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AT&T MOBILITY LLC v. AU OPTRONICS CORP.
AT&T MOBILITY LLC; AT&T CORP.; AT&T SERVICES, INC.; BELLSOUTH TELECOMMUNICATIONS, INC.; PACIFIC BELL TELEPHONE COMPANY; AT&T OPERATIONS, INC.; AT&T DATACOMM, INC.; SOUTHWESTERN BELL TELEPHONE COMPANY, Plaintiffs-Appellants,
v.
AU OPTRONICS CORPORATION; AU OPTRONICS CORPORATION AMERICA, INC; CHI MEI CORPORATION; CHI MEI OPTOELECTRONICS CORPORATION; CHI MEI OPTOELECTRONICS USA, INC.; CMO JAPAN CO., LTD.; NEXGEN MEDIATECH, INC.; NEXGEN MEDIATECH USA, INC.; CHUNGHWA PICTURE TUBES LTD.; TATUNG COMPANY OF AMERICA, INC.; EPSON IMAGING DEVICES CORPORATION; EPSON ELECTRONICS AMERICA, INC.; HANNSTAR DISPLAY CORPORATION; LG DISPLAY CO., LTD.; LG DISPLAY AMERICA, INC.; SAMSUNG ELECTRONICS CO., LTD.; SAMSUNG SEMICONDUCTOR, INC.; SAMSUNG ELECTRONICS AMERICA, INC.; SHARP CORPORATION; SHARP ELECTRONICS CORPORATION; TOSHIBA CORPORATION; TOSHIBA AMERICA ELECTRONICS COMPONENTS, INC.; TOSHIBA MOBILE DISPLAY TECHNOLOGY CO., LTD.; TOSHIBA AMERICA INFORMATION SYSTEMS, INC., Defendants-Appellees.
No. 11-16188.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted November 9, 2012—San Francisco, California.
Filed February 14, 2013.
Ethan P. Schulman (argued), Crowell & Moring LLP, San Francisco, California, for Plaintiffs-Appellants.
Richard S. Taffet (argued), Bingham McCutchen LLP, New York, New York, for Defendants-Appellees.
Before: Ronald M. Gould and Milan D. Smith, Jr., Circuit Judges, and Kevin T. Duffy, District Judge.*
Opinion by Judge Milan D. Smith, Jr.
OPINIONM. SMITH, Circuit Judge. The district court has certified to us pursuant to 28 U.S.C. § 1292(b) "the question whether the application of California antitrust law to claims against defendants based on purchases that occurred outside California would violate the Due Process Clause of the United States Constitution." Because the underlying conduct in this case involves not just the indirect purchase of price-fixed goods, but also the conspiratorial conduct that led to the sale of those goods, we answer in the negative. To the extent a defendant's conspiratorial conduct is sufficiently connected to California, and is not "slight and casual," the application of California law to that conduct is "neither arbitrary nor fundamentally unfair," and the application of California law does not violate that defendant's rights under the Due Process Clause. See Allstate Ins. Co. v. Hague, 449 U.S. 302, 312-13 (1981). We therefore reverse the district court's order dismissing Plaintiffs' California law claims,1 and remand for further proceedings consistent with this opinion. BACKGROUND AND PROCEDURAL HISTORYPlaintiffs-Appellants AT&T Mobility LLC, AT&T Corporation, AT&T Services, Inc., BellSouth Telecommunications, Inc., Pacific Bell Telephone Company, AT&T Operations, Inc., AT&T Datacomm, Inc., and Southwestern Bell Telephone Company (collectively, Plaintiffs) are entities that provide voice and data communication services, and also sell mobile wireless handsets. Collectively, they do business in many parts of the world, including in California, though only one of them alleges that its principal place of business is located in California. Defendants-Appellees AU Optronics Corporation of America, Inc., Chi Mei Corporation, Chi Mei Optoelectronics Corporation, Chi Mei Optoelectronics USA, Inc., CMO Japan Co., Ltd., Nexgen Mediatech, Inc., Nexgen Mediatech USA, Inc., Chunghwa Picture Tubes Ltd., Tatung Company of America, Inc., Epson Imaging Devices Corporation, Epson Electronics America, Inc., and Hannstar Display Corporation (collectively, Defendants)2 are manufacturers and distributors of liquid crystal display (LCD) panels, whose respective headquarters and principal places of business are located in Asia and the United States, including California. Plaintiffs allege that between 1996 and 2006, they purchased billions of dollars worth of mobile handsets containing Defendants' LCD panels. They further allege that the prices they paid for those handsets were artificially inflated because Defendants had orchestrated a global conspiracy to fix the prices of LCD panels. Plaintiffs sued Defendants in the United States District Court for the Northern District of California under the Clayton Act,3 the Sherman Act,4 California's Cartwright Act,5 California's UCL, and, in the alternative, the laws of a number of other states, seeking to recover damages caused by their direct and indirect purchases of LCD panels from Defendants. The Cartwright Act provides a private cause of action for indirect purchasers of price-fixed goods, whereas the antitrust laws of some other states do not. See Clayworth v. Pfizer, Inc., 233 P.3d 1066, 1082-83 (Cal. 2010) (discussing the effect of Ill. Brick Co. v. Illinois, 431 U.S. 720 (1977), and California's legislative response). None of Plaintiffs' purchases at issue in this case was made in California.
