IN RE CAPACITORS ANTITRUST LITIGATION

Background

This multidistrict antitrust litigation concerns allegations that defendant corporations participated in a long-running global conspiracy to fix capacitor prices. The indirect purchaser plaintiffs bought capacitors from direct purchasers, such as distributors, rather than directly from manufacturers. Their claims therefore required proof that direct purchasers paid artificially inflated prices.

By the time of this order, the indirect purchaser plaintiffs had settled with all defendants they sued except Shinyei Technology Co., Ltd., Shinyei Capacitor Co., Ltd., and Taitsu Corporation. The plaintiffs sought certification of three types of classes for claims involving film capacitors: a nationwide class seeking injunctive relief under Section 1 of the Sherman Act and Federal Rule of Civil Procedure 23(b)(2); a damages class under California law covering indirect purchasers in 31 states under Rule 23(b)(3); and, alternatively, six separate state classes for California, Florida, Michigan, Minnesota, Nebraska, and New York.

Legal standards

To obtain class certification, plaintiffs must provide evidentiary support showing that the requirements of Rule 23(a)—numerosity, commonality, typicality, and adequate representation—are met, along with at least one requirement of Rule 23(b). Under Rule 23(b)(3), common questions must predominate over individual questions, and a class action must be superior to other methods of resolving the dispute. The court must conduct a rigorous analysis, but class certification is not a decision on whether plaintiffs will ultimately win their claims.

Proposed 31-state class under California law

The court denied the request to certify a single damages class under California law for indirect purchasers in 31 states. The operative complaint had defined state damages classes as residents of specified states and had asserted each state-law claim for the corresponding state class. The complaint had not identified purchasers from many of the 31 states as plaintiffs or class members, and the plaintiffs had not amended the complaint to provide a foundation for the broader request.

The court also identified constitutional, choice-of-law, and territorial-reach problems. It was not clear that the plaintiffs had shown sufficient connections between the alleged conduct of Shinyei and Taitsu and California to support applying California law under the Due Process Clause. The court noted that the plaintiffs’ supporting evidence primarily concerned the separate electrolytic-capacitor conspiracy rather than the film-capacitor conspiracy involving the remaining defendants. The California subsidiaries identified by the plaintiffs were not named as defendants.

Even assuming that the constitutional requirement could be satisfied, the court found that California’s choice-of-law rules prevented certification. The potentially applicable state laws differed in matters including standing requirements, statutes of limitations, and whether indirect purchasers had to prove that part of the alleged overcharge was passed on to them. The court concluded that these differences were material and that each state had an interest in applying its own law to transactions and purchases within its borders. The court also found that the plaintiffs had not provided a substantive reason supporting application of California’s antitrust and unfair-competition laws to out-of-state purchases.

Because variations in state law would defeat predominance under Rule 23(b)(3), the court denied certification of the proposed 31-state class under California law.

Six proposed state classes

The court also denied certification of the six separate state classes. The plaintiffs had offered little argument supporting this alternative. Their motion discussed the elements of the Sherman Act claim but did not substantively address the state laws governing the proposed classes. The court concluded that this limited record did not allow it to determine whether the proposed classes could be certified or proceed to trial.

Rule 23(a) requirements

Because the proposed classes could not satisfy Rule 23(b)(3), the court found that a detailed review of Rule 23(a) was unnecessary. It nevertheless noted that the plaintiffs also appeared to fall short under Rule 23(a), including because they had not made a factual showing concerning the number of members in the six proposed state classes. The court also questioned commonality for reasons related to the failure to satisfy Rule 23(b)(3).

Proposed injunction class and disposition

The court denied the proposed Rule 23(b)(2) injunction class. The plaintiffs had provided little support for it and had effectively abandoned the request in their briefs and arguments. They did not explain why an injunction class was appropriate when their primary requested relief was monetary damages.

Judge Donato concluded: “Class certification is denied in all respects.” The court did not reach the defendants’ motion to exclude the plaintiffs’ expert, Dr. Russell L. Lamb, and terminated that motion as moot. The court set a status conference and directed the plaintiffs, Shinyei, and Taitsu to file a status update with a jointly proposed schedule for pretrial filings and trial.