Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05944/USCOURTS-cand-3_07-cv-05944-106/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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Case No. 07-5944 SC

ORDER DENYING DEFENDANTS' 

MOTION TO CERTIFY ORDER FOR 

INTERLOCUTORY APPEAL

I. INTRODUCTION

On November 29, 2012, this Court entered an Order granting in 

part and denying in part Defendants' joint motion for summary 

judgment against nine members of a putative class of alleged direct 

purchaser plaintiffs ("Named DPP(s)").1 ECF No. 1470.2 Now before 

the Court is Defendants' joint motion to certify the November 29 

Order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). 

 

1 The nine Named DPPs are: Arch Electronics, Inc.; Crago d/b/a Dash 

Computers, Inc.; Electronic Design Company; Meijer, Inc. and Meijer 

Distribution, Inc.; Nathan Muchnick, Inc.; Orion Home Systems, LLC; 

Radio & TV Equipment, Inc.; Royal Data Services, Inc.; and Studio 

Spectrum, Inc. The Named DPPs are only nine of the thirteen 

members of the entire putative DPP class. As explained in Section 

II infra, the term "direct purchaser" is a misnomer as applied to 

the Named DPPs, who are actually indirect purchasers. However, the 

Court uses the term "DPP" to stay consistent with past orders and 

to differentiate the Named DPPs from a putative class called the 

indirect purchaser plaintiffs, as well as from the direct action 

plaintiffs. 

2 In re Cathode Ray Tube Antitrust Litig., No. C–07–5944–SC, 2012 

WL 5987861, 2012 U.S. Dist. LEXIS 162762 (N.D. Cal. Nov. 29, 2012) 

(hereinafter "Nov. 29 Order"). 

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The motion is appropriate for decision without oral argument. Civ. 

L.R. 7-1(b). For the reasons explained below, the motion is 

DENIED.

II. BACKGROUND

Defendants' motion for summary judgment against the Named 

DPPs, the motion at issue in the Nov. 29 Order, argued that the 

Named DPPs lacked antitrust standing under Illinois Brick Co. v. 

Illinois, 431 U.S. 720 (1977). See November 29 Order at *1. 

Illinois Brick sets forth a straightforward rule about standing in 

antitrust cases: only the first party in a chain of distribution to 

purchase a price-fixed product has standing to sue for antitrust 

violations under § 4 of the Clayton Act, 15 U.S.C. § 15. Id. 

Under this rule, Defendants claimed the Named DPPs could not bring 

an antitrust suit, because they are not true direct purchasers --

that is, they purchased finished products containing the allegedly 

price-fixed cathode-ray tubes ("CRTs") but not the CRTs themselves. 

Id.

However, there are exceptions to Illinois Brick's general 

rule, as the Ninth Circuit recently confirmed in In re ATM Fee 

Antitrust Litig., 686 F.3d 741, 749 (9th Cir. 2012). One exception 

is the "co-conspirator exception," under which "an indirect 

purchaser may bring suit where he establishes a price-fixing 

conspiracy between the manufacturer and the middlemen," if the 

conspiracy fixed the price paid by the plaintiffs. Id. (citing 

Delaware Valley Surgical Supply, Inc. v. Johnson & Johnson, 523 

F.3d 1116, 1123 n.1 (9th Cir. 2008); Arizona v. Shamrock Foods Co., 

729 F.2d 1208, 1211 (9th Cir. 1984)). Another exception is the 

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"ownership or control" exception, under which "indirect purchasers 

may sue when customers of the direct purchaser own or control the 

direct purchaser . . . or when a conspiring seller owns or controls 

the direct purchaser . . . ." Id. (citing Illinois Brick, 431 U.S. 

at 736 n.16; Royal Printing Co. v. Kimberly Clark Corp., 621 F.2d 

323, 326 (9th Cir. 1980)).

