Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-16421/USCOURTS-ca9-12-16421-0/pdf.json

Parties Involved:
Brian Albee
Appellant
Mary Louise Fowler
Appellant
Humberto Gonzalez
Appellant
Bernard Gross
Appellant
Susan Keelin
Appellant
Walter Kvasnik
Appellant
Samuel D. Leggett
Appellant
Dan Oliver
Appellant
Jeannie Oliver
Appellant
Panasonic Corporation
Appellee
Panasonic Corporation of North America
Appellee
SD-3C LLC
Appellee
Sandisk Corporation
Appellee
Joe Shaw
Appellant
Rhonda Shultz
Appellant
Joe Solo
Appellant
Kou Srimounghanch
Appellant
Toshiba Corporation
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DAN OLIVER; JEANNIE OLIVER; JOE

SOLO; BERNARD GROSS; SUSAN

KEELIN; WALTER KVASNIK; KOU

SRIMOUNGHANCH; HUMBERTO

GONZALEZ; SAMUEL D. LEGGETT;

BRIAN ALBEE; MARY LOUISE

FOWLER;JOE SHAW, On their own

behalves and on behalf of all others

similary situated; RHONDA SHULTZ,

Plaintiffs-Appellants,

v.

SD-3C LLC; PANASONIC

CORPORATION; PANASONIC

CORPORATION OF NORTH AMERICA;

TOSHIBA CORPORATION; SANDISK

CORPORATION,

Defendants-Appellees.

No. 12-16421

D.C. No.

3:11-cv-01260-

JSW

OPINION

Appeal from the United States District Court

for the Northern District of California

Jeffrey S. White, District Judge, Presiding

Argued and Submitted

December 5, 2013—San Francisco, California

Filed May 14, 2014

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2 OLIVER V. SD-3C

Before: Ronald M. Gould and Richard A. Paez,

Circuit Judges, and David A. Ezra, District Judge.*

Opinion by Judge Paez

SUMMARY**

Antitrust

The panel reversed the dismissal as time-barred of an

action in which purchasers of SD digital memory cards

alleged that Panasonic Corp. and other defendants violated

federal and state antitrust laws by conspiring to fix the price

for SD cards and engaging in improper practices with respect

to the licensing of their patents to other manufacturers of SD

cards.

Distinguishing Samsung Electronics Co. v. Panasonic

Corp., 12-15184, 2014 WL 1328318 (9th Cir. Apr. 4, 2014),

the panel held that because the plaintiffs only sought

injunctive relief under § 16 of the Clayton Act, their federal

antitrust claim was subject to the equitable doctrine of laches

and not the four-year statute of limitations in § 4B of the

Clayton Act. The panel held that the plaintiffs’ allegations in

their first amended complaint were sufficient to establish that

laches was not a bar to their federal antitrust claim because a

* The Honorable David A. Ezra, District Judge for the U.S. District

Court for the Western District of Texas, sitting by designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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OLIVER V. SD-3C 3

continuing violations exception and a speculative damages

exception for computing the laches period both applied.

The panel also reversed the district court’s dismissal of

the plaintiffs’ antitrust claim under California’s Cartwright

Act and instructed that on remand, the district court should

apply the California Supreme Court’s decision in Aryeh v.

Canon Bus. Solutions, Inc., 55 Cal. 4th 1185 (2013), in

determining whether the Cartwright Act claim was timely

filed.

COUNSEL

Amanda Bonn (argued), Susman Godfrey LLP, Los Angeles,

California; Max L. Tribble Jr., Joseph S. Grinstein, Eric J.

Mayer, Susman GodfreyLLP, Houston, Texas, for PlaintiffsAppellants Dan Oliver, Jeannie Oliver, Joe Solo, Bernard

Gross, Susan Keelin, Walter Kvasnik, Kou Srimounghanch,

Humberto Gonzalez, Samuel D. Leggett, Brian Albee, Mary

Louise Fowler, and Joe Shaw, on their own behalves and on

behalf of all others similarly situated, and Rhonda Shultz.

