Plaintiff manufacturer sued defendants, a parent company and its subsidiary, alleging violations of the Sherman Act, 15 U.S.C.S. § 1; California’s Cartwright Act, Cal. Bus. & Prof. Code § 16700 et seq.; and California’s Unfair Competition Act, Cal. Bus. & Prof. Code § 17200 et seq. Defendants moved for summary judgment with regard to the antitrust claims.
Overview
The instant action was part by san diego litigation attorney general opt-out category of cases related to dynamic random access memory (DRAM) antitrust litigation. The manufacturer alleged that it paid more for DRAM than it would have in the absence of defendants’ conspiracy. Defendants allegedly did so by participating in meetings and conversations to discuss the price of DRAM; agreeing to manipulate prices and supply so as to boost sagging DRAM sales; issued price announcements and price quotations in accordance with the agreements reached by defendants; and sold DRAM to customers in the United States at non-competitive prices. The court found that the manufacturer had created a triable issue of material fact with respect to the parent company’s vicarious liability for the overarching conspiracy, on the basis of its relationship with the subsidiary. On balance, the volume of contact and communications could reasonably support the inference that the subsidiary conspired to engage in collusive activity regarding the industry-wide sale of DRAM at artificial prices. The court did not sanction the use of adverse inferences against the three employees of the subsidiary to the extent the manufacturer sought.
Outcome
The motions for summary judgment were denied.
Procedural Posture
Plaintiffs, corporations involved in the technology field, sued defendants, entities from whom the corporations purchased dynamic random access memory (DRAM), alleging violations of § 1 of the Sherman Act, California’s antitrust statute and the Cartwright Act, and Cal. Bus. & Prof. Code § 17200 et seq. Before the federal district court was defendants’ motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1), (6), and Fed. R. Civ. P. 8(a).
Overview
Most of defendants’ argument was targeted at the “foreign injury” claims that they asserted were present in the corporations’ consolidated complaint. They contended that, because the corporations’ claims were based, at least in part, on artificially high DRAM prices for DRAM that was delivered abroad for use there, the “foreign” portion of the claims was not recoverable under the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C.S. § 6a, or existing precedent. In sum, resolution of the motion required resolution of whether the corporations’ claims could and should be segregated into domestic and foreign injury components, and, if so, whether the corporations had sufficiently stated or demonstrated that the domestic injury exception to the FTAIA applied, such that jurisdiction was, after all, warranted. However, while the corporations did not dispute that some portion of their claims was based on foreign harm, it was extremely difficult for the district court to tell which allegations corresponded to that portion of the claims. Accordingly, the district court dismissed the consolidated complaint for failure to comply with Fed. R. Civ. P. 8(a) with leave to amend.
Outcome
The district court dismissed the corporations’ complaint with leave to amend.