In the November 29 Order, the Court granted Defendants' joint 

motion to dismiss to the extent that Defendants' motion challenges 

the Named DPPs' right to proceed under the co-conspirator 

exception, because the Named DPPs did not pay for the price-fixed 

CRTs, a required element of the co-conspirator exception. Nov. 29 

Order, supra, at *6. However, the Court found that under the Ninth 

Circuit's decisions in Royal Printing and In re ATM Fee, the 

ownership or control exception applied to the Named DPPs because

they purchased finished products incorporating the allegedly pricefixed CRTs from an entity owned or controlled by an allegedly 

conspiring defendant. Nov. 29 Order at **8-11. Accordingly, the 

Court held that, to the extent Defendants' summary judgment motion 

challenged the Named DPPs' standing on ownership and control 

grounds, the motion was denied.

Now Defendants ask the Court to certify the November 29 Order 

for interlocutory appeal, arguing that (1) whether the ownership or 

control exception applies is a controlling question of law, such 

that a successful immediate appeal from the November 29 Order could 

"dramatically curtail the scope of the putative DPP class"; (2) 

there are substantial grounds for a difference of opinion as to 

whether the ownership or control exception can apply under the 

circumstances; and (3) immediate appeal of the Nov. 29 Order would 

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materially advance this litigation's termination by settling 

whether the Named DPPs may sue under federal law. Mot. at 1-2.

III. LEGAL STANDARD

District courts may certify motions for interlocutory appeal 

where (1) the order involves a controlling question of law (2) as 

to which there is substantial ground for difference of opinion, and 

(3) an immediate appeal from the order may materially advance the 

ultimate termination of the litigation. 28 U.S.C. § 1292(b). The 

court of appeals may, but need not, accept and rule on an appeal 

certified under § 1292(b). Id.

"Section 1292(b) is a departure from the normal rule that only 

final judgments are appealable, and therefore must be construed 

narrowly." Robin James v. Price Stern Sloan, Inc., 283 F.3d 1064, 

1067 n.6 (9th Cir. 2002). As such, § 1292(b) certification should 

be used "only in extraordinary cases where decision of an 

interlocutory appeal might avoid protracted and expensive 

litigation." U.S. Rubber Co. v. Wright, 359 F.2d 784, 785 (9th 

Cir. 1966). Moreover, § 1292(b) "was not intended merely to 

provide review of difficult rulings in hard cases." Id.; see also

In re Cement Antitrust Litig., 673 F. 2d 1020, 1026 (9th Cir.

1982).

IV. DISCUSSION

A. Controlling Question of Law

"[A]ll that must be shown in order for a question to be 

controlling is that resolution of the issue on appeal could 

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materially affect the outcome of the litigation in the district 

court." In re Cement, 673 F.2d at 1026.

Defendants argue that because the Named DPPs "would lack 

standing and their claims would be dismissed absent the ownership 

or control exception . . . whether the exception may apply more 

than suffices as a controlling question of law." Mot. at 3. 

Further, Defendants state that the issue is controlling "because 

resolving who possesses standing is critical to determining the 

parameters of the putative DPP class." Id. 

The Court does not agree with Defendants. Defendants 

themselves acknowledge that the direct and indirect purchasers' 

class actions would continue regardless of the Named DPPs' 

standing, Mot. at 9, and also that the plaintiffs who opted out of 

the class actions may still be able to rely on state law causes of 

action in pursuing their claims against Defendants, id. at 10. 

Defendants might be correct that an appeal could affect part of the 

outcome of this litigation, but the scale of this case relative to 

the issue decided in the November 29 Order suggests that resolution 

of the issue on appeal would not, overall, be controlling or 

material to the outcome of this case.

B. Substantial Ground for Difference of Opinion

A substantial ground for difference of opinion may exist

"where the circuits are in dispute on the question and the court of 

appeals of the circuit has not spoken on the point, if complicated 

questions arise under foreign law, or if novel and difficult 

questions of first impression are presented." Couch v. Telescope, 

Inc., 611 F.3d 629, 633 (9th Cir. 2010) (quotations omitted). 

However, "a party's strong disagreement with the Court's ruling is 

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not sufficient for there to be a substantial ground for difference, 

nor is the possibility that settled law might be applied 

differently." Id. (quotations omitted).

