Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05944/USCOURTS-cand-3_07-cv-05944-244/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 DENYING THOMSON 

DEFENDANTS' MOTIONS TO 

STRIKE AND GRANTING IN PART 

AND DENYING IN PART MOTIONS 

TO DISMISS

This Order Relates To:

Tech Data Corp., et al. v. 

Hitachi, Ltd., et

al., No. 13-cv-00157

I. INTRODUCTION

Now before the Court are Defendants Thomson SA's ("Thomson 

SA") and Thomson Consumer Electronics, Inc.'s ("Thomson Consumer") 

(collectively the "Thomson Defendants") motions to strike portions 

of Plaintiffs Tech Data Corporation and Tech Data Product 

Management, Inc.'s (collectively, "Tech Data") first amended 

complaint, or alternatively to dismiss the complaint. The motions 

are fully briefed,1 and the Court finds them appropriate for 

resolution without oral argument per Civil Local Rule 7-1(b). As 

explained below, the motions to strike are DENIED, and the motions 

to dismiss are GRANTED in part and DENIED in part.

 1 ECF Nos. 2329 ("TC MTS"), 2373 ("TSA MTS"), 2409 ("Opp'n") (filed 

under seal), 2445 ("TC Reply"), 2447 ("TSA Reply") (filed under 

seal).

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II. BACKGROUND

The parties are familiar with the substantive allegations of 

this case, but the primary background facts for the present motion

are procedural. Tech Data filed its first complaint in this action 

in the Middle District of Florida on December 11, 2012. Case No. 

13-cv-00157, ECF No. 1 ("Compl."). The Judicial Panel on 

Multidistrict Litigation transferred it to the above-captioned MDL, 

after which the parties stipulated in early 2013 that no defendant 

would have to respond to Tech Data's complaint until the Court 

issued rulings on various Direct Action Plaintiffs' motions to 

dismiss other plaintiffs' complaints, which were then pending 

before the case's former Special Master. See ECF No. 1570

("Stip."). The Court issued its Order on August 21, 2013. ECF No. 

1856. Later, on September 9, 2013, Tech Data filed its first 

amended complaint, which added the Thomson Defendants as parties. 

ECF No. 1911 ("FAC"). Prior to that, no defendant had responded to 

Tech Data's original complaint by either responsive pleading or 

motion.

The Thomson Defendants now move to strike portions of Tech 

Data's FAC that name the Thomson Defendants, arguing that Tech 

Data's adding the Thomson Defendants is an improper amendment under

Federal Rules of Civil Procedure 15 and 21. In the alternative, 

the Thomson Defendants move to dismiss Tech Data's complaint, which 

concerns the same global price-fixing activities alleged against 

the Thomson Defendants in this MDL. See, e.g., ECF No. 2440 

("Thomson MTD Order") (summarizing facts and arguments regarding 

the Thomson Defendants raised in reference to other plaintiffs' 

complaints).

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III. LEGAL STANDARD

A. Motions to Strike - Rule 12(f)

Rule 12(f) of the Federal Rules of Civil Procedure states that 

a district court "may strike from a pleading an insufficient 

defense or any redundant, immaterial, impertinent, or scandalous 

matter." "The function of a 12(f) motion to strike is to avoid the 

expenditure of time and money that must arise from litigating 

spurious issues by dispensing with those issues prior to trial . . 

. ." Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993)

(quotation marks, citation, and first alteration omitted), rev'd on 

other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). 

B. Jurisdiction - Rule 12(b)(2)

Under Rule 12(b)(2) of the Federal Rules of Civil Procedure, 

defendants may move to dismiss for lack of personal jurisdiction. 

The Court may consider evidence presented in affidavits and 

declarations determining personal jurisdiction. Doe v. Unocal 

Corp., 248 F.3d 915, 922 (9th Cir. 2001). The plaintiff bears the 

burden of showing that the Court has personal jurisdiction over 

defendants. See Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 

(9th Cir. 2006). "[T]his demonstration requires that the plaintiff 

make only a prima facie showing of jurisdictional facts to 

withstand the motion to dismiss." Id. (quotations omitted). 

"[T]he court resolves all disputed facts in favor of the plaintiff 

. . . ." Id. (quotations omitted). "The plaintiff cannot simply 

rest on the bare allegations of its complaint, but uncontroverted 

allegations in the complaint must be taken as true." Mavrix Photo, 

Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) 

(quotations and citations omitted). The Court may not assume the 

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truth of allegations that are contradicted by affidavit. Data 

Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1284 (9th 

Cir. 1977).

