Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05944/USCOURTS-cand-3_07-cv-05944-321/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: COMPEL ARBITRATION 

Case No. 3:14-cv-02510 

VIEWSONIC CORP. 

 Plaintiff 

 v. 

 CHUNGHWA PICTURE TUBES, LTD., 

et al, 

 

 Defendants. 

I. INTRODUCTION 

 Now before the Court is Panasonic's1 motion to dismiss and 

compel arbitration of Direct Action Plaintiff ViewSonic 

Corporation's claims against Panasonic. ECF No. 2767 ("Mot."). 

ViewSonic opposes, ECF No. 2867 ("Opp'n"), and Panasonic filed a 

reply, ECF No. 2899 ("Reply"). After briefing was complete, 

ViewSonic sought leave to file a surreply, ECF No. 2916 ("Surreply 

 

1

 For simplicity the Court refers to the movants as "Panasonic," 

although in fact the movants are Panasonic Corporation, Panasonic 

Corporation of North America, and MT Picture Display Company, Ltd. 

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Mot."), see also ECF No. 2916-2 ("Surreply"), which Panasonic 

opposes, ECF No. 2921 ("Surreply Opp'n").2 Both motions are now 

fully briefed and appropriate for disposition without oral argument 

under Civil Local Rule 7-1(b). For the reasons set forth below, 

the motion for leave to file a surreply is GRANTED and the motion 

to dismiss and compel arbitration is GRANTED. 

II. BACKGROUND 

This is an antitrust case alleging price fixing in the Cathode 

Ray Tube (CRT) market. ViewSonic is a relatively late entrant to 

the case, and filed its complaint in May of 2014. ViewSonic 

alleges that Panasonic, among several other defendants, 

participated in a price fixing conspiracy in the CRT market between 

March 1, 1995 and November 25, 2007. 

 ViewSonic and Panasonic entered into an Original Equipment 

Manufacturer, or OEM, supply agreement in 1999 ("the Agreement"). 

ECF No. 2768 ("Hemlock Decl.") at Ex. A ("Agreement"). In the 

Agreement, the parties agreed to submit to arbitration "[a]ll 

disputes, controversies, claims or differences which may arise 

between the parties, out of or in relation to or in connection with 

this Agreement, or for the breach thereof . . . except as otherwise 

 

2

 Panasonic's arguments against granting leave to file a surreply 

are well taken. The arguments in Panasonic's reply brief simply 

"respond[ed] to legal arguments made in opposition." Heil Co. v. 

Curotto Can Co., No. 04-cv-1590 MMC, 2004 WL 2600134, at *1 n.1 

(N.D. Cal. Nov. 16, 2004). Nonetheless, in the interests of 

completeness and judicial efficiency, the Court GRANTS leave to 

file the surreply. Had ViewSonic not filed its surreply, the Court 

would have simply requested supplemental briefing on the very 

issues it addressed, therefore there is no reason to deny leave to 

file the surreply only to then request additional briefing on these 

issues. 

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provided herein."3 Agreement at § 17.3. 

 Neither party argues that the Agreement or the arbitration 

clause is invalid. Instead, both sides disagree over the length of 

time covered by the Agreement and the scope of the arbitration 

clause, as well as whether those issues should be resolved by the 

Court or in arbitration. 

III. LEGAL STANDARD 

Section 4 of the Federal Arbitration Act ("FAA") permits "a 

party aggrieved by the alleged failure, neglect, or refusal of 

another to arbitrate under a written agreement for arbitration [to] 

petition any United States district court . . . for any order 

directing that . . . arbitration proceed in the manner provided for 

in [the arbitration] agreement." 9 U.S.C. § 4. 

The FAA embodies a policy that generally favors arbitration 

agreements. Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 

460 U.S. 1, 24-25 (1983). Federal courts must enforce arbitration 

 

3

 The Court notes that the Agreement along with numerous other 

portions of the parties' submission have been filed under seal. 

While the Court has previously expressed a liberal attitude toward 

motions for leave to file under seal in this matter, citing the 

enormous administrative burden that would be required if the Court 

were to review and closely analyze every claim of sealability, see 

ECF No. 1512, some of the parties' submissions on this motion, 

particularly ViewSonic's, stretch the bounds of even that leeway. 

