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An ongoing antitrust probe by the U.S. Department of Justice has sparked a wave of lawsuits against a segment of the computer memory chip industry. Cases against companies that make, or used to make, static random access memory (SRAM) chips are piling up, with at least 14 in federal courts in California and one each in Arkansas and Tennessee. SRAM is a type of memory chip used in mobile devices, game consoles and computer circuit boards. The plaintiffs are direct purchasers, or companies that bought the chips to use in other products. They are also indirect purchasers, or the consumers who bought products with SRAM chips inside. The suits allege that the companies violated Sherman Act antitrust laws by fixing, raising and stabilizing the price of SRAM, allocating markets for SRAM among themselves and submitting rigged bids for contracts. Indirect purchasers typically bring claims under state antitrust laws. “Lawyers all over the country are looking at this,” said Francis Scarpulla of San Francisco’s Zelle Hofmann Voelbel Mason & Gette, a plaintiffs’ lawyer in three California cases. “It’s easy to find a plaintiff because it’s anyone who’s got a cellphone.” Cases started mounting during the second half of October, around the time that companies like Mitsubishi Electric Corp., Samsung Electronics Co. and Sony Corp. announced Justice Department investigations. Justice Department spokeswoman Gina Talamona confirmed that the office is looking at anti-competitive practices in the SRAM industry and has already brought “some cases.” She declined further comment. Companies cooperating In written statements as early as Oct. 6 for Samsung and Oct. 16 for Mitsubishi and as late as Oct. 31 for Sony, companies acknowledged their cooperation with the Justice Department’s probe, but declined to discuss the lawsuits. Samsung spokeswoman Chris Goodhart said in a statement that the company would “cooperate fully” with the Justice Department. “Samsung is strongly committed to fair competition and ethical practices and forbids anti-competitive behavior,” Goodhart said. Sony said its U.S. subsidiary, Sony Electronics Inc., “fully intends to cooperate with what appears to be an industry-wide inquiry.” Mitsubishi, which said it exited the SRAM business almost three years ago, also said it is “cooperating with DOJ in their investigation.” Joel S. Sanders of Los Angeles-based Gibson, Dunn & Crutcher’s San Francisco office is the sole defense lawyer listed on the newly filed SRAM cases so far. Sanders, who represents Micron Technology Inc. of Boise, Idaho, in a dozen California cases, said he’s not authorized by his client to speak about the cases. Defense lawyers notified of a multidistrict litigation petition filed by several plaintiffs either declined to comment or could not be reached. Scarpulla’s lawsuit claims that the Justice Department slapped 23 companies with subpoenas in October for an investigation of alleged cartel activity from 1998 through 2005. The lawsuits contend that SRAM prices fell sharply from 1994 to 1997, but companies were reluctant to lower prices because the U.S. Court of International Trade filed a proceeding against one company for “dumping”-unloading products at unfairly low prices in another country. Scarpulla’s lawsuits also claimed that a dumping probe in the industry was “a factor that favored collusion” among other companies in the industry because they feared facing dumping allegations. Ayers v. Samsung Electronics Co. Ltd., No. 06-06770 (N.D. Calif.); Madsen v. Samsung Electronics Co., No. 06-06541 (N.D. Calif.); Reclaim Center Inc. v. Samsung Electronics Co., No. 06-06533 (N.D. Calif.). The cases name up to three dozen defendants, including such major technology players as Cypress Semiconductor Corp. and Samsung Semiconductor Inc., both of San Jose, Calif.; and Tokyo-based powerhouses Mitsubishi and Sony Corp. Echoes of ‘DRAM’ Cases against companies in the SRAM memory chip sector share many of the same players and allegations as cases against the dynamic random access memory (DRAM) market, agreed Guido Saveri of San Francisco-based Saveri & Saveri. His firm served as co-lead counsel in the DRAM litigation that led to Nov. 2 settlements of about $73 million with Hynix Semiconductor Inc. of Ichon, South Korea, $67 million with Samsung Electronics of Seoul, South Korea, and $20 million with Infineon Technologies A.G.. of Munich, Germany. Trials against the other defendants, including Hitachi Ltd. of Tokyo, Micron Technology and NEC Electronics America Inc. of Santa Clara, Calif., are slated for next April. In re Dynamic Random Access Memory (DRAM) Antitrust Litigation, No. 02-01486 (N.D. Calif.). Defense attorney Robert E. Freitas, who represented Nanya Technology Corp. in a DRAM case, said the plaintiffs have no evidence that his clients acted illegally and that he’s filed summary judgment motions. Freitas of Orrick, Herrington & Sutcliffe’s Menlo Park, Calif., office, also said that the Justice Department has not indicted Nanya Technology Corp. of Taiwan, Nanya Technology Corp. USA of San Jose or any of their employees. “The [plaintiffs' lawyers] make arguments about conversations that didn’t involve actual agreements on price,” Freitas said. “We say there’s absolutely no evidence that our clients participated in agreements on price.” The DRAM companies also fared poorly with the Justice Department, which has so far netted $731 million in fines against four companies and 16 individuals-the second-highest amount collected by the department from a criminal antitrust investigation.

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