United States District Court

For the Northern District of California

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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: TFT-LCD (FLAT PANEL) ANTITRUST

LITIGATION

 /

This Order Relates To:

AT&T MOBILITY LLC, et al.,

Plaintiffs,

 v.

AU OPTRONICS CORP., et al.,

Defendants.

____________________________________/

MOTOROLA, INC,

Plaintiff,

 v.

AU OPTRONICS CORPORATION, et al.,

Defendants.

 /

No. M 07-1827 SI

MDL. No. 1827

No. C 09-4997 SI; No. C 09-5840 SI

ORDER DENYING TATUNG COMPANY

OF AMERICA’S MOTIONS TO DISMISS

On June 23, 2010, the Court held a hearing on Tatung Company of America’s motion to dismiss

the complaints in these cases. For the reasons set forth below, the Court DENIES the motions.

BACKGROUND

On October 20, 2009, plaintiff Motorola, Inc. (“Motorola”) filed an individual complaint in the

Northern District of Illinois against numerous domestic and foreign defendants for violations of state

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 Plaintiffs are AT&T Mobility LLC; AT&T Corp.; AT&T Services, Inc.; Bellsouth

Telecommunications, Inc.; Pacific Bell Telephone Company; AT&T Operations, Inc.; AT&T

Datacomm, Inc.; and Southwestern Bell Telephone Company. 

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 With the exception of AT&T Mobility, the amended complaint refers to all of the other

plaintiffs collectively as “AT&T.” Id. ¶ 26.

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and federal antitrust laws. Pursuant to the Judicial Panel on Multidistrict Litigation’s April 20, 2007

transfer order consolidating pretrial proceedings for a number of actions and this Court’s July 3, 2007

related case pretrial order #1, the case was designated as related to MDL No. 1827, M 07-1827 and

transferred to this Court. Also on October 20, 2009, the AT&T plaintiffs1 filed an individual complaint

in this Court against numerous domestic and foreign defendants for violations of state and federal

antitrust laws. Pursuant to the Judicial Panel on Multidistrict Litigation’s April 20, 2007 transfer order

consolidating pretrial proceedings for a number of actions and this Court’s July 3, 2007 related case

pretrial order #1, the Clerk of this Court designated this case as related to MDL No. 1827, M 07-1827.

The Motorola and AT&T complaints allege a global price-fixing conspiracy by suppliers of

liquid crystal display (LCD) panels used in a range of electronic products, including mobile wireless

handsets, two-way radios, computer monitors, and televisions. Motorola is a provider of mobile

wireless telecommunications services and sells mobile wireless devices and two-way radios; both of

these products incorporate LCD panels. Motorola Amended Compl. ¶¶ 23, 25. Motorola brings suit

based on its own purchases of LCD panels and products, as well as purchases made by a number of

Motorola subsidiaries that have assigned their claims to Motorola. Id. ¶ 24.

Plaintiff AT&T Mobility is a provider of mobile wireless telecommunications services and sells

mobile handsets to its customers. AT&T Amended Compl. ¶ 5. Plaintiff AT&T2

 is a provider of voice

and data communications services, including traditional and long-distance services, internet access

services, private enterprise network services, and other telecommunications services. Id. ¶ 6. The

amended complaint alleges that AT&T Mobility purchased more than 300 million mobile wireless

handsets for resale to its customers, and that “as a result of defendants’ conspiracy to fix the price of

LCD Panels, the prices of these handsets containing LCD Panels were also were artificially inflated.”

Id. ¶ 5. In addition, the AT&T plaintiffs allege that defendants’ conspiracy raised the price of LCD

panels incorporated into products such as desktop computers and notebook computers that AT&T

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Mobility and AT&T purchased for their own internal use between 1996 and 2006. Id. ¶¶ 5-6. 

LEGAL STANDARDS

I. Federal Rule of Civil Procedure 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) allows a party to challenge a federal court’s jurisdiction

over the subject matter of the complaint. As the party invoking the jurisdiction of the federal court, the

plaintiff bears the burden of establishing that the court has the requisite subject matter jurisdiction to

grant the relief requested. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 376-78

(1994) (citation omitted). A complaint will be dismissed if, looking at the complaint as a whole, it

appears to lack federal jurisdiction either “facially” or “factually.” Thornhill Publishing Co., Inc. v.

General Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). When the complaint is challenged for

lack of subject matter jurisdiction on its face, all material allegations in the complaint will be taken as

true and construed in the light most favorable to the plaintiff. NL Indus. v. Kaplan, 792 F.2d 896, 898

(9th Cir. 1986). 

II. Federal Rule of Civil Procedure 12(b)(6)

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it

fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss,

the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard requires the plaintiff

to allege facts that add up to “more than a sheer possibility that a defendant has acted unlawfully.”

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While courts do not require “heightened fact pleading

of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.”

Twombly, 550 U.S. at 544, 555. 

In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court

must assume that the plaintiff’s allegations are true and must draw all reasonable inferences in the

plaintiff's favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the

court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions

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 The declarations are found at Docket Nos. 471, 472, 856 Ex. C, 1560 Ex. A, and 1561 Ex. A).

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of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

If the Court dismisses the complaint, it must then decide whether to grant leave to amend. The

Ninth Circuit has “repeatedly held that a district court should grant leave to amend even if no request

to amend the pleading was made, unless it determines that the pleading could not possibly be cured by

the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citations and internal

quotation marks omitted). 

DISCUSSION

Tatung Company of America (“TUS”) moves to dismiss the complaints filed by AT&T and

Motorola on three grounds. First, TUS contends that plaintiffs have failed to allege that they are direct

purchasers with respect to TUS, and thus plaintiffs are barred from asserting their Sherman Act claims

against TUS. Second, TUS contends that plaintiffs have failed to state a federal antitrust claim against

TUS under the federal pleading standard mandated by Twombly, 550 U.S. 544 (2007). Third, TUS

moves to dismiss the state law claims to the extent those claims are predicated on the federal claims, and

because plaintiffs have failed to state a claim under the various state statutes alleged in the complaints.

I. Federal claims

TUS contends that plaintiffs’ federal antitrust claims are barred under Illinois Brick Co. v.

Illinois, 431 U.S. 720 (1977). TUS argues that it is not an LCD manufacturer, that TUS is itself a direct

purchaser of finished products containing LCDs or a direct or an indirect purchaser of LCDs themselves,

and thus that TUS’s customers are indirect purchasers who may not sue for damages under Illinois

Brick. In support, TUS relies on the same declarations and evidence submitted in connection with

TUS’s motion to dismiss the direct purchaser plaintiffs’ first amended consolidated complaint in the

MDL, as well as a new declaration from TUS executive Mr. Chen.3

 TUS argues that the evidence it has

submitted shows that TUS, Chunghwa Picture Tubes, and Tatung Company of Taiwan are distinct

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corporate entities, and that there is no factual basis for Sherman Act liability against TUS. TUS’s

arguments in this regard are largely identical to the arguments previously asserted in connection with

its motion to dismiss the direct purchaser consolidated class complaint, as well as TUS’s motion for

reconsideration. The primary difference between the instant motion and those other motions is the

addition of Mr. Chen’s most recent declaration, which states that “TUS does not now nor has it ever

manufactured handsets or handheld devices containing LCD panels, including cell phones and PDAs,”

and “TUS does not now nor has it ever sold handsets or handheld devices containing LCD panels,

including cell phones and PDAs.” Feb. 19, 2010 Chen Decl. ¶¶ 2-3.