For instance, the Court cannot imagine any reason why the words 

"arbitration clause" would be sealable or why the existence of an 

arbitration clause should be treated as confidential given that 

this is quite obviously a motion to compel arbitration. See Opp'n 

at 2:15, 2:23. Furthermore, even sealing the entire text of the 

arbitration clause seems overly broad given that (1) the terms of 

the arbitration clause itself are largely unremarkable boilerplate, 

and (2) the Court has to analyze the text of the clause in the 

context of the motion anyway. In short, the Court wishes to 

reminds the parties that while the Court has taken a liberal 

attitude towards motions to file under seal thus far, that leeway 

should not be abused. 

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agreements rigorously. See Hall St. Assoc., L.L.C. v. Mattel, 

Inc., 552 U.S. 576, 581 (2008). Courts must also resolve any 

"ambiguities as to the scope of the arbitration clause itself . . . 

in favor of arbitration." Volt Info. Scis., Inc. v. Bd. of Trs. of 

Leland Stanford Jr. Univ., 489 U.S. 468, 476 (1989). These 

policies all "appl[y] with special force in the field of 

international commerce." Mitsubishi Motors Corp. v. Soler 

Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985). 

IV. DISCUSSION 

 The parties agree that the Agreement and the arbitration 

clause are valid and cover at least some set of ViewSonic's claims. 

The remaining issues relate to the scope and interpretation of the 

Agreement, and the threshold question of whether those scope and 

interpretation issues should be resolved by the Court or in 

arbitration. 

 Borrowing somewhat from the Supreme Court's rubric in First 

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995), the 

parties have three types of disagreements in this case. First, 

ViewSonic and Panasonic disagree about whether Panasonic is liable 

to ViewSonic for price fixing in the CRT market. "That 

disagreement makes up the merits of the dispute." Id. (emphasis 

omitted). Second, they disagree about what portion of the merits 

they agreed to arbitrate. In arbitration parlance, this is a 

disagreement about the "arbitrability" of the dispute. Id. 

(emphasis omitted). Finally, they disagree about whether the Court 

or the arbitrator has the power to decide the second matter. In 

other words, who decides how much of this dispute the parties 

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agreed to arbitrate, the Court or the arbitrator? This is 

sometimes referred to as "jurisdiction to determine arbitrability." 

See Goldman, Sachs & Co. v. City of Reno, 747 F.3d 733, 738 (9th 

Cir. 2014). 

 Because the Court finds the arbitrator and not the Court has 

jurisdiction to determine arbitrability, the Court only addresses 

that point. 

A. Jurisdiction to Determine Arbitrability 

 "Both the arbitrability of the merits of a dispute and the 

question of who has the primary power to decide arbitrability 

depend on the agreement of the parties." Goldman, Sachs, 747 F.3d 

at 738 (citing First Options, 514 U.S. at 943). However, "unlike 

the arbitrability of claims in general, whether the court or the 

arbitrator decides arbitrability is 'an issue for judicial 

determination unless the parties clearly and unmistakably provide 

otherwise.'" Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d 1069, 

1072 (9th Cir. 2013) (quoting Howsam v. Dean Witter Reynolds, Inc., 

537 U.S. 79, 83 (2002)) (emphasis in original). The rule seeks to 

avoid "forc[ing] unwilling parties to arbitrate a matter they 

reasonably would have thought a judge, not an arbitrator, would 

decide. First Options, 514 U.S. at 945 (citing United Steelworkers 

v. Warrior & Gulf Navigation Co., 363 U.S. 574, 583 (1960)). 

 Panasonic makes two arguments in favor of leaving the question 

of arbitrability to the arbitration panel. First, Panasonic points 

to cases suggesting that "as a matter of federal law, any doubts 

concerning the scope of arbitral issues should be resolved in favor 

of arbitration, whether the problem at hand is the construction of 

contract language itself . . . or a like defense to arbitrability." 

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Second, Panasonic argues that the arbitration clause's references 

to the rules of procedure of the American Arbitration Association's 

("AAA") and the Japan Commercial Arbitration Association 

("JCAA") -- rules that (in Panasonic's view) expressly provide for 

arbitrators to decide arbitrability -- indicate the parties 

unmistakably intended the arbitrators, not the Court to decide 

arbitrability. 