* The Honorable Kevin Thomas Duffy, District Judge for the U.S. District Court for the Southern District of New York, sitting by designation.
1. We focus on Plaintiffs' claims under the California Cartwright Act, Cal. Bus. & Prof. Code §§ 16700-16770 (Cartwright Act or Act), but the principles articulated herein apply equally to Plaintiffs' claims under California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. (UCL). The UCL provides a cause of action for harms caused by "any unlawful, unfair or fraudulent business act or practice." Id. It thereby "`borrows' violations from other laws by making them independently actionable as unfair competitive practices." Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937, 943 (Cal. 2003). Because a violation of the Cartwright Act is, by definition, actionable under the UCL, we do not belabor our analysis in this case with respect to Plaintiffs' UCL claims.
2. Since oral argument in this case, the parties have stipulated to the dismissal of this appeal with respect to a number of the Defendants. Defendants Chunghwa Picture Tubes Ltd., Tatung Company of America, Inc., and Hannstar Display Corp. remain as Appellees.
3. 15 U.S.C. §§ 12-27; 29 U.S.C. §§ 52-53.
4. 15 U.S.C. §§ 1-7.
5. Cal. Bus. & Prof. Code §§ 16700-16770.
6. See, e.g., Sherman Antitrust Act, 15 U.S.C. §§ 1-7; Clayton Antitrust Act, 15 U.S.C. §§ 12-27, 29 U.S.C. §§ 52-53.
7. "Today, every state (and the District of Columbia) has some kind of antitrust law . . . ." Stephen Calkins, Perspectives on State and Federal Antitrust Enforcement, 53 Duke L.J. 673, 678 (2003).
8. The question of whether the Cartwright Act provides a cause of action based exclusively on out-of-state purchases is distinct from the inquiry of whether such an application would violate the Due Process Clause, and is not at issue in this case.
9. Though Allstate was a plurality opinion joined by four of the eight justices who heard the case, "[t]he dissenting Justices were in substantial agreement with this principle," and the Court later ratified it as controlling precedent. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 818-19, 821-22 (1985).
10. See, e.g., Lea Brilmayer & Charles Norchi, Federal Extraterritoriality and Fifth Amendment Due Process, 105 Harv. L. Rev. 1217, 1240 (1992) ("Hague signalled judicial willingness to allow states extreme latitude in applying their own laws."); Russell J. Weintraub, Who's Afraid of Constitutional Limitations on Choice of Law?, 10 Hofstra L. Rev. 17, 17 (1981) ("Allstate Insurance Co. v. Hague confirms the view that the due process and full faith and credit clauses impose few limitations on choice of law . . . ." (footnotes omitted)).
11. See Restatement (Second) of Conflict of Laws § 145 (1971) (when determining what state has the most significant relationship to the occurrence and the parties, contacts to consider include: the place where the injury occurred; the place where the conduct causing the injury occurred; the domicile, residence, nationality, place of incorporation and place of business of the parties; and the place where the relationship, if any, between the parties is centered).
12. "In this complex and murky area, it is indeed easy to lose one's bearings and to slip from a focus on the constitutional limitations on choice of law to the choice of law rules themselves." Soo Line R.R. v. Overton, 992 F.2d 640, 649 (7th Cir. 1993) (Ripple, J., dissenting).
13. "Questions of legislative jurisdiction have not often played a significant role in state antitrust adjudication . . . . Where the issue has arisen, the courts have dealt with it as a question of state power under the commerce clause." Herbert Hovenkamp, State Antitrust in the Federal Scheme, 58 Ind. L.J. 375, 392 (1983).
14. Allstate, 449 U.S. at 333 (Powell, J., dissenting).
15. As the district court has already noted, the requirements of the Due Process Clause must be satisfied individually with respect to each defendant in a case. Cf. Shutts, 472 U.S. at 821-22 (contacts must be related to each member of the plaintiff class).
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