contractual resolution of certain 

jurisdictional matters aside, this forum has a strong interest in 

resolving this case. See Carijano v. Occidental Petroleum Corp., 

643 F.3d 1216, 1232 (9th Cir. 2011). Sharp's allegations regarding 

joint and several liability concern a worldwide conspiracy to fix 

prices in the United States. That is a significant factor in favor 

of keeping this issue in this forum.

Accordingly, the Court finds that the public interest factors 

weigh in favor of rejecting Toshiba's argument on futility.

///

///

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iii. Conclusion as to Rule 15

The Court finds that Sharp's motion, considered under the 

extreme liberality of Rule 15, warrants permitting Sharp to file 

its amended complaint. The parties could have resolved some of 

these issues in a more straightforward, timely way, but 

nevertheless, Sharp has sufficiently shown that it is entitled to 

amend its pleadings, and Toshiba has failed to show that such an 

amendment would be either procedurally improper or substantively 

futile.

V. CONCLUSION

As explained above, the Court GRANTS the Sharp Plaintiffs' 

motion for leave to amend their complaint. 

IT IS SO ORDERED.

Dated: June 9, 2014

UNITED STATES DISTRICT JUDGE

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