Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05944/USCOURTS-cand-3_07-cv-05944-167/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. C-07-5944-SC

ORDER GRANTING MOTION TO 

This Order Relates To: DISMISS

Case No. C-13-1173 SC

SHARP ELECTRONICS CORP. and 

SHARP ELECTRONICS MANUFACTURING 

COMPANY OF AMERICA, INC.,

 Plaintiffs

 v.

 HITACHI LTD., et al, 

 

 Defendants.

I. INTRODUCTION

Now before the Court is Defendant Thomson Consumer 

Electronics, Inc.'s ("Defendant" or "Thomson Consumer") Rule 

12(b)(6) motion to dismiss Plaintiffs Sharp Electronics Corp. and 

Sharp Electronics Manufacturing Co. of America, Inc.'s 

("Plaintiffs") complaint. ECF Nos. 1 ("Compl."), 30 ("MTD"). The 

motion is fully briefed. ECF Nos. 34 ("Opp'n"), 38 ("Reply"). 

Case 3:07-cv-05944-JST Document 1960 Filed 09/26/13 Page 1 of 7
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Plaintiffs also filed an unopposed request for judicial notice, ECF 

No. 34-1 ("RJN"), which the Court GRANTS under Federal Rule of 

Evidence 201. Finding this matter suitable for disposition without 

oral argument, Civ. L.R. 7-1(b), the Court GRANTS Defendant's 

motion to dismiss Plaintiffs' complaint for the reasons explained 

below.

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.

Defendant is a Delaware corporation with its principal place 

of business in Indianapolis, Indiana. Compl. ¶ 73. It is a wholly 

owned subsidiary of the French corporation Thomson S.A. Id. ¶¶ 72-

73. Defendant used to manufacture CRTs out of several United 

States-based plants, but in 2004, Thomson S.A. closed those plants, 

and in 2005, it sold its CRT business to Videocon Industries, Ltd. 

("Videocon"). Id. ¶ 72. Plaintiffs allege that Defendant 

participated in an international conspiracy to fix the prices of 

CRTs, see id. ¶¶ 2, 72-73, specifying that both Thomson Consumer 

and Thomson S.A. actually participated in conspiratorial meetings

and joined the relevant price-fixing agreements "[b]etween at least 

1996 and 2005," id. ¶¶ 187-88. According to Plaintiffs, "[Thomson 

Consumer and Thomson S.A.] never effectively withdrew from this 

conspiracy." Id. ¶ 187.

Defendant now moves to dismiss Plaintiffs' complaint, arguing 

among other things that it fails to state a plausible claim and 

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United States District Court

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fails to meet the heightened pleading standards of Rule 9(b). 

Plaintiffs oppose this motion.

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 

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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 

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. Rules 8 and 9

Plaintiffs' allegations against Defendant fail under Rules 8 

and 9(b). In making this conclusion, the Court relies on a close 

reading of Plaintiffs' complaint and controlling Supreme Court 

precedent. "Determining whether a complaint states a plausible 

claim for relief will . . . be a context-specific task that 

requires the reviewing court to draw on its judicial experience and 

common sense." Iqbal, 556 U.S. at 679. In Twombly, an antitrust 

case, the Supreme Court noted that:

Asking for plausible grounds to infer an 

agreement does not impose a probability 

requirement at the pleading stage; it simply 

calls for enough fact [s] to raise a 

reasonable expectation that discovery will 

reveal evidence of illegal agreement.... 

[A]n allegation of parallel conduct and a 

bare assertion of conspiracy will not 

suffice.

