Flextronics International USA, Inc. v. Murata Manufacturing Co., Ltd.

Background

The order addressed a consolidated motion to dismiss complaints in two related cases: Flextronics International USA, Inc.’s fourth amended complaint and Dependable Component Supply Corporation’s third amended complaint. Flextronics alleged that the defendants conspired to fix, raise, stabilize, and maintain the prices of inductors from January 1, 2003, through December 31, 2017. It alleged both an original-equipment-manufacturer-specific conspiracy and a broader, market-wide conspiracy.

At the time of this order, the court said that the TDK, Murata, and Taiyo Yuden defendants had already been dismissed from the Flextronics action. The court therefore addressed Flextronics’s allegations that the Panasonic, Sagami, and Sumida defendants participated in the broader market-wide conspiracy.

Dependable alleged that the TDK, Murata, and Taiyo Yuden defendants conspired to fix prices, allocate markets, and rig bids for inductors sold to Dependable and putative class members. Dependable alleged that the conspiracy targeted thirteen major customers. The opinion also states that Dependable’s amended complaint did not name the Sagami, Sumida, Panasonic, and Tokin defendants, so those defendants were dismissed from the Dependable action.

Legal Standard

The court applied Federal Rule of Civil Procedure 12(b)(6), which requires dismissal when a complaint does not state a legally sufficient claim. For a Sherman Act Section 1 antitrust claim, a plaintiff must plausibly allege an agreement among two or more entities, an unreasonable restraint of trade, and an effect on interstate commerce. Because Flextronics relied mainly on circumstantial evidence, it had to allege facts tending to rule out the possibility that the defendants acted independently.

The court also considered whether Dependable had Article III standing, meaning a concrete injury fairly traceable to the defendants’ conduct and likely to be remedied by a favorable court decision. A plaintiff that cannot allege standing does not establish federal-court jurisdiction, and the claim must be dismissed under Rule 12(b)(1).

Flextronics’s Complaint

The court held that Flextronics had not corrected deficiencies identified in an earlier order. First, Flextronics did not adequately plead parallel pricing among the Panasonic, Sagami, and Sumida defendants and the named co-conspirators. Flextronics’s expert found statistical evidence of parallel pricing only among the TDK, Murata, and Taiyo Yuden defendants. The court found that Flextronics’s other price comparisons did not show pricing trends, patterns, or relationships over time.

Second, the court held that Flextronics did not adequately allege how the Panasonic, Sagami, and Sumida defendants joined the conspiracy or played a role in it. Their alleged participation in JEITA meetings was not enough because, as the court explained, simply attending trade-organization meetings where information is exchanged and strategies are discussed does not itself suggest an illegal agreement. The court found no new allegations showing that those defendants exchanged improper information or otherwise behaved improperly.

The court therefore granted defendants’ motion to dismiss Flextronics’s fourth amended complaint.

Dependable’s Complaint

The court agreed that Dependable lacked standing. Dependable needed to connect itself to the alleged original-equipment-manufacturer conspiracy by showing either that it purchased inductors from a major customer or that it was a target of the alleged bid-rigging conspiracy.

The court found that Dependable did neither. Dependable did not identify the type or quantity of inductors it purchased, the prices it paid, or how those prices changed over time. It also did not allege that it purchased parts affected by the alleged agreements or that it was a target of the agreements. The court found that Dependable’s allegation that it paid more because prices increased was speculative and did not establish a concrete, particularized injury to Dependable.

The court therefore granted the TDK, Murata, and Taiyo Yuden defendants’ motion to dismiss Dependable’s third amended complaint for lack of standing.

Disposition

The court granted defendants’ consolidated motion to dismiss. It stated that it had previously dismissed two other complaints and had given Flextronics and Dependable sufficient opportunities to correct the identified deficiencies. Finding that amendment would be futile, the court dismissed the claims without leave to amend and directed the Clerk to close the files. Judge Edward Davila signed the order on February 3, 2022.