In Re Inductors Antitrust Litigation

Background

The order addresses two related actions. Flextronics International U.S.A., Inc. alleged that the defendants conspired to fix, raise, stabilize, and maintain the prices of inductors from January 1, 2003, through December 31, 2017. Flextronics alleged both an original-equipment-manufacturer-specific conspiracy and a broader market-wide conspiracy. By the time of this ruling, the TDK, Murata, and Taiyo Yuden defendants had been dismissed from Flextronics’ action, so the court addressed only the alleged market-wide conspiracy involving the Panasonic, Sagami, and Sumida defendants.

Dependable Component Supply Corporation 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 defendants filed one consolidated motion to dismiss both complaints.

Legal standards

For a motion under Federal Rule of Civil Procedure 12(b)(6), a complaint must contain enough factual matter to state a plausible claim for relief. For a Sherman Act Section 1 claim, a plaintiff must allege an agreement between at least two entities, an unreasonable restraint of trade, and an effect on interstate commerce. When a plaintiff relies on circumstantial evidence, the allegations must include facts tending to exclude the possibility that the defendants acted independently.

A plaintiff also must have standing under Article III of the Constitution. Standing requires a concrete and particularized injury, a connection between that injury and the defendant’s conduct, and a likelihood that a favorable court decision would remedy the injury. Without standing, a federal court lacks jurisdiction and must dismiss the action under Rule 12(b)(1).

Flextronics’ complaint

The court found that Flextronics had not corrected deficiencies identified in an earlier order. Its expert’s statistical analysis showed parallel pricing only among the TDK, Murata, and Taiyo Yuden defendants, not among the Panasonic, Sagami, and Sumida defendants. Flextronics’ additional price comparisons did not show pricing trends, patterns, or relationships over time.

The court also found that Flextronics had not adequately alleged how the Panasonic, Sagami, and Sumida defendants joined the conspiracy or played a role in it. Allegations that those defendants attended trade-organization meetings were insufficient because participation in such meetings, without allegations of improper information exchange or other improper conduct, did not suggest an illegal agreement. The court therefore granted the motion to dismiss Flextronics’ fourth amended complaint.

Dependable’s complaint

The court agreed that Dependable lacked standing. To connect itself to the alleged customer-specific conspiracy, Dependable needed to allege facts showing that it purchased inductors from a major customer or was a target of the alleged bid-rigging conspiracy.

The court found that Dependable did neither. It 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 targeted by them. The court concluded that Dependable’s general assertion that it would have paid lower prices absent the alleged conspiracy was speculative and did not establish concrete, particularized harm. The court therefore granted the motion to dismiss Dependable’s third amended complaint for lack of standing.

Disposition

Judge Edward Davila granted the defendants’ consolidated motion to dismiss. Because the court had already dismissed two earlier complaints and had given Flextronics and Dependable opportunities to correct the identified problems, it found that amendment would be futile. The complaints were dismissed without leave to amend, and the clerk was directed to close the files.