Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-05261/USCOURTS-cand-3_13-cv-05261-11/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

NORTHERN DISTRICT OF CALIFORNIA

IN RE: CATHODE RAY TUBE (CRT)

ANTITRUST LITIGATION

This Order Relates To:

Best Buy Co., Inc., et al. v. Hitachi, Ltd., et 

al.,No. 11-cv-05513-JST

Best Buy Co., Inc., et al. v. Technicolor SA, 

et al., No. 13-cv-05264-JST

Target Corp. v. Chunghwa Pictures Tubes, 

Ltd., et al., No. 3:07-cv-05514-JST

Target Corp. v. Technicolor SA, et al., 

Case No. 3:11-cv-05514-JST

Alfred H. Siegel, as Trustee of the Circuit 

City Stores, Inc. Liquidating Trust v. Hitachi, 

Ltd., et al., No. 11-cv-05502-JST

Alfred H. Siegel, as Trustee of the Circuit 

City Stores, Inc. Liquidating Trust v. 

Technicolor SA, et al., No. 13-cv-05261-JST

Sears, Roebuck and Co., et. al. v. Chunghwa 

Picture Tubes, Ltd., et al., No. 11-cv-5514

Sears, Roebuck and Co. and Kmart Corp. v. 

Chunghwa Picture Tubes, Ltd., 

No. 11-cv- 05514 

Sharp Electronics Corporation, et al. v. 

Hitachi, Ltd., et al., No. 13-cv-01173-JST

Sharp Electronics Corp., et al. v. Koninklijke 

Philips Electronics N.V., et al., No. 13-cv2776-JST

ViewSonic Corporation v. Chunghwa Picture 

Tubes, Ltd., et al., No. 14-cv-02510

MDL No. 1917

Case No. C-07-5944 JST

ORDER ON MOTIONS IN LIMINE RE 

PASS-ON ISSUES AND BARGAINING 

POWER 

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The parties organized the pending motions in limine into nine categories. See ECF No. 

4603, Ex. A. This order addresses the seventh category, entitled “Motions re Pass-On Issues and 

Bargaining Power,” which contains five motions: four filed by the Direct Action Plaintiffs 

(“DAPs”) and one filed by Defendants. Id. at A-10, A-11, A-12. Defendants’ motion is entitled 

“Defendants’ Motion In Limine #16: To Permit Evidence and Argument Regarding Upstream 

Pass-On and Plaintiffs’ Bargaining Power.” ECF No. 3597 (“Def. Mot.”). The DAPs submitted 

their motions as part of a larger filing entitled “Motions In Limine (Nos. 1-18).” ECF No. 3558 

(“DAP Mot.”). They are listed as motions number two, four, ten,1and sixteen within that filing. 

Id. The motions are fully briefed2and suitable for disposition without oral argument pursuant to 

Local Rule 7-1(b). 

The Court finds as follows:

Motion Ruling

Defendants’ MIL No. 16: To Permit Evidence 

and Argument Regarding Upstream Pass-On 

and Plaintiffs’ Bargaining Power

DENIED

DAPs’ MIL No. 4: Motion To Exclude 

Evidence Or Argument Regarding Plaintiffs’ 

Purported “Market Power”

GRANTED 

DAPs’ MIL No. 10: Motion to Exclude 

Evidence or Argument Regarding Incomplete 

Pass-Through of Overcharges Through Affiliate 

Entities

GRANTED. In addition, the Court excludes 

evidence or argument regarding incomplete 

pass-through offered by the DAPs for the 

purpose of calculating damages. 

DAPs’ MIL No. 16: Motion to Exclude 

Evidence of or References to the Retailer 

Plaintiffs Purchasing Finished Products 

Containing CRTs from Plaintiff ViewSonic or 

Plaintiff Sharp

GRANTED

DAPs’ MIL No. 2: Exclude Evidence or 

Argument Regarding Downstream Pass-On

GRANTED

 

1

The Court also ordered supplemental briefing on the separate but related issue of whether the

DAPs’ evidence of upstream pass-on should be excluded. ECF Nos. 4674 (“DAP Suppl. Br.”); 

4675 (“Def. Suppl. Br.”).

2

ECF Nos. 3676-4 (“Def. Opp’n”), 3757-4 (“DAP Reply”), 3654 (“DAP Opp’n”), 3666 (“Sharp 

Opp’n”), 3770 (“Def. Reply”).