550 U.S. at 556.

At this point in this litigation, Plaintiffs simply fail to 

elucidate why and how Defendant should be part of this case. In a 

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United States District Court

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287-paragraph complaint, filed six years after this MDL's 

inception, Plaintiffs fail to plead sufficient facts either to 

render their claims against Defendant plausible or to satisfy the 

heightened pleading standards of Rule 9(b). Plaintiffs'

allegations about Defendant's purportedly actionable behavior state

only that Defendant was involved in the CRT business from around 

1995 until 2005, after which it sold its CRT business to a 

different entity, whose connections to Defendant are never made 

clear. See Compl. ¶¶ 72-73. Beyond that, Plaintiffs provide only 

the barest possible pleadings that Defendant participated in the 

conspiracy to some extent, and that Defendant purportedly "never 

withdrew" from these dealings. Id. ¶¶ 187-88. 

So many years after this MDL's inception, Plaintiffs should be 

able to provide something more than boilerplate allegations about 

alleged conspirators. The Court does not find that rote comparison 

of this complaint's basic allegations to older, established 

complaints can render Plaintiffs' allegations plausible. 

Plaintiffs are not wrong that, in the past, the Court has permitted 

other plaintiffs to proceed not with detailed, defendant-bydefendant allegations but with more general -- but still plausible 

-- contentions that each defendant participated in the alleged 

conspiracy. See Opp'n at 5-6 (citing In re Cathode Ray Tube (CRT) 

Antitrust Litig., 738 F. Supp. 2d 1011, 1017 (N.D. Cal. 2010)). 

However, the situation that confronted the Court's judicial 

experience and common sense in 2010 is not entirely comparable to 

this case's posture, presented three years later. Plaintiffs

participated in but opted out of other class actions in the MDL. 

See Compl. ¶ 220. Plaintiffs also claim to have "gained access to 

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United States District Court

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discovery . . . " that led to "direct evidence that Thomson SA and 

Thomson Consumer participated in bilateral and multilateral 

meetings with CRT co-conspirators." Opp'n at 5. If these claims 

are true, the Court cannot see why Plaintiffs did not plead 

anything beyond threadbare allegations and legal conclusions. See

Twombly, 550 U.S. at 555. The Court recognizes the difficulty of 

pleading certain facts in complex, global antitrust cases, but the 

Court does not find that meeting the pleading standards of Rules 8 

and 9(b) is insurmountable when, according to Plaintiffs' own 

words, they have evidence of Defendant's wrongdoing and have been 

involved in this case for years.

Accordingly, the Court GRANTS Defendant's motion to dismiss 

Plaintiffs' claims. Plaintiffs have leave to amend its complaint 

to meet the pleading standards of Rules 8 and 9(b). 

B. The Stay of Discovery

The parties also dispute the case's former Special Master's 

decision to stay discovery in this matter. See ECF Nos. 1820 

("Stay"), 1839 ("Obj'ns to Stay"), 1866 ("Resp. to Obj'ns"), 1889 

("Reply"). The Special Master stayed discovery until resolution of 

Defendant's motion to dismiss, noting that the parties could 

request consideration of the stay after that point. Stay at 2-3. 

Even so, the parties briefed responses to the Stay before the Court 

decided the motion to dismiss. The Court does not find those 

briefs helpful at this point, since they address arguments about 

dismissal that the Court declined to address in this Order. 

Further, given the present failure of Plaintiffs to state a 

plausible claim against Defendant, the Court does not see a good 

reason to lift the stay. As the Special Master ordered, under his 

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authority to control discovery, the parties may request 

reconsideration of the stay now that the Court has issued its order 

on Defendant's motion to dismiss.

V. CONCLUSION

As explained above, the Court GRANTS Defendant Thomson 

Consumer Electronics, Inc.'s motion to dismiss Plaintiffs Sharp 

Electronics Corp. and Sharp Electronics Manufacturing Co. of 

America, Inc.'s complaint. Plaintiffs have thirty (30) days from 

this Order's signature date to file an amended complaint. Failure 

to do so may result in dismissal of their claims against Defendant 

with prejudice.

IT IS SO ORDERED.

Dated: September 26, 2013

UNITED STATES DISTRICT JUDGE

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