Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_13-md-02420/USCOURTS-cand-4_13-md-02420-93/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:15 Antitrust Litigation

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United States District Court 

Northern District of Californi

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

IN RE: LITHIUM ION BATTERIES 

ANTITRUST LITIGATION Case No.: 13-MD-2420 YGR

ORDER GRANTING IN PART INDIRECT 

PURCHASER PLAINTIFFS’ MOTION TO AMEND 

COMPLAINT

 

Re: Dkt. No. 1033 

This Order Relates to: 

 

All Indirect Purchaser Actions

On January 22, 2016, in conjunction with their motion for class certification, Indirect 

Purchaser Plaintiffs (referred to herein as “IPPs” or “plaintiffs”) moved to amend their complaint 

to conform the complaint to the narrower class proposed for certification and substitute certain 

putative class representatives. (Dkt. No. 1033 (“Mot.”).) Defendants partially opposed the 

motion. (Dkt. No. 1075 (“Oppo.”).)1

Having carefully considered the papers submitted,2 the record in this case, and the 

arguments of counsel, and good cause shown, the Court GRANTS IN PART the motion. 

I. BACKGROUND 

This multidistrict litigation stems from allegations of a multi-year conspiracy among 

Japanese and Korean corporations and their U.S. subsidiaries to fix the prices of lithium ion 

battery cells, the chemical core of rechargeable batteries found ubiquitously in consumer 

electronics products. The IPPs sue for injunctive relief under federal antitrust law, but seek money 

damages under state antitrust and consumer protection laws. The IPPs seek to represent classes of 

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 Defendants do not oppose the narrowing of the class definition or the substitution of 

Donna Shawn for her deceased husband David Shawn. (Oppo. at 6.) 

2

 For its ease of reference, the Court directs the parties going forward not to incorporate by 

reference sections from their earlier briefs, as defendants have done here. 

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purchasers who bought lithium ion batteries and battery products for their own use. 

The instant motion was filed in conjunction with the IPPs motion for class certification, 

which is not yet fully briefed. (Dkt. No. 1036.) IPPs seek certification of the following 

nationwide class: 

All persons and entities who, as residents of the United States and 

during the period from January 1, 2000 through May 31, 2011, 

indirectly purchased new for their own use and not for resale one of 

the following products which contained a lithium-ion cylindrical 

battery manufactured by one or more defendants or their coconspirators: (i) a portable computer; (ii) a power tool; (iii) a 

camcorder; or (iv) a replacement battery for any of these products. 

Excluded from the class are any purchases of Panasonic-branded 

computers. Also excluded from the class are any federal, state, or 

local governmental entities, any judicial officers presiding over this 

action, members of their immediate families and judicial staffs, and 

any juror assigned to this action. 

(Dkt. No. 1036 at 1.) This proposed class is narrower than the class described in the operative 

complaint, which is not limited to these specific products containing “cylindrical” lithium-ion 

batteries, but also covers other finished products containing prismatic and polymer batteries or the 

batteries themselves. (See Dkt. No. 519 ¶ 476; Dkt. No. 1080 (“Reply”) at 1.) IPPs suggest the 

proposed class should be governed by California law. (Id.) In the alternative, they seek 

certification of a class, governed by California law, covering thirty specific states. (Id.) Finally, if 

the Court declines to certify either of the aforementioned classes, they propose certification of 

separate state law classes for twenty-four identified states. (Id.) IPPs also seek certification of a 

class covering certain local California governmental entities. (Id.) 

The IPPs’ proposed Fourth Consolidated Amended Class Action Complaint features 37 

named plaintiffs, including three governmental entities. (Dkt. No. 1033-1 ¶¶ 393-429.) As 

compared to the operative complaint, the proposed complaint seeks withdrawal of 24 named 

plaintiffs,3

 14 of whom will not be replaced by a substitute.4 Defendants prepared a chart which 

 3

 Plaintiffs agree to the dismissal of named plaintiff Kevin Young’s claims with prejudice. 

(Mot. at 4.) Young was one of several California named plaintiffs, many of whom remain in the 

proposed amended complaint. As noted above, defendants have agreed to the substitution of 

Donna Shawn for her late husband David Shawn as Michigan representative. Plaintiffs seek to 

dismiss the following eight named plaintiffs’ claims without prejudice: Thomas Tuohy (Arizona), 

Gerasimo Molfetas (Florida), KCN Services (Hawaii), Kathryn Knowles (Illinois), Kirsten Luenz 

(Kansas), Michael D’Orazio (Michigan), Angela Turner (Nevada), and Sue Hiller (Utah). (Id.) 

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summarizes the status of the remaining and withdrawing named plaintiffs and the proposed 

substitutes, as well as the proffered basis for each withdrawal. (Dkt. No. 1075-2.)5 Reasons for 

withdrawal include named plaintiffs who do not fall within the narrowed class definition, were 

discovered to have non-qualifying purchases (e.g., purchases outside the class period), or chose to 

no longer participate in the case (purportedly, in the case of “some,” as a result of defendants’ 

discovery demands). 