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I. DEFENDANTS’ MIL NO. 16: TO PERMIT EVIDENCE AND ARGUMENT 

REGARDING UPSTREAM PASS-ON AND PLAINTIFFS’ BARGAINING POWER

Defendants move the Court “to permit evidence and argument regarding upstream pass-on3

and Plaintiffs’ bargaining power.” Def. Mot. at 1. Defendants assert such evidence is probative of 

Best Buy’s state law claims, whether the DAPs’ federal claims satisfy the FTAIA, whether the 

DAPs have established antitrust injury, and whether the DAPs’ damages calculations are 

methodologically sound. Because Best Buy has since settled, the portion of Defendants’ motion 

as to Best Buy claims is denied as moot. As to what remains, the motion is denied. 

A. Legal Standard

“Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it 

would be without the evidence; and (b) the fact is of consequence in determining the action.” Fed. 

R. Evid. 401. “Irrelevant evidence is not admissible.” Fed. R. Evid. 402. “The court may exclude 

relevant evidence,” however, “if its probative value is substantially outweighed by a danger of one 

or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, 

wasting time, or needlessly presenting cumulative evidence.” Fed. R. Evid. 403.

B. Discussion

1. Upstream Pass-On

Defendants concede that Illinois Brick Co. v. Illinois, 431 U.S. 70 (1977) and Royal 

Printing Co. v. Kimberly-Clark Corp., 621 F.2d 323 (9th Cir.1980), prohibit the admission of

pass-on calculations to determine damages. Nevertheless, Defendants argue that such evidence 

should be admitted where probative of other issues.

To resolve this question, the Court looks to the underlying rationales of Illinois Brick and 

Royal Printing: (1) the importance of avoiding evidentiary complexities, (2) the risk of duplicative 

recoveries, and (3) the importance of “private attorneys general.” Illinois Brick, 431 U.S. at 745-

46; Royal Printing, 621 F.2d at 325-26; see also MSJ Order re Standing at 8-9. Although allowing 

pass-on calculations outside of the damages context does not implicate the second and third 

 

3

“Upstream pass-on” (also called “upstream pass-through”) is the amount of a collusive 

overcharge passed from entities higher in the distribution chain to entities down the chain. See 

generally ECF No. 4742 (“MSJ Order re Standing”) at 10-12. Here, it refers to the amount of the 

alleged overcharge CRT Finished Product Manufacturers passed on to the DAPs.

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rationales, it poses the same evidentiary complexities, i.e., “additional long and complicated 

proceedings involving massive evidence and complicated theories.” Hanover Shoe, Inc. v. United 

Shoe Mach. Corp., 392 U.S. 481, 493 (1968). For that reason, allowing evidence of pass-on 

calculations, even when offered for reasons other than determining damages, risks wasting time,

confusing the issues, and causing undue delay. Insofar as such evidence suggests to the jury that 

the DAPs deserve only damages commensurate with the amount passed on to them, evidence of 

pass on also risks misleading the jury and unfairly prejudicing the DAPs. The Court therefore 

finds that, absent a compelling need, the risks of permitting upstream pass-on evidence

substantially outweigh the probative value regardless of the purpose for which the evidence is 

offered. See Fed. R. Evid. 403.

Defendants contend the need for pass-on evidence in this case is substantial. The evidence 

should be allowed, they assert, because it is necessary to determine (1) whether the DAPs’ claims 

satisfy the FTAIA, (2) whether the DAPs have established antitrust injury, and (3) whether the 

DAPs’ damages calculations are methodologically sound. The Court addresses each of these 

arguments in turn. 

a. The FTAIA

Defendants claim the DAPs will need to show that CRT Finished Product manufacturers 

passed on some of the overcharge to the DAPs to satisfy the “direct effects” exception of the 

FTAIA. This argument has no merit. First, Defendants do not have standing to ask the Court to 

admit evidence they claim the DAPs will need to introduce in order to meet the DAP’s burden of 

production. Second, the DAPs do not necessarily need to satisfy the direct effects exception. If

the DAPs choose to pursue only an import commerce theory, evidence of upstream pass through 

will be irrelevant. Third, even if the DAPs pursue a direct effects theory, they can meet their 

burden of production without engaging in pass-on calculations. Indeed, they probably already 

have. See ECF No.4910 (“FTAIA MSJ Order”) at 7-9.

