Companies Must Face State Antitrust Claims

Judge Sidney Thomas

A federal appeals court refused to curtail the power of state attorneys general to sue companies on behalf of the public for alleged antitrust violations without invoking class action lawsuit limitations.

The 9th U.S. Circuit Court of Appeals rejected efforts by a host of technology firms to force state antitrust actions to be declared federal class actions under restrictions imposed by the federal Class Action Fairness Act.

The two states sued Hitachi, Samsung, Sharp Corp., Toshiba Corp., Epson Imaging Devices Corp. and a host of other firms alleging the companies  engaged in a conspiracy to fix the prices of liquid crystal display panels, used in TVs, cell phones and other similar devices.  The suit alleged conspiracy lasted from 1998 to 2006. 

The state’s sought to recover damages for residents who were allegedly overcharged and enjoin the companies from any further violations.

The companies responded by transferring the case from state courts to the federal courts arguing it came under CAFA jurisdiction as a class action.

U.S. District Judge Susan Illston in San Francisco rejected that claim and sent the cases back to state court, but the companies appealed to the 9th Circuit.

Unlike private litigants, the attorneys general have statutory authority to sue on behalf of state citizens and do not need to demonstrate they had injuries similar to the public or obtain a certification as a class in order to recover damages, wrote Judge Sidney Thomas for the 9th Circuit.

While the state may be representing the public in its action, that does not render it a class action, Thomas reasoned.

Thomas agreed with Illston’s order that the case must go back to state court to be resolved as an antitrust case brought under state law.

Case:  Washington State v. Chimei Innolux Corp.   No. 11-16862

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