Christopher B. Hockett (argued), Davis Polk & Wardwell

LLP, Menlo Park, California, for Defendant-AppelleeSD-3C,

LLC; Jeffrey L. Kessler, Winston & Strawn LLP, New York,

New York, for Defendants-Appellees Panasonic Corporation

and Panasonic Corporation of North America; Richard S.

Taffet, Bingham McCutchen LLP, New York, New York, for

Defendant-Appellee SanDisk Corporation; and Daniel M.

Wall, Latham & Watkins, San Francisco, California, for

Defendant-Appellee Toshiba Corporation.

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4 OLIVER V. SD-3C

OPINION

PAEZ, Circuit Judge:

In this antitrust suit, Plaintiffs, purchasers of SD digital

memorycards, allege thatDefendants Panasonic Corporation,

Toshiba Corporation, SanDisk Corporation, and SD-3C, LLC

(collectively“Defendants”) violated federal and state antitrust

laws by conspiring to fix the price for SD cards and engaging

in improper practices with respect to the licensing of

Defendants’ patents to other manufacturers of SD cards. The

district court dismissed Plaintiffs’ claims as time-barred. 

Reviewing de novo, we reverse. Von Saher v. Norton Simon

Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir.

2010).1

Recently, in a related action, Samsung Electronics Co.,

Ltd. v. Panasonic Corp., 12-15185, 2014 WL 1328318 (9th

Cir. Apr. 4, 2014), we held that the district court erred in

concluding that the Clayton Act’s four-year statute of

limitations barred Samsung Electronics Company’s antitrust

claims for damages and injunctive relief against Panasonic

Corporation, Panasonic Corporation of North America, and

SD-3C. In this case, unlike the plaintiff in Samsung,

Plaintiffs only seek injunctive relief under section 16 of the

Clayton Act, 15 U.S.C. § 26. Because Plaintiffs seek only

injunctive relief under federal law, their federal antitrust

claim is subject to the equitable doctrine of laches and not the

four-year statute of limitations in section 4B of the Clayton

Act, 15 U.S.C. § 15b. Taking Plaintiffs’ allegations in the

First Amended Complaint (“FAC”) as true, as we must at this

stage of the litigation, we conclude that they are sufficient to

 

1

 We have jurisdiction under 28 U.S.C. § 1291.

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OLIVER V. SD-3C 5

establish that laches is not a bar to Plaintiffs’ federal antitrust

claim. Accordingly, we reverse and remand for further

proceedings.

I

In giving factual context for the federal and state antitrust

claims, Plaintiffs allege essentially the same facts regarding

the development of SD cards as those alleged in Samsung. 

We therefore draw liberally from our Samsung opinion in

setting the stage for Plaintiffs’ lawsuit and their challenge to

the district court’s dismissal order.

SD cards are the dominant form of flash memory card on

the market, and are widely used in consumer electronics

devices such as cellular phones and digital cameras. In 1999,

Panasonic, Toshiba, and SanDisk developed SD cards as a

modified proprietary format of the flash memory cards then

available, created the SD Group to promote their use, and

created SD-3C to license the format to manufacturers. In

2003, Defendants created a standard license (the “2003

license”) that contained a clause imposing a 6 percent royalty

on SD cards sold by manufacturers who were not members of

the SD Group.

In 2005 and 2006, Defendants developed two new forms

of SD cards: the high capacity SD card (“SDHC”) which was

the same physical size as the first-generation product, but

used distinct software to give it a substantially higher storage

capacity than the original; and the much smaller microSD

card, designed for use in mobile phones. By its terms, the

2003 license did not cover these new formats. The SD group

met in the fall of 2006 and adopted an “Amended and

Restated SD Memory Card License Agreement” (the “2006

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6 OLIVER V. SD-3C

license”), which contained the same 6 percent royalty terms

for non-SD Group manufacturers of the two new formats as

the 2003 license had required for the original cards.