 Panasonic's first argument is a non-starter. For the most 

part, Panasonic misses or ignores the applicable case law and 

instead seizes on a few out-of-context passages from cases that do 

not address the question of who decides arbitrability. Instead, 

the rule is clear: unless the parties clearly and unmistakably 

provide otherwise, the Court decides who determines questions of 

arbitrability. See Goldman, Sachs, 747 F.3d at 738. As a result, 

Panasonic's points about the Court "ignor[ing] the Arbitration Act 

and . . . 'becom[ing] entangled in the construction' of the OEM 

Agreement," Reply at 2, are entirely misplaced unless Panasonic 

shows the parties' intent to resolve those questions in 

arbitration. 

 Panasonic's second argument, that the reference in the 

arbitration clause to the rules of procedure for the AAA and JCAA 

evince the parties' intent to arbitrate arbitrability, fares far 

better. Cases hold that "where the parties' agreement to arbitrate 

includes an agreement to follow a particular set of arbitration 

rules -- such as the AAA Rules -- that provide for the arbitrator 

to decide questions of arbitrability, the presumption that courts 

decide arbitrability falls away, and the issue is decided by the 

arbitrator." Bank of Am., N.A. v. Micheletti Family P'ship, No. 

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08-02902 JSW, 2008 WL 4571245, at *6 (N.D. Cal. Oct. 14, 2008) 

(collecting cases). The arbitration clause at issue here provides 

that if Panasonic initiates arbitration, it will be governed by the 

AAA rules and take place in California. If, on the other hand, 

ViewSonic initiates the arbitration, it will be governed by the 

JCAA rules and take place in Osaka, Japan. As Panasonic points 

out, both the AAA and JCAA rules allow arbitrators to determine 

their own jurisdiction.4

 

 Nonetheless, ViewSonic raises three arguments to the contrary. 

First, relying on Howsam v. Dean Witter Reynolds, Inc., ViewSonic 

argues that the question of whether it intended to arbitrate claims 

based on purchases made prior to the March 12, 1999 execution of 

the Agreement is "a gateway dispute about whether the parties are 

bound by a given arbitration clause [that] raises a 'question of 

arbitrability' for a court to decide." 537 U.S. at 84. This 

argument misses Panasonic's point. Panasonic is arguing that by 

referring to the AAA and JCAA rules in the arbitration clause, the 

parties clearly and unmistakably indicated that the arbitrator, not 

the Court should resolve questions of arbitrability. If that is 

true, the result is obvious. "The question whether the parties 

have submitted a particular dispute to arbitration, i.e., the 

'question of arbitrability,' is 'an issue for judicial 

determination [u]nless the parties clearly and unmistakably provide 

 

4

 AAA Rule 7 states that "[t]he arbitrator shall have the power to 

rule on his or her own jurisdiction, including any objections with 

respect to the existence, scope, or validity of the arbitration 

agreement or to the arbitrability of any claim or counterclaim." 

Similarly, JCAA Rule 41 states that "[t]he arbitral tribunal may 

make a determination on any objection as to the existence or 

validity of an Arbitration Agreement and any other matters 

regarding its own jurisdiction." 

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otherwise.'" See id. at 83 (quoting AT&T Techs., Inc. v. Commc'ns 

Workers, 475 U.S. 643, 649 (1986)) (original emphasis omitted and 

emphasis added). Put another way, only if the Court determines 

that it, and not the arbitrators, has jurisdiction to determine 

what parts of the dispute are arbitrable does the Court actually 

resolve what claims the parties intended to submit to arbitration. 

 Second, ViewSonic relies on United Parcel Service v. Lexington 

Insurance Group, No. 12 Civ. 7961 (SAS), 2013 WL 1897777, at *2 

(S.D.N.Y. May 7, 2013), which found that because the parties' 

agreement only incorporated the AAA's procedural rules, there was 

no clear and unmistakable evidence the parties intended to 

arbitrate arbitrability, because "[t]he primary question of 

arbitrability is a substantive one." Here, the arbitration clause 

provides that the arbitration will take place "in accordance with 

the rule [sic] of procedure of the [AAA]." Agreement at § 17.3. 

