Saturday, April 06, 2013

$571 Million Settlement Approved in TFT-LCD Indirect Purchaser Action

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

The federal district court in San Francisco has given final approval to a $571 million settlement on behalf of indirect purchasers of thin-film transistor liquid crystal display (TFT-LCD) panels (In Re: TFT-LCD (Flat Panel) Antitrust Litigation, March 29, 2013, Illston, S.)

The settlement resolves antitrust claims against TFT-LCD panel producers AU Optronics Corporation (AUO), Toshiba Corporation, and LG Display brought by a class of retail purchasers who bought products containing TFT-LCD panels and eight states.

The court also approved attorney fees, expenses, and incentive awards. Combined with an earlier settlement with other producers, which was approved in July 2012, the total payments exceed $1 billion.

The indirect purchaser plaintiffs alleged a “long-running conspiracy extending from at least January 1, 1999 through at least December 31, 2006, at a minimum, among defendants and their co-conspirators, the purpose and effect of which was to fix, raise, stabilize, and maintain prices for LCD panels sold indirectly to Plaintiffs and the members of the other indirect-purchaser classes . . . .” They sought equitable relief under federal antitrust law, as well as restitution, disgorgement, and damages under the antitrust, consumer protection, and unfair competition laws of 23 states.

The eight settling states—Arkansas, California, Florida, Michigan, Missouri, New York, West Virginia, and Wisconsin—asserted claims arising from indirect purchases made by governmental entities, and/or by consumers of TVs, notebook computers, and monitors containing LCD panels under each settling state’s parens patriae authority, proprietary claims, and enforcement authority pursuant to both federal and state law.

The settlement was found to be fair, adequate, and reasonable. The settling defendants agreed to pay a total of $571 million under the approved deal. The settling states will be paid $27.5 million in resolution of their civil penalties claims. The remaining $543.5 million represents consumer redress. The breakdown of total settlement payments by the defendants is as follows: AUO—$170 million; LG—$380 million; and Toshiba—$21 million.

In addition to the monetary relief, all three producers agreed to establish an antitrust compliance program. AUO and LG also agreed, for a period of up to five years, not to engage in price fixing, market allocation, bid rigging, or other per se antitrust violations with respect to the sale of any LCD panels sold to end-user purchasers in the United States.

Objections to settlement. The court rejected objections to the settlement raised by the States of Illinois, South Carolina, and Washington. The crux of their objections was that the indirect purchaser plaintiffs were risking the class members’ recovery by pursuing injunctive but not monetary relief. Generally, a class action suit seeking only declaratory and injunctive relief does not bar subsequent individual suits for damages, the court noted. The states were not entitled to the exclusion of their citizens from the class.

In addition, the court noted that the defendants had represented that the release of the injunctive class claims would not affect damages actions by states which were not within one of the defined indirect purchaser plaintiff damages classes, even if they were included in the nationwide injunctive relief class. This included the parens patriae claims by states that were not part of an indirect purchaser plaintiff damage class.

Attorney fees, expenses. The court approved the request of indirect purchaser plaintiff (IPP) class counsel for a fee award of $308,225,250, representing 28.6% of the settlement fund, and $8,736,131.43 in expenses. According to the court, “the ultimate result achieved by IPP counsel, a settlement of approximately $1.08 billion in cash, is exceptional.” The court found the award to be “proper and fair in light of the amount and quality of the work done by the attorneys in this case.”

An award of $11,054,191 as attorney fees for the settling states also was approved. These states were entitled to a total of $1,206,479 in expenses. The court denied fees sought by attorneys representing separate objectors or groups of objectors.

Incentive awards. Lastly, the court approved a total amount of $660,000 for incentive awards. An award of $15,000 for each of the 40 court-appointed class representatives and $7,500 for each of the eight additional named plaintiffs was deemed appropriate.

The litigation is No. M 07-1827 SI (MDL. No. 1827).

Attorneys: Joseph M. Alioto, Sr. (Alioto Law Firm) for Indirect Purchaser Plaintiffs. John C. McGuire (Sedgwick, Detert, Moran & Arnold) for AU Optronics Corp.

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