Courts may exercise personal jurisdiction over a defendant

only if (1) a statute confers jurisdiction and (2) exercising 

jurisdiction would comport with constitutional due process. See

Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368 F.3d 

1174, 1177 (9th Cir. 2004). Since the federal Clayton Act, 15 

U.S.C. § 22, fulfills the statutory requirement for jurisdiction in 

this case, the question on this motion is whether exercising 

jurisdiction would comport with due process. For a court to 

exercise personal jurisdiction over a non-resident defendant

consistent with due process, the defendant must have "certain 

minimum contacts" with the relevant forum "such that the 

maintenance of the suit does not offend 'traditional notions of 

fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 

326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 

463 (1940)). If a defendant has sufficient minimum contacts, 

personal jurisdiction may be founded on either general jurisdiction 

or specific jurisdiction. Panavision Int'l, L.P. v. Toeppen, 141 

F.3d 1316, 1320 (9th Cir. 1998). The relevant forum for this 

case's minimum contacts analysis is the United States. Go-Video, 

Inc. v. Akai Elec. Co. Ltd., 885 F.2d 1406, 1415-16 (9th Cir. 

1989).

C. Failure to State a Claim - Rule 12(b)(6)

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 

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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, 679 (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. (citing Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 555 (2007)). 

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 

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) (quotation marks and 

citations omitted).

IV. MOTIONS TO STRIKE

The Thomson Defendants argue that under Rules 15 and 21, Tech 

Data was not entitled to name the Thomson Defendants in its FAC. 

TC MTS at 5-7; TSA MTS at 4 (incorporating the Thomson Consumer 

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motion by reference). They therefore ask the Court to strike the 

FAC's references to the Thomson Defendants.

Tech Data responds that under Rule 15(a)(1)(B), it was 

permitted to file the FAC as a matter of course because, by the 

time it filed the FAC, no defendant had filed a responsive pleading 

or motion under Rule 12(b), (e), or (f) regarding the original 

complaint, even though it had been served for more than twenty-one 

days. Opp'n at 3. The Thomson Defendants contend, however, that 

Rule 15(a)(1)(B) limits the timeframe for amendment without leave 

to within twenty-one days after service of the original pleading or 

twenty-one days after a responsive pleading or Rule 12(b) motion. 

TC Reply at 1-2. Since more than twenty-one days had passed after 

Tech Data served the original complaint, and since no defendant had 

responded to it, the Thomson Defendants claim that Rule 15(a)(1)(B) 

is inapplicable. Id. Further, according to the Thomson 

Defendants, Rule 21 would require Tech Data to obtain leave of the 

Court before joining additional parties even if Rule 15(a)(1) might 

otherwise apply, since the proceedings in this case are relatively 

advanced and the Thomson Defendants could suffer prejudice if they 

are added to the suit. Id. at 2. 

Rule 15(a)(1) states: "A party may amend its pleading once as 

a matter of course within: (A) 21 days after serving it, or (B) if 

the pleading is one to which a responsive pleading is required, 21 

days after service of a responsive pleading or 21 days after

service of a motion under Rule 12(b), (e), or (f), whichever is 

earlier." In all other cases, parties may only amend with a court 

order or the opposing party's written consent. Fed. R. Civ. P. 

15(a)(2). If none of these rules applies to permit amendment, the 

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amended complaint is improper. See Taa v. Chase Home Fin., LLC, 

No. 5:11-cv-00554 EJD, 2011 WL 4985379, at *1 (N.D. Cal. Oct. 19, 

2011).

The Thomson Defendants' reading of Rule 15 is that if twentyone days passes from the date of service, but no opposing party 

ever files a responsive pleading or Rule 12 motion, a plaintiff 

cannot amend without a court order. In support of this 

interpretation, the Thomson Defendants first cite the advisory

committee's notes to Rule 15's 2009 Amendments, which explain that 

the twenty-one day amendment allowance in response to a pleading or 

Rule 12 motion is in place so that the amending party can consider 

issues raised in those responsive papers. TC Reply at 1-2 (citing 

Fed. R. Civ. P. 15 advisory committee's note). This can avoid the 

need to decide the motion and reduce the number of issues to be 

decided, thereby expediting litigation. Id.