II. LEGAL STANDARD 

Pursuant to Federal Rule of Civil Procedure 21, the Court may “add or drop” parties “on 

just terms.” Courts addressing motions under Rule 21 typically review the request under the 

framework of Rule 15(a), which provides that leave to amend should be freely given when justice 

so requires. See 6 Fed. Prac. & Proc. Civ. § 1479 (3d ed.); Fed. R. Civ. P. 15(a). Factors the 

Court should consider include the presence or absence of undue delay, bad faith, undue prejudice, 

or repeated failure to cure deficiencies by previous amendment or futility of the proposed 

amendment. See Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 538 (9th Cir. 1989) (citing 

Foman v. Davis, 371 U.S. 178, 182 (1962)). Prejudice to the opposing party is the crucial factor 

and “carries the greatest weight.” See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 

1051-52 (9th Cir. 2003). “Leave to amend need not be given if a complaint, as amended, is 

subject to dismissal.” Moore, 885 F.2d at 538. 

III. DISCUSSION 

Defendants address the Rule 15(a) factors, arguing leave to amend is not warranted. 

Defendants’ most persuasive argument relates to proposed substitutes who purchased certain 

Apple products that do not appear to contain cylindrical batteries—in which case, they would fall 

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 Plaintiffs propose substituting in eleven new representatives, including two for departing 

Illinois plaintiff Kathryn Knowles: Hathaway & Associates (Washington, D.C.), Keith Uehara 

(Hawaii), John Kopp and Joseph Pankow (Illinois), Drew Fennelly (Kansas), Donna Shawn 

(Michigan), Cindy Booze (Nebraska), Matthew Ence (Nevada), Caleb Batey (Tennessee), David 

Reymann (Utah), and Gail Murphy (Vermont). 

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 Plaintiffs’ responsive chart was subsequently filed at Docket Number 1137. 

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outside of the narrowed proposed class definition.6

Defendants also contend the motion should be denied because certain withdrawing 

representatives purportedly lack standing. Defendants argue claims of withdrawing 

representatives who lack standing should be dismissed without leave to amend. 

The Court addresses each issue in turn. 

A. Rule 15(a) Factors 

The Court addresses the three factors raised by defendants—(1) timeliness, (2) undue 

prejudice, and (3) futility—and finds that on balance leave to amend is warranted except as to the 

five proposed substitutes who allege purchases of likely non-qualifying products.7

1. Timeliness 

Defendants contend the motion is untimely because it was filed contemporaneously with 

plaintiffs’ motion for class certification. However, there is no bright-line rule calling for denial of 

leave to amend under such circumstances. Indeed, the case cited by defendants for that 

proposition involved denial of leave to amend based on both timeliness concerns and futility in 

light of the simultaneous denial of certification. See In re Flash Memory Antitrust Litig., No. C 

07-0086 SBA, 2010 WL 2332081, at *17 (N.D. Cal. June 9, 2010). 

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 Those proposed substitutes are Keith Uehara (Hawaii), Joseph Pankow (Illinois), David 

Reymann (Utah), Gail Murphy (Vermont), and Hathaway & Associates (Washington, D.C.). The 

proposed amended complaint lists only purchases of Apple laptops for each of these substitutes. 

Defendants submitted evidence strongly suggesting the particular models at issue, to the extent 

that information was provided by plaintiffs, did not contain cylindrical batteries. Plaintiffs have 

agreed to withdraw Pankow, Reymann, Murphy, and Hathaway & Associates from the case if 

discovery from Apple confirms their purchases did not contain cylindrical batteries. (Dkt. No. 

1137 at 2.) Plaintiffs contend Uehara should be allowed as a substitute regardless because he also 

purchased a Sony laptop in 2002, however that purchase is not alleged in the proposed amended 

complaint. (Id.) 

7

 The Court rejects defendants’ contention that substitution is never appropriate prior to 

class certification. The authority cited by defendants involved circumstances where all of the 

named representatives in a particular case sought to withdraw. See Skilstaf, Inc. v. CVS Caremark 

Corp., No. 09-CV-02514, 2010 WL 199717, at *6 (N.D. Cal. Jan. 13, 2010); Velazquez v. GMAC 

Mortgage Corp., No. 08-CV-05444, 2009 WL 2959838, at *2 (C.D. Cal. Sept. 10, 2009). Those 

cases are apparently premised on the proposition that the withdrawal, in the absence of a certified 

class, eliminates the controversy entirely. Here, many named representatives do not seek 

withdrawal and continue to pursue certification of a nationwide class. Under such circumstances, 

and in light of the complex nature of this litigation, the Court finds judicial economy warrants 

substitution. 