Defendants argue that there is substantial ground for 

difference of opinion here for two reasons. First, they state that 

there is a substantial ground for difference of opinion as to 

whether the rationale behind the operation and control exception --

the concern that applying Illinois Brick too strictly would "close 

off every avenue for private enforcement," Royal Printing, 621 F.2d 

at 326 n.7 -- applies in this case, since other avenues of private 

antitrust enforcement may remain open. Mot. at 5-6. Second, 

Defendants claim that "reasonable minds can differ -- and have --

over whether the ownership or control exception is available where, 

as here, the plaintiff did not purchase the allegedly price-fixed 

product (CRTs) at all, but rather purchased a different, downstream 

product (such as TVs and monitors)." Mot. at 7-8.

The Court disagrees that either of these arguments shows a 

substantial ground for difference of opinion per § 1292(b). The 

reason is simple. Though Defendants strongly disagree with the 

Court's decision on this matter, and indeed there is always a 

possibility that settled Ninth Circuit law might be applied 

differently, there appears to be no dispute among the circuit 

courts on the law the Court applied in its November 29 Order. 

Indeed, the Ninth Circuit has affirmed multiple times that Royal 

Printing controls in cases like this one. In re ATM Fee, 686 F.3d 

at 756-57; Delaware Valley, 523 F.3d at 1121; Freeman v. San Diego 

Ass'n of Realtors, 322 F.3d 1133, 1146 & n.12 (9th Cir. 2003), cert 

denied, 540 U.S. 940 (2003). Defendants cite no cases suggesting 

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that other circuits disagree. Moreover, this Court has applied 

Royal Printing in a manner consistent with the November 29 Order in 

a number of other cases. See, e.g., In re TFT-LCD (Flat Panel) 

Antitrust Litig., No. M 07-1827 SI, 2012 WL 5869588, at *3 (N.D. 

Cal. Nov. 28, 2012); In re Optical Disk Drive Antitrust Litig., No. 

3:10–md–2143 RS, 2012 WL 1366718, at *6 (N.D. Cal. Apr. 19, 2012). 

The fact that the Ninth Circuit has given a straightforward rule

indicates that there is no substantial ground for difference of 

opinion on this point.

C. Immediate Appeal Beneficial

If "present appeal promises to advance the time for trial or 

to shorten the time required for trial, appeal is appropriate."

Dukes v. Wal-Mart Stores, Inc., No. C 01–02252 CRB, 2012 WL 

6115536, at *5 (citations omitted); see also In re Cement, 673 F.3d 

at 1027. The ultimate question is whether permitting an 

interlocutory appeal would "minimiz[e] the total burdens of 

litigation on parties and the judicial system by accelerating or at 

least simplifying trial court proceedings." Id. 

Defendants argue that interlocutory review will materially 

advance the resolution of this litigation by resolving whether the 

Named DPPs have antitrust standing, establishing the scope of the 

putative DPP class before class-certification briefing, altering 

the parties' settlement posture, potentially reducing Defendants' 

costs of defending claims in this case, and determining whether the 

opt-out plaintiffs can proceed on their federal claims. Mot. at 9. 

Defendants also argue, more generally, that clarifying Royal 

Printing's scope will materially advance the termination of this 

litigation by allowing the Ninth Circuit to "put to rest" the 

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uncertainty surrounding the contours of the ownership and control 

exception. Id. As to the last argument, the Court already 

addressed the fact that the Ninth Circuit has made itself clear on 

this issue. Supra § IV.B. Further, Defendants' argument that an 

altered settlement posture counsels granting the appeal is 

unconvincing, since appeal would almost always modify parties' 

settlement postures in any given case. 

The Court also finds Defendants' other arguments unavailing.

It is not certain that the Ninth Circuit would resolve this issue 

prior to the certification of a class in this case unless the Court 

were to stay the case, which it is unwilling to do, since this case 

has been pending since November 2007. Moreover, appeal of the 

November 29 Order would not hasten the termination of this 

litigation because both putative classes and the DAPs would still 

have numerous claims left to litigate, even though some federal 

claims might be extinguished as to some plaintiffs. The Court does

not find that certifying the November 29 Order for interlocutory 

appeal would be beneficial to the termination of this case. 

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V. CONCLUSION

For the reasons given above, Defendants' motion to certify the 

November 29 Order for interlocutory appeal pursuant to 28 U.S.C. § 

1292(b) is DENIED. 

IT IS SO ORDERED.

Dated: February ___, 2013

UNITED STATES DISTRICT JUDGE

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