The Ninth Circuit’s opinion in United States v. Hsiung is in accord. 778 F.3d 738, 759-60 

(9th Cir. Jan 30, 2015) cert. denied, 135 S. Ct. 2837 (June 15, 2015). There, the panel concluded 

on similar facts “that the conduct was sufficiently ‘direct, substantial, and reasonably foreseeable’ 

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with respect to the effect on United States commerce.” Id. at 759. The Ninth Circuit reasoned that

the component product manufactured by the defendants was a substantial portion of the cost of the 

finished products purchased by plaintiffs. Id. The court also found that the evidence 

underscored the integrated, close and direct connection between the 

purchase of the price-fixed [goods], the United States as the 

destination for the products, and the ultimate inflation of prices in 

finished products imported to the United States. The direct 

connection was neither speculative nor insulated by multiple 

disconnected layers of transactions.

Id. So too here. See FTAIA MSJ Order at 7-9 (Plaintiffs’ evidence “shows many hundreds of 

conspiratorial meetings taking place all over the world, including in the United States, at which 

participants reached explicit agreements on CRT prices, production levels, market shares and 

customers. The United States was the world’s largest market for CRTs during the relevant time 

frame, and Defendants were well aware of the effect their price-fixing agreements were having on 

the prices paid for CRTs and products containing CRTs. The same evidence can fairly be read to 

demonstrate that one goal of the conspiracy was to maintain these prices at an artificially high

level.”). 

The Court agrees with Defendants that if the DAPs elect to present evidence of specific 

pass-through amounts to show the effect was direct and substantial (assuming the Court allows 

such evidence to be admitted) then Defendants are entitled to present their own pass-through 

evidence in rebuttal. The more difficult question is whether Defendants ought to be able to

present pass-on evidence even if the DAPs do not. If permitted, Defendants will offer the 

testimony of “expert witness Professor Janusz Ordover, who will testify that only about 70% of 

the overcharge allegedly paid by the finished product manufacturers was passed on to the 

Plaintiffs.” Def. Opp’n at 52. Presumably Defendants will then argue to the jury that because 

prices paid by the DAPs only increased by 70% of the total overcharge amount, the effect on U.S. 

commerce was neither direct nor substantial. 

An effect is direct under the FTAIA if the effect follows “as an immediate consequence of 

the defendants’ activity.” United States v. LSL Biotechnologies, 379 F.3d 672, 680 (9th Cir. 

2004). The pass-on amount, however, while probative of magnitude, does not help determine 

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whether it was direct.

As to whether the effect was substantial, Defendants suggest that insofar as the pass-on 

rate for a given DAP was relatively low, it is more likely the effect was insubstantial. The test, 

however, is not whether the transactions at issue had a substantial effect on the DAPs, but whether

the conspiracy’s effect was substantial on domestic commerce. See F. Hoffmann–La Roche Ltd. 

v. Empagran S.A., 542 U.S. 155, 161 (2004); Hsiung, 778 F.3d at 751. Quantifying the rate at 

which particular CRT Finished Product Manufacturers passed on the alleged overcharge to 

certain customers (here, the DAPs) does not get Defendants very far on that issue. To the extent 

Defendants’ evidence can be understood as quantifying the effect on U.S. commerce more 

generally, it is hard to see how Defendants’ evidence showing that 70% of the overcharge was 

passed on to purchasers in the United States supports Defendants’ assertion that the effect was 

insubstantial. If anything, it seems to support the opposite conclusion. See United States v. Dean, 

980 F.2d 1286, 1288 (9th Cir. 1992) (“For evidence to be relevant it must be probative of the 

proposition it is offered to prove, and . . . the proposition to be proved must be one that is of 

consequence to the determination of the action.”). Regardless, to the extent it is relevant, the 

probative value is significantly outweighed by the risk that permitting pass-on calculations will

confuse the issues, cause undue delay, waste time, mislead the jury, and unfairly prejudice the 

DAPs. See Fed. R. Evid. 403.

Finally, Defendants argue that because only 70% of the overcharge was passed on to the 

DAPs, “roughly one-third of the damages claimed by the Plaintiffs cannot be tied to any ‘effect’ 

on domestic commerce, and cannot ‘give rise to’ Plaintiffs’ claim.” Def. Opp’n at 52. This 

argument fails as a matter of law. The FTAIA is an element of liability, not a limit on damages. 