The 2006 license also included a “fair market price”

provision pursuant to which Defendants were authorized to

determine the “fair market price” of SD cards and to use that

price as a baseline in calculating royalties. Plaintiffs allege

that this provision shows that Defendants, who control 70

percent of the SD market, intended to “agree upon and charge

a ‘fair market price’ for their SD [c]ards,” i.e. to fix the price

for SD cards in violation of federal and state antitrust laws.2

Plaintiffs further allege that, in addition to fixing the price of

SD cards, Defendants’ licensing practices violate antitrust

laws because Defendants do not separately license certain

patents that are part of the SD-3C patent pool and,

furthermore, refuse to negotiate the terms of the SD Card

License.

Plaintiffs filed their lawsuit on March 15, 2011 and, of

note here, they allege that they purchased SD cards on or after

March 15, 2007. Plaintiffs’ first claim for relief seeks an

injunction under section 16 of the Clayton Act, 15 U.S.C.

§ 26, to enjoin Defendants’ alleged violations of section 1 of

the Sherman Act, 15 U.S.C. § 1. Unlike the corporate

plaintiff in Samsung, Plaintiffs do not seek treble damages

under section 4 of the Clayton Act, 15 U.S.C. § 15, as a

remedy for Defendants’ unlawful acts. Plaintiffs’ second

claim for relief alleges violations of California’s antitrust law,

2 Defendants argue that the allegations regarding the fair market price

provision are not sufficient to establish the existence of a price-fixing

conspiracy. We express no opinion on this issue. As set forth infra in

section IV, we leave this issue for the district court to address on remand.

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OLIVER V. SD-3C 7

the Cartwright Act, Cal. Bus. & Prof. Code § 16720. 

Plaintiffs seek treble damages in connection with this claim. 

Plaintiffs’ third, fourth, and fifth claims for relief are for:

(1) unlawful conduct in violation of California’s Unfair

Competition Law (“UCL”), Cal. Bus. & Prof. Code §17200;

(2) violations of the antitrust laws of various states, e.g.

Arizona, the District of Columbia, and Kansas;3

and

(3) unjust enrichment and disgorgement of profits.

As in Samsung, the district court dismissed Plaintiffs’

claims on the ground that they were time-barred. The district

court held that the four-year statute of limitations set forth in

section 4B of the Clayton Act, 15 U.S.C. § 15b, applied to

Plaintiffs’ claims for injunctive relief and reasoned that

Defendants’ allegedly unlawful conduct began well before

the start of the four-year limitations period. Oliver v. 3D-3C,

LLC, No. C 11-01260 JSW, 2012 WL 1835740, at *3 (N.D.

Cal. May 21, 2012). The district court dismissed Plaintiffs’

state law claims on the same ground. Id. Given the narrow

ground on which the district court dismissed Plaintiffs’

lawsuit, we need only determine whether the court properly

dismissed Plaintiffs’ federal antitrust claim as time barred.

II

Although a claim for injunctive relief under section 16 is

“analogous” to a claim for damages under section 4, section

16 provides a distinct cause of action. Int’l Tel. & Tel. Corp.

v. Gen. Tel. & Electronics Corp., 518 F.2d 913, 926 (9th Cir.

3 Plaintiffs seek to maintain their action on behalf of themselves and a

series of sub-classes consisting of consumers from various states who

purchased SD cards within the class period, which includes the period

from March 15, 2007 to the present.

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8 OLIVER V. SD-3C

1975) disapproved of on other grounds by California v. Am.

Stores Co., 495 U.S. 271 (1990) (“Clayton Act [§] 16

provides a private equitable remedy, analogous to the private

legal remedy of Clayton Act [§] 4, as a method of

enforcement of the prohibitions of Clayton Act [§] 7.”). 