In response, plaintiffs argue that TUS and defendant Chunghwa Picture Tubes, Ltd. (“CPT”) are

considered a single entity for purposes of the antitrust laws in view of their close affiliation and alleged

common ownership. Plaintiffs rely on Royal Printing Company v. Kimberly-Clark Corp., 621 F.2d 323

(9th Cir. 1980), in which the Ninth Circuit held that “Illinois Brick does not bar an indirect purchaser’s

suit where the direct purchaser is a division or subsidiary of a co-conspirator.” Id. at 326. The court

explained that Illinois Brick’s rationale of preventing potentially duplicative recoveries from both direct

and indirect purchasers does not apply where the direct purchaser is an affiliate of the corporation

accused of an antitrust violation. Id.; see also Freeman v. San Diego Ass’n of Realtors, 322 F.3d 1133,

1145-46 (9th Cir. 2003) (applying Royal Printing and holding that “indirect purchasers can sue for

damages if there is no realistic possibility that the direct purchaser will sue its supplier over the antitrust

violation”). Plaintiffs rely on the same evidence and arguments submitted by the direct purchaser class

plaintiffs in opposition to TUS’s earlier motions raising the same contentions.

For the reasons set forth in the Court’s March 3, 2009 and March 28, 2010 orders, the Court

holds that, at this stage of the litigation, TUS has not shown that it is not a proper defendant under Royal

Printing. The Court recognizes that the factual record is disputed as to the degree of control exercised

by Chunghwa and/or Tatung Company of Taiwan over TUS, as well as the nature of the corporate

affiliation between Chunghwa and TUS. As stated in the March 28, 2010 order, the Court finds it

unnecessary to resolve these factual disputes at this time, as the record is not fully developed and there

is a sufficient basis in the record to allow the cases to proceed against TUS. TUS may renew its

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 Contrary to TUS’s assertions, plaintiffs have submitted more than marketing statements in

support of their allegations regarding the close corporate affiliation between Chunghwa and TUS, and

thus regardless of whether such statements could provide a basis for denying TUS’s jurisdictional

challenge, there is other evidence in support of plaintiffs’ allegations of control.

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arguments upon a fuller factual record in a motion for summary judgment.4

 With regard to the new

declaration by Mr. Chen, even if it is true that TUS has never manufactured or sold handsets or handset

devices, TUS could still be liable for purchases made to AT&T for products other than handsets or

handset devices, and TUS could still be liable to both sets of plaintiffs based on the complaints’

allegations that TUS joined in the LCD price-fixing cartel. See Paper Sys. Inc. v. Nippon Paper Indus.

Co., 281 F.3d 629, 632 (7th Cir. 2002) (“Nothing in Illinois Brick displaces the rule of joint and several

liability, under which each member of a conspiracy is liable for all damages caused by the conspiracy’s

entire complaint.”). 

TUS also argues that the complaints’ allegations of a conspiracy involving TUS do not meet the

pleading standard set forth by Twombly. TUS argues that “other than their conclusory and incorrect

allegations of control,” plaintiffs have failed to plausibly allege that TUS joined the alleged conspiracy

and played a role in it. The Court disagrees, and finds that the allegations are sufficient under Twombly.

The complaints allege that TUS sold and distributed LCD products manufactured by Chunghwa

throughout the United States; contains allegations about the Tatung corporate family and ownership of

Chunghwa and TUS; and alleges that subsidiaries such as TUS “played a significant role in the

conspiracy” and were “active, knowing participants in the conspiracy.” See, e.g., AT&T Amended

Compl. ¶¶ 43-45, 86-87, 118; Motorola Amended Compl. ¶¶ 10, 38-40, 116. The Court previously held

similar allegations in the direct purchaser class complaint adequately alleged TUS’s role in the alleged

conspiracy.

II. State law claims

TUS also moves to dismiss plaintiffs’ state law claims on numerous grounds. By orders filed

on June 28, 2010, the Court granted defendants’ joint motion to dismiss the state law claims.

Accordingly, the Court finds it unnecessary to address the separate arguments raised by TUS with

respect to the state law claims. If plaintiffs allege state law claims against TUS in the amended

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complaints, TUS may renew these contentions.

CONCLUSION

Accordingly, for the foregoing reasons, the Court DENIES the motions to dismiss filed by

Tatung Company of America. (Docket Nos. 1560 and 1561 in C 07-1827; Docket No. 36 in C 09-4997;

and Docket No. 27 in C 09-5840). 

IT IS SO ORDERED.

Dated: July 19, 2010 

SUSAN ILLSTON

United States District Judge

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