See Hsiung, 778 F.3d at 751-53. That the DAPs’ damages might exceed the extent of the effect on 

domestic commerce because of the Ninth Circuit’s requirement that the plaintiff sue “for the entire 

amount of the overcharge” is irrelevant. Royal Printing, 621 F.2d at 327.

b. Antitrust Injury

Next, Defendants claim that to establish “antitrust injury” “Plaintiffs will have to prove 

their economic injury by showing that overcharges on CRTs were passed on to them by the [CRT 

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Finished Products] manufacturers -- in other words, they will have to present upstream pass-on 

evidence, and defendants must be allowed to rebut it.” Def. Mot. at 8. Notwithstanding 

Defendants’ use of the terms “antitrust standing” and “antitrust injury,” the substance of their 

argument is that the DAPs will need to present evidence of upstream pass-on to establish injuryin-fact.4

 See Philip E. Areeda & Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust 

Principles and Their Application ¶ 335 (4th ed. 2014) (explaining the difference between injuryin-fact and antitrust injury). 

The Court is not convinced. Defendants cannot move the Court to admit evidence they 

claim will be submitted by the DAPs in order to meet the DAP’s burden on injury-in-fact. 

Moreover, the DAPs need not quantify the precise extent to which they were harmed in order to 

satisfy their burden of production. See Knutson v. Daily Review, Inc., 548 F.2d 795, 811 (9th Cir. 

1976) (quoting Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 114 n.9 (1969)

(“The plaintiff must prove some damage, but ‘proving the fact of damage . . . is satisfied by . . . 

proof of some damage flowing from the unlawful conspiracy; inquiry beyond this minimum point 

goes only to the amount and not the fact of damage.’”). Finally, the evidence Defendants seek to 

present -- that 70% of the overcharge was passed on to the DAPs -- is not probative of Defendants’ 

assertion that the DAPs did not suffer injury-in-fact. Indeed, it proves the opposite. 

c. Rebutting The Methodology Of The DAPS’ Damages 

Calculations

Though both parties acknowledge that the introduction of pass-on evidence to calculate 

damages is improper, both attempt to introduce their own evidence for that purpose while 

contesting the other’s ability to do the same. Dr. Alan Frankel, the DAPs’ damages calculation 

expert, estimated a 100% pass-through rate. ECF No. 3596-5 (“Frankel Report”) at ¶ 31. 

Defendants argue they are entitled to rebut Dr. Frankel’s estimates with evidence “showing that 

any pass-through was far less than 100%.” Def. Mot. at 6. Specifically, “[t]here is defense expert 

 

4 Although Defendants recite the requirements of “antitrust standing” and “antitrust injury,” those 

concepts have nothing to do with the substance of their motion. To the extent Defendants are 

attempting through their motion in limine to re-litigate arguments presented in their motions for 

summary judgment, the Court declines the invitation to reconsider those issues. 

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testimony . . . that the pass-through rate was, in fact, no more than between 60% and 70%.” Id. 

The Court rejects both parties’ arguments. Not only is pass-through irrelevant to damages, it is

expressly barred by Royal Printing. See 621 F.2d at 327.

Royal Printing held that indirect purchasers suing under the ownership and control 

exception are required to sue “for the entire amount of the overcharge.” Id. at 327; see also id.

(holding expressly that the indirect purchaser “c[ould] not sue . . . only for the portion of the 

overcharge that was passed on to it through [the direct purchaser]”). The court reasoned that if the 

indirect purchaser sued only for the amount of the overcharge it paid, the court would be forced to 

determine “what portion of the illegal overcharge was ‘passed on’ to [the indirect purchaser] and 

what part was absorbed by the middlemen [i.e., the direct purchaser].” Id. Such a process would 

be unacceptable, concluded the court, because it would “involve all the evidentiary and economic 

complexities that Illinois Brick clearly forbade.” Id.

Defendants motion as to pass-on calculations is denied. 

2. The DAPs’ Bargaining Power

Defendants claim evidence of the DAPs’ bargaining or market power is highly probative of 

the DAPs’ ability to negotiate favorable terms for the CRT Finished Products they purchased from 

Defendants’ affiliates. Def. Opp’n at 24. The DAPs’ ability to negotiate favorable terms, in turn, 

is purportedly relevant to “contest whether Plaintiffs have proved that the ‘domestic effects 

exception’ of the FTAIA is satisfied . . . [and] whether Plaintiffs have established [injury-infact].”5

 Id. The DAPs assert that any reference to their bargaining or market power is irrelevant 

and inherently prejudicial because “‘[m]arket power’ is a legal term with specific implications [of 

wrongdoing] under the Sherman Act.” DAP Mot. at 22. Defendants counter that there is no risk 

of unfair prejudice because Defendants do not intend to argue that the DAPs violated the Sherman 

Act. Def. Opp’n at 24. Further, because the term “market power” is not inherently derogatory or 

pejorative, Defendants contend there is no risk of unfair prejudice. Id. 

