Spectrum Scientifics, LLC v. Celestron Acquisition, LLC
- Edward Davila
- 5:20-cv-03642
- U.S. District Court · Northern District of California
- 28
In Spectrum Scientifics v. Celestron, Judge Davila partly granted dismissal and striking motions, preserving post-2013 antitrust claims while allowing amendment.
The order affected Spectrum Scientifics, LLC and Radio City, Inc., the proposed class of direct purchasers, and the defendants sued over the alleged telescope-market conspiracy. Claims based on conduct from 2013 onward continued against some defendants, while claims against specified defendants and claims based on conduct before 2013 were dismissed, subject to amendment.
What happened
In Spectrum Scientifics, LLC v. Celestron Acquisition, LLC, telescope retailers alleged that the defendants conspired to fix prices, divide markets, and monopolize telescope manufacturing and distribution. They sued under federal and California antitrust laws and sought to represent a class of direct purchasers.
The court dismissed claims based on conduct before 2013 and dismissed the claims against several defendants, including SW, Jack Chen, Pacific Telescope, Nantong Schmidt, Olivon Manufacturing, Olivon USA, Suzhou Synta, Jean Shen, and Synta Canada. The court otherwise denied the dismissal motions, allowed claims based on conduct from 2013 onward to continue, denied as moot the request to strike the proposed 2005–2012 class period, and struck one allegation about a prior jury verdict. Plaintiffs were allowed to amend their complaint.
Judge Edward J. Davila issued the order on June 2, 2021. He granted the motions to dismiss in part and denied them in part, and granted in part and denied in part the motion to strike.
The detailed version
- Spectrum Scientifics, LLC v. Celestron Acquisition, LLC · No. 5:20-cv-03642
- Edward Davila
- June 2, 2021
Background
Spectrum Scientifics, LLC and Radio City, Inc. brought a proposed class action for direct purchasers against 18 defendants. The complaint alleged a conspiracy involving Synta, Celestron, Ningbo Sunny, and related entities and individuals to fix prices, allocate products and markets, share information, and monopolize two telescope markets. The alleged conduct included assistance with Ningbo Sunny’s 2013 acquisition of Meade and coordination among telescope manufacturers and distributors.
The second amended complaint asserted claims under Section 1 and Section 2 of the Sherman Act, Section 7 of the Clayton Act, California’s Cartwright Act, and California’s unfair-competition law. Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not plead enough facts to state a legally plausible claim. Defendants also moved to strike allegations concerning the proposed class period and a prior case called the Orion Action.
Motions to Dismiss
The court held that the alleged continuing sales of price-fixed products could plausibly restart the limitations period for injuries caused by sales during the four years before the lawsuit. The court also found that the complaint plausibly alleged fraudulent concealment for alleged misconduct occurring in 2013 or later. It found that alleged misrepresentations to the Federal Trade Commission, the use of “shadow books” to record Celestron’s ownership interest in Meade, and allegedly structured payments to avoid scrutiny went beyond passive concealment. The court did not find sufficient allegations supporting tolling for conduct before 2013.
The court found the allegations sufficient to support claims against David Anderson, Joseph Lupica, and Corey Lee because the complaint alleged their participation in the alleged conspiracy. It also found the allegations sufficient as to Sylvia Shen. The court found the allegations insufficient as to SW, Jack Chen, Pacific Telescope, Nantong Schmidt, Olivon Manufacturing, Olivon USA, Suzhou Synta, Jean Shen, and Synta Canada, because the complaint generally alleged participation without enough specific facts showing each party’s role. The motions to dismiss were granted as to those defendants.
For the Sherman Act Section 1 claim, the court found that the alleged agreements to divide products and markets and avoid competition were sufficient to state a claim, but granted dismissal to the extent the claim relied on conduct before 2013. The court found that the Section 2 monopolization claim was adequately stated for the period beginning in 2013, but not for earlier conduct. It likewise found the Clayton Act Section 7 claim adequately stated for the 2013 Meade transaction and later conduct, while granting dismissal as to conduct before 2013. Because the federal antitrust claims were adequately stated in those respects, the court also allowed the related Cartwright Act and unfair-competition claims to proceed to the same extent.
Motion to Strike and Amendment
The court denied as moot, without prejudice to renewal, the request to strike allegations asserting a class period beginning in 2005. This ruling followed the court’s conclusion that no actionable conduct before 2013 had been adequately alleged, while recognizing that plaintiffs could amend the complaint.
The court granted in part and denied in part the motion to strike allegations about the Orion Action. It struck the cited portion of Paragraph 2 because it improperly suggested that the defendants in this case had already been found liable for the same conduct. The court did not strike the other identified Orion-related allegations, which it viewed as background and context.
The court granted plaintiffs leave to amend to allege facts supporting claims based on the period from 2005 through 2012 and facts supporting liability against the defendants whose claims were dismissed. The court ordered that any amended complaint be filed within 14 days of the order.
Disposition
Judge Edward J. Davila granted in part and denied in part the motions to dismiss. The court granted in part the motions to dismiss the Sherman Act, Clayton Act, and state-law claims to the extent they were based on conduct before 2013, and denied the remainder of the motions to dismiss. The court denied as moot the motion to strike the proposed class-period allegations, without prejudice to renewal, and granted in part and denied in part the motion to strike the Orion Action allegations.
Read the full 28-page opinion on CourtListener, the free public archive maintained by the Free Law Project.