Admittedly, this clause is less clear than in other cases finding 

intent to arbitrate arbitrability in arbitration clauses that 

incorporated a third party's arbitration rules (including those on 

jurisdiction). See, e.g., Oracle, 724 F.3d at 1071 (designating 

that the arbitration shall take place "in accordance with the rules 

of the United Nations Commission on International Trade Law 

(UNCITRAL)"); Poponin v. Virtual Pro, Inc., No. C 06-4019 PJH, 2006 

WL 2691418, at *9 (N.D. Cal. Sept. 20, 2006) (addressing an 

agreement that incorporated the rules of the International Chamber 

of Commerce Court of Arbitration). Further complicating matters, 

as far as the Court can determine, there is no set of exclusively 

"procedural" (or exclusively "substantive") AAA rules. 

Nonetheless, another court has found that Rule 7, which governs 

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jurisdiction to determine arbitrability, is a procedural rule of 

the AAA. See Citifinancial, Inc. v. Newton, 359 F. Supp. 2d 545, 

551-52 (S.D. Miss. Mar. 4, 2005). In light of that case and the 

substantial weight of authority finding that incorporating AAA or 

other arbitration rules constitutes "clear and unmistakable" 

evidence of intent to resolve arbitrability before the arbitral 

panel, the Court finds United Parcel Service unpersuasive. See 

Oracle, 724 F.3d at 1071 ("Virtually every circuit to have 

considered the issue has determined that incorporation of the 

American Arbitration Association's (AAA) arbitration rules 

constitutes clear and unmistakable evidence that the parties agreed 

to arbitrate arbitrability.") (collecting cases). 

 Finally, ViewSonic argues that the relevant AAA rule, Rule 7, 

only came into existence in 2000, after the Agreement was executed. 

As a result, ViewSonic believes it would be inappropriate to infer 

any intent to arbitrate arbitrability from the parties' arbitration 

clause. See Yahoo! Inc. v. Iversen, 836 F. Supp. 2d 1007, 1011-12 

(N.D. Cal. 2011) (discussing the rules in effect when the parties 

entered into their agreement). In support of this proposition, 

ViewSonic cites Gilbert Street Developers, LLC v. La Quinta Homes, 

LLC, 174 Cal. App. 4th 1185 (Cal. Ct. App. 2009), which stated that 

"in 1998 . . . the American Arbitration Association had no rule 

providing that arbitrators had jurisdiction to rule on their own 

jurisdiction. However, in September 2000, the American Arbitration 

Association adopted a new rule, R-8(a), that provided arbitrators 

could rule on their own jurisdiction." Id. at 1187-88 (citing 

Hasbro, Inc. v. Amron, 419 F. Supp. 2d 678, 685 (E.D. Pa. 2006)). 

For whatever reason, the Gilbert Street Court was mistaken about 

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those facts. As Panasonic points out, providing copies of the 

relevant rules, the precursor to Rule 7 was in effect as of at 

least January 1, 1999 -- prior to the execution of the Agreement. 

See ECF No. 2921-1 ("Supp. Hemlock Decl.") at Exs. A-B. As a 

result, there is no temporal issue with concluding that the 

parties' decision to incorporate the AAA and JCAA rules reflected 

their intent to arbitrate questions of arbitrability. 

 Because ViewSonic's arguments are unavailing, the Court finds 

that jurisdiction to determine arbitrability lies with the 

arbitrator. 

V. CONCLUSION 

 Accordingly, the Court finds that by incorporating the rules 

of procedure of the AAA and JCAA, the parties "clearly and 

unmistakably" provided for arbitration of arbitrability, and as a 

result Panasonic's motion is GRANTED. Furthermore, because the 

Court lacks jurisdiction to determine arbitrability, and the 

parties agreed to resolve such issues before the arbitrators and 

pursuant to the AAA or JCAA rules, the Court lacks jurisdiction 

even to sever ViewSonic's claims against the co-conspirators from 

its claims against Panasonic. See Reply at 6 n.3. As a result, 

the Court DISMISSES ViewSonic's complaint WITHOUT PREJUDICE, and 

leaves those questions to the arbitrators. 

 IT IS SO ORDERED. 

 Dated: December 18, 2014 

UNITED STATES DISTRICT JUDGE 

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