 

5 As with evidence of upstream pass-on, Defendants use the term “antitrust injury” but the 

substance of their argument relates to injury-in-fact. Defendants also claim that evidence of 

market power is relevant to “address express overcharge pass-through assumptions made by 

Plaintiffs’ damages expert.” Id. As explained infra Section III, however, neither party will be 

permitted to submit evidence of pass-through on the issue of damages.

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Defendants claim evidence of the DAPs’ bargaining power is probative of injury-in-fact 

insofar as the DAPs’ bargaining power made it more likely that the DAPs were able to avoid

paying an overcharge. The Court is not convinced. In order to be relevant to injury-in-fact, it is 

not enough for the evidence to suggest the DAPs paid only a portion of the overcharge; the 

evidence must make it more likely that the DAPs did not pay any overcharge. Defendants’ own 

experts, however, estimate a pass-on rate 70% based in part of the DAPs’ market power. See Def. 

Opp’n at 52. Further, whether the DAPs paid an overcharge and suffered injury-in-fact is a 

function of whether the price they paid for CRT Finished Products increased as a result of the 

conspiracy, not whether they used their purported market power as leverage during price 

negotiations. 

Notwithstanding the forgoing analysis, the evidence may still be minimally relevant. In 

theory at least, a firm with market power is more capable of completely avoiding an overcharge 

than a firm that lacks it, all else equal. The probative value of that consideration, however 

attenuated, may be sufficient to clear Rule 401’s relatively low bar. As explained previously, 

however, the slight probative value of this evidence is substantially outweighed by many of the

risks enumerated in Rule 403.

As to the direct effects exception of the FTAIA, Defendants contend the DAPs’ ability to 

negotiate low prices due to their market power makes it less likely the DAPs paid a significant 

overcharge. That, in turn, makes it less likely the impact on U.S. commerce was direct and 

substantial as required by the FTAIA. As already explained, an effect is direct under the FTAIA if 

it follows “as an immediate consequence of the defendants’ activity.” LSL Biotechnologies, 379 

F.3d at 680. That the DAPs’ bargaining power may have had an impact on the degree of that 

effect, however, is irrelevant to whether the effect was direct. As to whether the effect was 

substantial, evidence of the DAPs’ bargaining power is even less probative than evidence of passon calculations. Whereas the pass-on rates of Defendants’ experts could potentially be 

extrapolated to the U.S. market more generally, Defendants fail to explain how a particular DAPs’ 

bargaining power is relevant to the conspiracy’s effect on U.S. commerce as a whole. Even if the 

evidence was somewhat relevant to that question, it would still be inadmissible on Rule 403 

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grounds, as explained below.

Evidence of the DAPs’ market power raises Rule 403 concerns, but not for the reasons set 

out by the DAPs. The DAPs suggest, implausibly, that the jury will have sufficient legal 

knowledge to know that the term “market power” has “specific implications” under the Sherman 

Act. DAP Mot. at 22. This is a price-fixing case as to which market power is not an element. 

Even if market power was an element, the Sherman Act does not view it as inherently wrongful. 

Evidence of market power, however, could be unfairly prejudicial in other ways. For 

example, it might suggest that Defendants conspired to combat market power downstream. Jurors 

might also be unfairly prejudicial towards large corporate entities that are able to pressure 

suppliers to accept unfavorable terms. Further, evidence of market power showing that the DAPs’ 

actual injuries were far less than the entire overcharge might lead jurors to conclude that awarding 

the full overcharge would amount to an unjustified windfall. Cf. Brooks v. Cook, 938 F.2d 1048, 

1052 (9th Cir. 1991) (holding on the similar issue of whether a jury should be aware of treble 

damages that “the fear is that a jury, informed of plaintiff’s right to additional funds, will view the 

money as a windfall and take steps to offset it.”).

