Appeals Court Revives More Price-Fixing Claims Over Memory Cards

Appeals Court Revives More Price-Fixing Claims Over Memory Cards Jason Doiy / The Recorder U.S. Court of Appeals for the Ninth Circuit

SAN FRANCISCO — Consumers can join Samsung Electronics Co. in pursuing price-fixing allegations against three other manufacturers of flash memory cards.

The U.S. Court of Appeals for the Ninth Circuit ruled Wednesday that U.S. District Judge Jeffrey White of the Northern District of California had erred when he ruled that purchasers of SD memory cards waited too long to bring antitrust claims against Panasonic Corp., Toshiba Corp. and SanDisk Corp. and their joint licensing ventures, SD Group and SD-3C.

Because the purchasers were seeking only an injunction against alleged anticompetitive behavior, the four-year statute of limitations set out in the Clayton Act did not apply, Judge Ronald Gould wrote for the Ninth Circuit.

The same panel revived Samsung’s claims against the same defendants last month, although for slightly different reasons.

Oliver v. SD-3C centers on memory cards that are used in cellphones and other electronics. Panasonic, Toshiba and SanDisk claim the essential patents to the technology and have widely licensed it since 2003. In 2006, the manufacturers established a new license agreement that maintained their 6 percent royalty while authorizing licensees to determine a “fair market price” for calculating royalties. The plaintiff-consumers allege the provision shows the defendants intended to fix the price for SD cards in violation of federal and state antitrust laws.

Before the Ninth Circuit in December, Davis Polk & Wardwell partner Christopher Hockett said the licensing agreement specifies that licensees can charge any price they want, and doesn’t place any restrictions on the licensors targeted by the suit.

But Gould wrote Wednesday that at this stage of the litigation, the court had to accept the plaintiffs’ claims as alleged. And because the plaintiffs are focusing exclusively on injunctive relief, only the equitable doctrine of laches could render their claims untimely, he wrote. The purchases of SD cards continued until recently, so laches would not apply, he concluded.

Gould was joined by Judge Richard Paez and U.S. District Judge David Ezra of Texas, sitting by designation. They also revived the plaintiffs’ state law claims, instructing White to evaluate them under a California Supreme Court decision issued last year, after White had ruled in the cases.

Susman Godfrey associate Amanda Bonn argued the case for the plaintiffs.

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