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Here, many of the withdrawn representatives are apparently departing the case as a result 

of the narrowed scope of the action or out of a personal unwillingness to further participate. To 

the extent that certain named plaintiffs are withdrawing as a result of the discovery that they 

arguably made no qualifying purchase or lack proof of purchase, defendants contend such 

circumstances should have been ascertained by plaintiffs earlier in the litigation. However, due to 

the complex nature of this case, detailed discovery pursued by defendants may have revealed 

certain deficiencies not immediately apparent from a reasonable preliminary investigation by class 

counsel. To the extent that several months passed after plaintiffs learned of certain of these 

deficiencies before moving to amend, judicial economy in this multidistrict litigation supports 

plaintiffs’ approach of waiting a reasonable period of time to ascertain and consolidate all 

necessary amendments in a single request.8 The alternative approach of numerous seriatim filings 

over the course of several months apparently called for by defendants would not have been 

efficient for the parties or the Court.9

2. Undue Prejudice 

Defendants contend they would suffer undue prejudice if amendment is allowed because 

they have conducted substantial discovery regarding the outgoing representatives and defended 

state law claims that lacked an appropriate representative. Except as to the five proposed 

substitutes who purchased likely non-qualifying Apple products, the Court finds no risk of undue 

prejudice. Despite attorney argument in their filings, the Court’s questioning during oral argument 

revealed no such prejudice.10 Only minimal discovery was taken in the cases of many 

 8

 Of course, plaintiffs ultimately filed three such requests, the first being procedurally 

deficient and the second withdrawn and amended soon thereafter, but the intention was proper 

even if the execution was lacking. 

9

 Defendants also argue Rule 16(b)’s “good cause” standard applies because plaintiffs 

failed to file their motion for leave to amend by the November 30, 2015 deadline set by the 

Magistrate Judge. See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 608 (9th Cir. 1992). 

The record demonstrates that plaintiffs did file a motion for leave to amend by the deadline. (Dkt. 

No. 982.) However, as plaintiffs were still in the process of drafting their motion for class 

certification, and anticipated a narrowing of the class definition, considerations of judicial 

economy supported withdrawing that motion. The Court finds good cause under these 

circumstances to permit the subsequent filing past the deadline set by the Magistrate Judge. 

10 Defendants are cautioned to avoid overstating arguments unsupported with facts. 

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withdrawing representatives for whom substitution is sought. Defendants also fail to establish any 

substantial prejudice resulting from defending against the state law claims. Plaintiffs still seek 

certification of a nationwide class and discovery and motion practice would not have been 

substantially limited even if certain state representatives were previously withdrawn. Moreover, 

defendants still have nearly three months to prepare their opposition to IPPs’ class certification 

motion in light of these amendments. 

However, with respect to the five proposed substitutes who purchased potentially nonqualifying products, the Court finds defendants would be unduly prejudiced were substitution 

permitted as the pleadings and scope of the class certification motion would remain in flux until 

the issue is resolved at some later date. In the meantime, defendants need to prepare their 

opposition to IPPs’ complex class certification motion. Defendants should not have to contend 

with a moving target well after the motion was filed. 

3. Futility 

Finally, defendants contend amendment is futile as to the five substitutes who purchased 

products that did not contain cylindrical batteries. As noted, the complaint lists only the 

challenged products for those individuals, and recent unsupported assertions by plaintiffs that 

proposed substitute Uehara made a separate qualifying purchase is not compelling in such 

circumstances. The Court finds that the proposed amendment (which does not mention Uehara’s 

purported Sony purchase) is likely futile as to these proposed substitutes in light of the evidence 

put forth by defendants, pending additional confirmatory discovery from Apple. At this late 

juncture, with IPPs’ class certification motion pending, the Court will not permit the indefinite 

delay where futility is established with a high degree of likelihood. 

B. Standing 

Defendants contend certain withdrawing plaintiffs lacked standing to pursue their claims 

and therefore no substitutions should be allowed and their claims dismissed without leave to 

amend. Plaintiffs rightly point out that standing is not challenged as to several named plaintiffs, 

however, and this Court’s subject matter jurisdiction over the case is therefore not in dispute. 

Plaintiffs also continue to pursue certification of a nationwide class under California law. If a 

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nationwide class is certified, defendants’ challenge—which seeks dismissal with prejudice of 

certain state law claims that purportedly lacked a representative with standing—may become 

largely moot. The Court therefore declines to resolve this dispute at the present juncture. If the 

Court ultimately declines to certify the nationwide class, defendants may bring their standing 

challenge at that time and seek dismissal of specified state law claims. 

IV. CONCLUSION 

For the foregoing reasons, the Court GRANTS IN PART IPPs’ motion to file a Fourth 

Consolidated Amended Class Action Complaint revising their class definition and class 

representatives to accord with their pending motion for class certification. The motion is DENIED

with respect to substitution by the five substitutes—Keith Uehara (Hawaii), Joseph Pankow 

(Illinois), David Reymann (Utah), Gail Murphy (Vermont), and Hathaway & Associates 

(Washington, D.C.)—whose only basis for standing asserted in the proposed amended complaint 

is the purchase of certain Apple products which likely did not contain cylindrical batteries. The 

motion is otherwise GRANTED. Plaintiffs shall file their amended complaint within five (5) days 

of the date of this Order. 

This Order terminates Docket Number 1033. 

IT IS SO ORDERED. 

Dated: March 14, 2016 

______________________________________ 

 YVONNE GONZALEZ ROGERS

 UNITED STATES DISTRICT COURT JUDGE

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