Evidence of market power is also potentially problematic on other Rule 403 grounds. As 

to injury-in-fact, insofar as the parties can simply point to prices to prove injury or lack thereof, 

evidence of the DAPs’ market power is needlessly cumulative and indirect. Further, evidence 

such as market power that focuses the jury’s attention on how much the DAPs actually paid in 

overcharge risks confusing the issues. Liability and damages will largely turn on whether 

Defendants’ conspired and the amount of the entire overcharge. Lengthy proceedings about how 

much of the overcharge was likely passed on due to the DAPs’ market power is likely to cause 

undue delay and waste time. 

Defendants’ motion as to market power is therefore denied. 

C. Conclusion

Defendants’ motion is denied.

6

 

 

6 Among other DAPs, Defendants’ motion was filed with respect to DAP Sharp, even though 

Sharp is a direct purchaser to whom the issue of upstream pass through does not apply. 

Defendants’ motion with respect to Sharp is therefore denied for this independent reason.

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II. DAPS’ MIL NO. 4: MOTION TO EXCLUDE EVIDENCE OR ARGUMENT 

REGARDING PLAINTIFFS’ PURPORTED “MARKET POWER”

Having denied Defendants’ motion to admit evidence of market power, the question on the 

DAPs’ motion is whether the Court should exclude such evidence on a motion in limine or defer 

ruling if and until an objection is raised at trial. For the reasons provided supra Section I.B.2, the

Court finds that evidence of the DAPs’ market power is inadmissible on Rule 403 grounds, subject 

to further proof at trial. Accord Costco Wholesale Corp. v. AU Optronics Corp., No. C13-

1207RAJ, 2014 WL 4674390, at *3 (W.D. Wash. Sept. 17, 2014) (“This ruling excludes evidence 

that, Costco's bargaining power allowed it to obtain better prices than others, but it does not 

prohibit evidence or argument about the prices Costco paid for the finished products at issue.”).

 The DAPs’ motion is granted.

III. DAPS’ MIL NO. 10: MOTION TO EXCLUDE EVIDENCE OR ARGUMENT 

REGARDING INCOMPLETE PASS-THROUGH OF OVERCHARGES 

THROUGH AFFILIATE ENTITIES

The DAPs move the Court to prohibit Defendants from excluding evidence or argument 

suggesting the DAPs only paid a portion of the alleged overcharge due to incomplete pass-through 

from the direct purchasers from whom the DAPs purchased CRT Finished Products. For the 

reasons provided supra Section I.B.1, DAPs’ motion is granted. 

Notwithstanding their position that Royal Printing bars Defendants from submitting 

evidence or argument regarding pass-through, the DAPs apparently intend to present their own 

evidence that the pass-through rate was 100%. See Frankel Report at ¶ 31. The Court ordered the 

parties to show cause why the Court should not exclude all evidence of upstream pass-on, 

including evidence and argument provided by the DAPs’ expert that the DAPs paid the entire 

amount of the overcharge. In response, the DAPs note that their expert’s upstream pass-on 

analysis “played no role in his computation of damages” because the outcome is the same 

regardless of whether one calculates damages based on the entire overcharge amount or based on a

100% pass-on rate.7 DAP Suppl. Br. at 2. 

 

7 Defendants’ supplemental brief argues again why they should be able to introduce evidence 

showing that DAPs paid less than the entire overcharge amount. Specifically, Defendants assert 

that upstream pass-on should be permitted because Royal Printing does not apply where plaintiffs 

purchased finished products incorporating the price-fixed good instead of the price-fixed good 

itself. If Royal Printing does not apply, then DAPs do not have standing and the issue of the 

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Although the outcome of the damages calculation may be the same, evidence or argument 

suggesting a 100% pass-on rate is inadmissible because (1) the amount the DAPs actually paid is 

irrelevant, (2) the amount the DAPs actually paid is a question of fact that Defendants are entitled 

to rebut if the DAPs open the door, and (3) jurors might respond differently to evidence suggesting 

the DAPs actually paid the entire overcharge amount. Jurors will be instructed to calculate 

damages based on the entire overcharge amount. The parties’ evidence and argument, therefore, 

should be focused only on the amount of the total overcharge. Accordingly, the Court hereby

excludes all evidence and argument of upstream pass-on for the purpose of calculating damages 

for claims under the Sherman Act, including evidence and argument submitted by the DAPs that 

the pass-on rate was 100%.