The Thomson Defendants' brief accurately states part of Rule 

15's purpose, but the advisory committee's notes never state that 

Rule 15's amendment-by-right allowance ends after twenty-one days 

if no party responds to the complaint. The notes only explain why 

the twenty-one day amendment period ends after service of certain 

Rule 12 motions, and why the right to amend is no longer terminated 

by the service of a responsive pleading (as in older versions of 

the rule). See Fed. R. Civ. P. 15 advisory committee's note. The 

Thomson Defendants also suggest that Tech Data is relying on an 

older, pre-amendment version of Rule 15, which permitted amendment 

"once as a matter of course before being served with a responsive 

pleading," TC Reply at 2 (citing 2008 Fed. R. Civ. P. 15(a)(1)(A), 

but neither the text of the amended Rule 15 nor the advisory 

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committee's notes supports the Thomson Defendants' position. As 

the advisory committee explains, the 2009 Amendments only removed 

the old rule's provision terminating a party's right to amend upon 

filing of a responsive pleading. Fed. R. Civ. P. 15 advisory 

committee's notes. The committee explains that this change

regarding responsive pleadings was meant to mirror the amendment 

provisions granted after responsive motions. Id. 

The Court finds no support in either the amended Rule 15 or 

the advisory commiteee's notes for the Thomson Defendants' position 

that Tech Data has no right to amend its FAC -- undisputedly a 

pleading to which a responsive pleading is required -- after 

twenty-one days if no defendants had responded to it.

Further, the Court does not find that Rule 21 limits Rule 15's 

provisions allowing Tech Data to amend by right in this case. The 

parties are correct that various courts are split on whether Rule 

21 has preference over Rule 15(a), but none of the cited law is 

binding on the Court, and the Court is not persuaded by the cases 

finding that Rule 21 controls in cases like this one. As Wright 

and Miller explain, holding that Rule 21 governs the dropping or 

adding of parties makes sense in the cases of Rules 25 and 15(c), 

which specifically concern how litigants can add or drop parties, 

but the same reasoning does not hold for the broader procedural 

allowances of Rule 15(a). See 6 Wright & Miller, Fed. Prac. & 

Proc. § 1479 (3d ed.). 

Moreover, it is not evident to the Court that Rule 21 is more 

specific than Rule 15, such that it would override Rule 15, since 

Rule 21 refers generally to adding and dropping parties by motion

(particularly in the context of joinder), while Rule 15(a) provides 

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specific guidelines for parties seeking to amend pleadings. 

"Viewed from this perspective, any attempt to change parties by 

amendment before the time to amend as of course has expired should 

be governed by Rule 15(a)(1) and may be made without leave of 

court." Id.; see also De Malherbe v. Int'l Union of Elevator 

Constructors, 438 F. Supp. 1121, 1128 (N.D. Cal. 1977) (finding 

that Rule 15 prevails over Rule 21, especially when the addition of 

new parties does not affect the interests of parties already in the 

lawsuit). This accords with the Ninth Circuit's requirement that 

amendment be granted with "extraordinary" or "extreme liberality." 

Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th 

Cir. 1990); DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th 

Cir. 1987).

Absent support from the Rules, the Thomson Defendants' 

argument is based on equity and policy. They refer to an earlier 

order in which the Court denied certain DAPs leave to amend their 

complaints to add the Thomson Defendants as parties. See TC MTS at 

8 (citing ECF No. 1959 ("Sept. 26 Order")). At the time, no 

specific facts against the Thomson Defendants had been alleged that 

would have plausibly shown why the Thomson Defendants were part of 

this suit. See Sept. 26 Order at 4-6. Accordingly, the Court held 

that allowing parties to sue the Thomson Defendants so late in this 

MDL's process would have been prejudicial. Id. at 6. However, as 

the Court recently noted in addressing the Thomson Defendants' 

motions to dismiss other DAP complaints, see generally Thomson MTD 

Order, the relevant facts have changed. The plaintiffs in this MDL 

have included specific allegations as to why the Thomson Defendants 

should be part of this case, and the Court found that these facts 

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overrode an earlier finding of prejudice, which was based on the 

insufficiency of the plaintiffs' allegations at that time. 

Now the Court does not find that reasoning so compelling. 

Tech Data, like the other plaintiffs, has alleged enough facts to 

warrant their adding the Thomson Defendants to their FAC, and the 

Court declines to adopt the Thomson Defendants' argument that Tech 

Data's amendment is too late. The Thomson Defendants can raise 

defenses like laches at a later point, as noted below, but at the 

pleading stage the Court finds Tech Data's allegations sufficient 

to move the case forward. Taking Tech Data's and the other 

plaintiffs' allegations as true, the Court sees no reason to allow 

a defendant to avoid being subject to suit simply because it was 

good at hiding its misdeeds for a long time.

