Settlement Preliminarily Approved in Cathode Ray Tube Price Fixing Class Action

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The federal district court in San Francisco has given preliminary approval to a $10 million settlement resolving price fixing claims brought on behalf of indirect purchasers of products contain cathode ray tubes (CRTs) against manufacturer Chunghwa Picture Tubes, Ltd.

A special master will hold a hearing to determine the sufficiency, fairness, reasonableness, and adequacy of the proposed settlement in March 2012.

Indirect Purchaser Claims

The indirect purchaser claims were brought on behalf of all persons or entities who or which indirectly purchased in the United States CRT products manufacture red or sold by defending CRT makers or their subsidiaries between March 1995 and November 2007. The net settlement fund will be no less than $5 million. The settlement calls for $2.5 million in attorneys’ fees and sets aside $2.5 million for costs, including costs of notice and administration of the settlement funds.

Last year, the court refused to dismiss the indirect purchasers’ claims based on an alleged failure to adequately plead a conspiracy, the Foreign Trade Antitrust Improvements Act (FTAIA), or an alleged lack of standing.

The complaint met the pleading standards articulated by the U.S. Supreme Court in Bell Atlantic Corp. v. Twombly (550 U.S. 544, 2007-1 Trade Cases ¶75,709) and Ashcroft v. Iqbal (129 S. Ct. 1937, 2009-2 Trade Cases ¶76,785).

The plaintiffs were not required to plead detailed, defendant-by-defendant allegations. It was sufficient that they made allegations that plausibly suggested that each defendant participated in the alleged conspiracy. The complaints contained allegations concerning certain defendants’ participation in alleged unlawful meetings and agreements.

Regarding the FTAIA argument, the indirect purchasers alleged a conspiracy that was carried out both in the United States and abroad, that involved a substantial amount of import and domestic commerce, and that targeted and injured American consumers.

Illinois Brick Repealer Statutes

The court also ruled that the indirect purchasers adequately alleged standing to assert state antitrust violations predicated on the Illinois Brick repealer statutes of Arizona, California, Iowa, Kansas, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, South Dakota, Tennessee, Vermont, West Virginia, and Wisconsin.

The indirect purchasers alleged that they paid higher prices for CRT products than they would have paid in the absence of the conspiracy and that prices of CRT products were directly correlated to the prices of CRTs.

CRTs purportedly account for approximately 60 percent of the cost of manufacturing computer monitors and a slightly smaller percentage of the cost of manufacturing televisions.

The decisions are Cathode Ray Tube (CRT) Antitrust Litigation, 2011-2 Trade Cases ¶77,592 and 2011-2 Trade Cases ¶77,593.