IV. DAPS’ MIL NO. 16: MOTION TO EXCLUDE EVIDENCE OF OR REFERENCES 

TO THE RETAILER PLAINTIFFS PURCHASING FINISHED PRODUCTS 

CONTAINING CRTS FROM PLAINTIFF VIEWSONIC OR PLAINTIFF SHARP

The DAPs move the Court to exclude referring to or introducing evidence at trial that 

DAPs Target, Sears, Kmart, Circuit City, and Best Buy purchased finished products containing 

CRTs from Plaintiffs ViewSonic and Sharp for reseale. DAP Mot. at 65. The DAPs argue the 

evidence is irrelevant and will be unfairly prejudicial “to the extent it is used by Defendants to 

imply to a jury that there is duplicative recovery at issue in this case or that ViewSonic or Sharp 

may have passed on overcharges to their customers.” Id. Defendants contend that the evidence is 

relevant “because it shows that the retailer plaintiffs had bargaining power.” Def. Opp’n at 76. 

Specifically, “[t]he evidence will show,” according to Defendants “that the [DAPs] had the ability 

to choose where to purchase finished goods from among many options . . . [which] allowed them 

to negotiate lower prices . . . which in turn affected any damages they incurred . . . .” Id. at 76-77.

This argument is not persuasive. Because Royal Printing requires the DAPs to sue for the 

entire overcharge, the DAPs’ actual damages, and evidence probative of their actual damages, are 

irrelevant. Regardless, that the DAPs purchased CRT Finished Products from ViewSonice and 

 

admissibility of pass-on evidence is moot. But that is not the question before the Court on this 

motion. The question is, assuming DAPs have standing pursuant to Royal Printing, should the 

Court exclude evidence and argument of upstream pass-on regarding damages calculations. 

Defendants failed to respond to that question.

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Sharp is irrelevant to whether the DAPs had bargaining power, and even if it was probative, 

evidence of the DAPs’ bargaining power is inadmissible on Rule 403 grounds for the reasons 

already provided.

The DAPs’ motion is granted. 

V. DAPS’ MIL NO. 2: EXCLUDE EVIDENCE OR ARGUMENT REGARDING 

DOWNSTREAM PASS-ON

The DAPs filed a motion in limine to exclude evidence or argument regarding downstream 

pass-through as irrelevant and unduly prejudicial under Federal Rules of Evidence 401, 402, and 

403. The motion was brought regarding the DAPs’ claims under the Clayton Act and Best Buy 

Plaintiffs’ claims under Minnesota law. Best Buy has since settled their claims. As to the DAPs’ 

Clayton Act claims, the motion is granted. 

The rule regarding downstream pass-on was set out in Hanover Shoe. There, an antitrust 

defendant challenged the plaintiff’s damages by showing that the plaintiff had passed on part of 

the illegal overcharge to its customers. 392 U.S. at 487-94. The Supreme Court banned the use of 

this “defensive pass-on” theory because determining how much of the plaintiff’s damages had 

been passed on and how much had been “absorbed” by the plaintiff “would often require 

additional long and complicated proceedings involving massive evidence and complicated 

theories.” Id. at 493. 

The DAPs argue evidence that they “may have recouped Defendants’ unlawful 

overcharges by, among other things, passing-on those overcharges to their customers, is legally 

irrelevant to the amount of damage they suffered under the Sherman Act.” DAP Mot. at 14. 

According to the DAPs, “[t]he Court also should preclude Defendants, from indirectly raising the 

pass-on defense by prohibiting Defendants from referring to or attempting to offer evidence 

regarding the effect of Defendants’ overcharges on Plaintiffs’ businesses . . . . Such evidence 

would include evidence regarding Plaintiffs’ profitability, or the retail prices they set for CRT 

finished products.” Id. at 16. 

Defendants respond that the DAPs’ motion is “unnecessary in light of the parties’ proposed 

jury instruction regarding downstream pass-on.” Def. Opp’n at 15. The Court disagrees. If the 

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evidence is irrelevant or prohibited by Hanover Shoe, it should be excluded. 

Next, Defendants argue the motion is “overbroad” because it

seeks to exclude evidence that is not downstream pass-on evidence . . . . 

Specifically, [the] DAPs seek to exclude evidence regarding the: (1) “effect of 

Defendants’ overcharges on Plaintiffs’ businesses”; (2) “Plaintiffs’ profitability”; 

or (3) “the retail prices that they set for CRT finished products.” Mot. at 16. . . . 