Unlike damages claims under section 4, which are subject to

section 4B’s four-year statute of limitations, there is no

statute of limitations for injunctive relief claims under section

16. Claims for injunctive relief, however, are subject to the

equitable defense of laches.4Id. at 928. And, “in computing

the laches period,” section 4B’s four-year statute of limitation

is used as a “guideline.” Id.; see also Samsung, 2014 WL

1328318 at *4. Therefore, in applying laches, we look to the

same legal rules that animate the four-year statute of

limitations under section 4B. Ordinarily, “[a] cause of action

in antitrust accrues each time a plaintiff is injured by an act of

the defendant and the statute of limitations runs from the

commission of the act.” Pace Indus., Inc. v. Three Phoenix

Co., 813 F.2d 234, 237 (9th Cir. 1987) (citing Zenith Radio

Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338 (1971)). 

As we discussed in our Samsung opinion, however, there are

recognized exceptions to this general rule.

First, “[i]n the context of a continuing conspiracy to

violate the antitrust laws, . . . each time a plaintiff is injured

by an act of the defendant[] a cause of action accrues to him

to recover the damages caused by that act.” Zenith, 401 U.S.

at 338. “[A]s to those damages, the statute of limitations runs

from the commission of the act.” Id. In order to restart the

4 Under the doctrine of laches, a suit seeking equitable relief will be

barred if a party has inexcusably delayed pursuing his claim and his

adversary has been prejudiced as a result. Int’l Tel. & Tel. Corp.,

518 F.2d at 926.

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OLIVER V. SD-3C 9

statute of limitations, there must be a new overt act that: (1)

is “new and independent . . . [and] not merely a reaffirmation

of a previous act,” and (2) “inflict[s] new and accumulating

injury on the plaintiff.” Pace, 813 F.2d at 238.

Second, the limitations period may start to run after the

defendant’s initial violation of the antitrust law, if it is

“uncertain” or “speculative” whether the defendants’ antitrust

violation has injured the plaintiff at the time of the violation. 

AMF, Inc. v. General Motors Corp. (In re Multidistrict

Vehicle Air Pollution), 591 F.2d 68, 72 (9th Cir. 1979) (citing

Zenith, 401 U.S. at 339); see also Samsung, 2014 WL

1328318 at *4–5. In such cases, the statute of limitations

period begins on the date that the plaintiff’s damages first

“accrued and became ascertainable.” AMF, 591 F.2d at 73. 

We hold that both exceptions apply here.

Turning first to the continuing violation exception, the

Supreme Court and federal appellate courts have recognized

that each time a defendant sells its price-fixed product, the

sale constitutes a new overt act causing injury to the

purchaser and the statute of limitations runs from the date of

the act. Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997);

see also Hennegan v. Pacifico Creative Serv., Inc., 787 F.2d

1299, 1301 (9th Cir. 1986) (holding that a new overt act

occurred each time tour operators’ shepherded tourists away

from plaintiffs’ shop in exchange for payment); In re Cotton

Yarn Antitrust Litig., 505 F.3d 274, 290–91 (4th Cir. 2007)

(“[I]n cases like this one involving allegations of ‘a

price-fixing conspiracy that brings about a series of

unlawfully high priced sales over a period of years, each

overt act that is part of the violation and that injures the

plaintiff, e.g., each sale to the plaintiff, starts the statutory

period running again.’” (quoting Klehr, 521 U.S. at 189));

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10 OLIVER V. SD-3C

Morton’s Mkt., Inc. v. Gustafson’s Dairy, Inc., 198 F.3d 823,

828 (11th Cir. 1999) amended in part, 211 F.3d 1224 (11th

Cir. 2000) (holding that each sale of milk a price-fixed price

constitutes a new overt act (citing Klehr, 521 U.S. at 189)). 

Here, Plaintiffs allege in the FAC that they purchased SD

cards on or after March 15, 2007, which is within four years

of March 15, 2011, the date on which this lawsuit was filed. 