For the reasons explained above, the Thomson Defendants' 

motions to strike are DENIED.

V. MOTIONS TO DISMISS

The Thomson Defendants, in the alternative, move to dismiss 

Tech Data's case. These motions are essentially the same as the 

ones the Thomson Defendants brought against Sharp and the other 

DAPs. See generally Thomson MTD Order. The Court incorporates

into this Order its earlier holdings on these issues.

First, the Court rejects Thomson SA's argument that Tech Data

failed to show that the Court has specific jurisdiction over 

Thomson SA. Tech Data's FAC is less precise on this matter than 

the other parties' complaints, but Tech Data attached to its 

opposition brief an array of evidence tying Thomson SA to the 

United States, leading the Court to find, for the same reasons 

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explained in the Thomson MTD Order, that it has specific 

jurisdiction over Thomson SA. Thomson MTD Order at 10-18. 

As to each Thomson Defendant, the Court makes the same 

findings on laches, statutes of limitations,2 and pleading matters 

described in the Thomson MTD Order. Nothing in the Thomson 

Defendants' briefs in this case has persuaded the Court that its 

analysis should change. Accordingly, the Court rejects the Thomson 

Defendants' laches arguments at this time. The Court also rejects 

their arguments on fraudulent concealment, which the Court finds 

applicable to Tech Data's case. Regardless of fraudulent 

concealment, government action tolls Tech Data's federal claim

against the Thomson Defendants per 15 U.S.C. § 16(i), as explained 

in the Thomson MTD Order.

Finally, Thomson Consumer argues that Tech Data lacks standing 

under the ownership or control exception to Illinois Brick Co. v. 

Illinois, 431 U.S. 720 (1977), which generally bars federal 

antitrust suits by indirect purchasers, permits indirect purchasers 

to sue if the direct purchaser of the allegedly price-fixed good 

was a division or subsidiary of a co-conspirator. See In re 

Cathode Ray Tube (CRT) Antitrust Litig., 911 F. Supp. 2d 857, 867 

(N.D. Cal. 2012) (citing In re ATM Fee, 686 F.3d 741, 755 (9th Cir. 

2012); Royal Printing Co. v. Kimberly Clark Corp., 621 F.2d 323, 

326-27 (9th Cir. 1980)). The Court finds Tech Data's pleadings, 

plus the additional facts noted in the opposition brief's 

 2 Tech Data concedes that no tolling doctrine applies to bring its 

California and Florida state law claims against the Thomson 

Defendants within the applicable statutes of limitations. Opp'n at 

18 n.10. The Court therefore does not analyze American Pipe

tolling in this Order.

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jurisdiction section and the Court's reasoning elsewhere in this 

case merit rejecting Thomson Consumer's argument on standing. See

generally Thomson MTD Order. Thomson Consumer can raise the issue 

again later, but as a pleading matter, the Court finds Tech Data's 

allegations sufficient.

The Court finds that all of Tech Data's state law claims 

against the Thomson Defendants are DISMISSED WITH PREJUDICE as 

untimely. The statute of limitations for Tech Data's federal claim 

is tolled by governmental action.

VI. SERVICE OF THE COMPLAINT

Tech Data states that at the time it filed its opposition 

brief, the Thomson Defendants' counsel had still refused to accept

service of the FAC. The Thomson Defendants do not appear to 

respond to this claim, but to the extent that they refuse service 

based on their belief that a foreign defendant may not be served 

via its domestic counsel, they are wrong. See ECF No. 2437 ("Order 

Denying Beijing-Matsushita Color CRT Co.'s MTD") at 8-11 

(explaining that service on a foreign defendant via domestic 

counsel is proper under Rule 4). If Tech Data has properly served 

the FAC on the Thomson Defendants via their United States counsel, 

then the Thomson Defendants have been served under Rule 4 per the 

Court's prior orders on that issue. If there is some other issue 

with service of process, the parties should raise it in a later

motion.

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VII. CONCLUSION

As explained above, the Court DENIES the Thomson Defendants' 

motions to strike. The motions to dismiss are GRANTED in part and 

DENIED in part. Tech Data's state law claims are DISMISSED WITH 

PREJUDICE. Tech Data's federal claim remains in the case.

IT IS SO ORDERED.

Dated: March __, 2014

UNITED STATES DISTRICT JUDGE

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