This evidence is not downstream pass-on evidence because it is not used to argue 

that [the] DAPs passed on overcharges to their customers. Rather, it is directly 

relevant to the key question of whether and the extent to which [the] DAPs paid an 

overcharge . . . .

Def. Opp’n at 15 (emphasis added). 

The Court is unconvinced. The question of “the extent to which [the] DAPs paid an 

overcharge” is not an issue in this case. Id. Plaintiffs are entitled to sue for the entire overcharge 

amount, regardless of the amount of their actual damages. See Hanover Shoe, 392 U.S. at 494; 

see also Royal Printing, 621 F.2d at 327 (“Hanover Shoe teaches that . . . there is nothing wrong 

with the plaintiff winning a windfall gain, so long as the antitrust laws are vindicated and the 

defendant does not suffer multiple liability.”).

The question of “[w]hether . . . [the] DAPs paid an overcharge” to CRT Finished Product 

manufacturers is an issue in the case. Def. Opp’n at 15. But evidence that the DAPs passed on 

some of the overcharge to their customers is unrelated to that question. Similarly, the “retail 

prices that [the DAPs] set” for the products they sold to their customers have no bearing on 

whether the DAPs paid an overcharge. As to evidence regarding “the effect of Defendants’ 

overcharges on Plaintiffs’ businesses” and “Plaintiff’s profitability,” Defendants provide no 

explanation as to how such evidence is probative of whether DAPs paid an overcharge. Perhaps

Defendants intend to argue that the DAPs’ ability to maintain the same profitability implies they 

did not suffer injury-in-fact. But a plaintiffs’ injury in a price-fixing case does not turn on 

profitability. By operation of the direct purchaser rule, the DAPs would have been harmed the 

moment they paid an illegal overcharge. The injury-in-fact requirement would have been 

satisfied, therefore, even if the DAPs’ profits did not decrease as a result. See Hanover Shoe, 392 

U.S. at 489 (“We think it sound to hold that when a buyer shows that the price paid by him . . . is 

illegally high . . . , he has made out a prima facie case of injury” even “if he raises the price for his 

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own product.”); In re Apple iPod iTunes Antitrust Litig., No. C 05-00037, 2011 WL 5864036, at 

*4 (N.D. Cal. Nov. 22, 2011) (“‘[W]hen a seller overcharges a buyer . . . the fact that the buyer 

raises the price for its own product, thereby passing on the overcharge to its customers and 

avoiding a loss in profit, has no bearing on the issue of whether the buyer has suffered an 

injury.’”) (quoting Meijer, Inc. v. Abbott Labs., 251 F.R.D. 431, 433 (N.D. Cal. 2008) (in turn 

citing Hanover Shoe, 392 U.S. at 489-92)); Braintree Labs., Inc. v. McKesson Corp., No. 11-

80233, 2011 WL 5025096, at *3 (N.D. Cal. Oct. 20, 2011) (“[A] plaintiff’s alleged benefit from a 

defendant’s anti-competitive behavior . . . is not relevant to whether the plaintiff [direct purchaser] 

suffered a cognizable antitrust injury. . . . [T]he relevant question is whether the plaintiff paid an 

overcharge.”). 

The motion is granted. 

VI. CONCLUSION

The Court finds as follows:

Motion Ruling

Defendants’ MIL No. 16: To Permit Evidence 

and Argument Regarding Upstream Pass-On 

and Plaintiffs’ Bargaining Power

DENIED

DAPs’ MIL No. 4: Motion To Exclude 

Evidence Or Argument Regarding Plaintiffs’ 

Purported “Market Power”

GRANTED 

DAPs’ MIL No. 10: Motion to Exclude 

Evidence or Argument Regarding Incomplete 

Pass-Through of Overcharges Through Affiliate 

Entities

GRANTED. In addition, the Court excludes 

evidence or argument regarding incomplete 

pass-through offered by the DAPs for the 

purpose of calculating damages. 

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

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Motion Ruling

DAPs’ MIL No. 16: Motion to Exclude 

Evidence of or References to the Retailer 

Plaintiffs Purchasing Finished Products 

Containing CRTs from Plaintiff ViewSonic or 

Plaintiff Sharp

GRANTED

DAPs’ MIL No. 2: Exclude Evidence or 

Argument Regarding Downstream Pass-On

GRANTED

IT IS SO ORDERED.

Dated: November 15, 2016

______________________________________

JON S. TIGAR

United States District Judge

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