Because Plaintiffs allege that they were injured within the

four-year limitations period, Plaintiffs have alleged sufficient

facts to show that laches does not bar their federal antitrust

claim.5

Plaintiffs’ claims are also timely under the speculative

damages exception. In Zenith, Zenith’s antitrust claim was

not time-barred because, as the Supreme Court recognized, to

require Zenith to establish damages at an earlier date would

have required Zenith to present speculative evidence

regarding Zenith’s future performance. 401 U.S. at 341–42. 

This evidence likely would have been rejected by the trial

5 Defendants argue, relying on AMF, that the alleged anti-competitive

impact caused by their combination was “permanent at initiation,” i.e. in

the early 2000s when they first allegedly combined to develop the SD

standard, and that the continued sales of SD cards at supracompetitive

prices were “but unabated inertial consequences of [their] pre-limitations

action.” 591 F.2d at 72. Therefore, Defendants argue that Plaintiffs’

lawsuit should have been filed within four years of Defendants’ initial

violation of the antitrust laws. As we explained in Samsung, “AMF is the

exception, not the rule.” Samsung, 2014 WL 1328318 at *2. In AMF,

“the unique nature of the automobile business meant that the initial refusal

to deal was an ‘irrevocable, immutable, permanent and final’ decision and

any damages that occurred during the limitations period ‘necessarily

resulted from’” the initial refusal. Id. (quoting AMF, 591 F.2d at 72). 

Here, in contrast, “the license itself did not permanently and finally

control the acts of” Defendants. Id. Defendants could have ceased

charging the price-fixed price at any time.

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OLIVER V. SD-3C 11

court had Zenith filed suit earlier. Id. Similarly, in this case,

Plaintiffs allege that they purchased SD cards in March 2007. 

Before Plaintiffs purchased SD cards, it would have been

pure speculation whether Plaintiffs would have been harmed

by Defendants’ alleged unlawful acts. Plaintiffs should not

be penalized for failing to foresee earlier that they would

enter the market for SD cards and would therefore be harmed

by Defendants’ conduct. See Samsung, 2014 WL 1328318 at

*4 (holding that the law did not require Samsung to bring suit

where it was not clear whether Samsung would enter the

market for SD cards and “the harm to Samsung . . . was

[therefore] speculative at the time of the initial wrong”).

Thus, for the foregoing reasons, we conclude that

Plaintiffs have alleged sufficient facts in the FAC to

demonstrate that laches is not a bar to their federal antitrust

claim.

III

The district court also erred in dismissing Plaintiffs’ state

law claims. The district court held that “Plaintiffs’ state

antitrust claims fall outside the statute of limitations period

for all the same reasons applicable to its federal antitrust

claims.” Oliver, 2012 WL 1835740 at *3 (citing Cal. Bus. &

Prof. Code § 16750.1; Corwin v. Los Angeles Newspaper

Serv. Bureau, Inc., 4 Cal. 3d 842, 852–53, 94 Cal. Rptr. 785,

484 P.2d 953 (1971) (stating that the Cartwright Act is

interpreted consistently with the Sherman Act)). Because we

have concluded that Plaintiffs’ federal antitrust claim is

timely, we vacate the district court’s dismissal of the state law

claims and remand. On remand, the district court should

apply the California Supreme Court’s recent decision in

Aryeh v. Canon Business Solutions, Inc. 55 Cal. 4th 1185,

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12 OLIVER V. SD-3C

1195, 151 Cal. Rptr. 3d 827, 292 P.3d 871 (2013) in

determining whether Plaintiffs’ Cartwright Act claim was

timely filed. See Samsung, 2014 WL 1328318 at *4 n.4.

IV

In addition to asserting the statute of limitations as a

defense, Defendants raise a host of additional challenges to

Plaintiffs’ claims. Because the district court has not yet

considered these issues, we leave them to the district court to

address in the first instance on remand.

V

The district court’s dismissal order is reversed and the

case is remanded for further proceedings consistent with this

opinion.

REVERSED AND REMANDED.

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