Case 3:14-cv-03264-JD Document 2193 Filed 09/20/18 Page 1 of 12
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`IN RE CAPACITORS ANTITRUST
`LITIGATION (NO. III)
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`Case No. 17-md-02801-JD
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`SECOND ORDER RE FTAIA
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`Re: Dkt. Nos. 1372, 1661
`(Case No. 14-cv-03264-JD)
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`This order supplements the Court’s initial order on the Foreign Trade Antitrust
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`Improvements Act, 15 U.S.C. § 6a (“FTAIA”). Dkt. No. 1302 in Case No. 14-cv-03264-JD; see
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`In re Capacitors Antitrust Litigation, No. 14-cv-03264-JD, 2016 WL 5724960 (N.D. Cal. Sept. 30,
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`2016). It answers an additional question about the territorial reach of the state law claims alleged
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`by the indirect purchaser plaintiffs, and applies the Court’s FTAIA rulings to several categories of
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`transactions involving Flextronics International USA, Inc. (“Flextronics”), and its overseas
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`affiliates. The Flextronics’ portion is a “Phase II” summary judgment motion under the
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`framework set out in the initial order.
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`Since the filing of the initial order, the underlying individual actions have been collected
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`into a multidistrict litigation (“MDL”) case designated as Case No. 17-md-2801. This order has
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`been filed in the MDL action and applies to all of the constituent cases. Unless otherwise noted,
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`all docket number references in the order are to the consolidated civil action, Case No. 14-cv-
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`3264, which is now a part of the MDL.
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`BACKGROUND
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`Familiarity with the basic facts summarized in the prior order is assumed. Plaintiffs are
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`direct purchaser plaintiffs (“DPPs”), indirect purchaser plaintiffs (“IPPs”), and a number of
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`Northern District of California
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`United States District Court
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`entities that opted out of the putative classes and are proceeding on an individual basis, most
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`notably Flextronics for this order.
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`The relevant product is the capacitor, a tiny but ubiquitous component of electrical devices
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`that stores and evens out the flow of electrical energy. The complaints allege that defendants
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`engaged in a multi-year international conspiracy to fix prices and suppress competition in the
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`markets for electrolytic and film capacitors. The defendants are for the most part overseas
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`capacitors manufacturers operating in Japan and other parts of East Asia.
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`In light of the complexities that frequently arise when the FTAIA is in play, the Court
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`implemented a two-phase motions track early in the litigation. Phase I, which culminated in the
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`initial FTAIA order, resolved an initial round of disputes about the application of the FTAIA to
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`the DPPs’, IPPs’ and Flextronics’ allegations. 2016 WL 5724960. A Phase II was planned to
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`apply these legal determinations to the actual transactions in the record on summary judgment.
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`DPPs and defendants have jointly declined a Phase II on the DPP class action side. Dkt. No.
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`1421. The sole Phase II motion on deck is directed to Flextronics’ transactions.
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`Independent of the Phase II proceedings, the Court concluded that additional briefing was
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`needed on the application of the FTAIA to the IPPs’ state law claims. The Court determined that
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`no state law could reach farther abroad than the FTAIA, but the question of whether a state law
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`was more circumscribed was not briefed or argued. At the Court’s invitation, IPPs and defendants
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`filed additional briefs, which are resolved here.
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`DISCUSSION
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`The FTAIA bars liability under the Sherman Act for export activity and commercial
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`conduct abroad unless those activities “adversely affect domestic commerce, imports to the United
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`States, or exporting activities of one engaged in such activities within the United States.”
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`F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 161 (2004). As discussed in the
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`initial order, the FTAIA “boils down to two principles.” 2016 WL 5724960, at *3 (quoting United
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`States v. Hsiung, 778 F.3d 738, 751 (9th Cir. 2015)). “Import trade or import commerce” with
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`foreign nations falls squarely within the scope of the Sherman Act. Id. “Nonimport trade or
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`commerce with foreign nations,” on the other hand, is not governed by the Sherman Act unless it
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`meets the “domestic effects exception.” Id. (quoting Hsiung, 778 F.3d at 756). To meet the
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`exception, (1) the conduct must have had a “direct, substantial and reasonably foreseeable effect”
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`on U.S. domestic commerce, and (2) such U.S. domestic effect must “give[] rise to” a Sherman
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`Act claim. Id. (citing 15 U.S.C. § 6a and In re Dynamic Random Access Memory (DRAM)
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`Antitrust Litigation, 546 F.3d 981, 985-86 (9th Cir. 2008)).
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`I.
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`THE FTAIA ISSUES FOR IPPS
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`A.
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`REACH OF STATE LAWS VIS-À-VIS THE FTAIA
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`On the IPP side, the “fundamental dispute” in the initial motion was whether the FTAIA
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`governed their state antitrust and consumer protection claims in the same way it applies to claims
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`under the Sherman Act. 2016 WL 5724960, at *7. The Court answered in the affirmative, and
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`declined to extend the reach of any state law beyond that of the FTAIA. Id., at *8. That
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`conclusion did not address the possibility that a state law might apply less broadly than the
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`FTAIA. The Court called for further briefing by the parties on a state-by-state basis, which has
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`been filed. Dkt. Nos. 1372, 1407, 1411. Although the IPPs have asserted claims under the laws of
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`a number of states, defendants have pursued the issue only under New York’s Donnelly Act and
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`consumer protection statute, and Florida’s consumer protection statute.
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`1.
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`New York: The Donnelly Act and Consumer Protection Statute
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`Defendants rely heavily on Global Reinsurance Corporation - U.S. Branch v. Equitas Ltd.,
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`18 N.Y.3d 722 (N.Y. 2012), to argue that New York’s antitrust statute, the Donnelly Act, has
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`tighter coverage than the FTAIA. In defendants’ view, the Donnelly Act applies only when there
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`is a “very close nexus between the conspiracy and injury to competition in” the state of New York.
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`Dkt. No. 1372 at 4 (quoting Global Reinsurance, 18 N.Y.S.3d at 736). They say that the required
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`nexus has not been alleged here. The IPPs read the Donnelly Act to reach any foreign conduct
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`that causes antitrust injury to New York purchasers and harm to competition in New York, which
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`they say they have adequately alleged.
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`Defendants rightly identify Global Reinsurance as the most relevant case, so far as it goes.
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`In the opinion, New York’s highest state court declined to simply assume that “the extraterritorial
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`reach of the Donnelly Act is as extensive as that of its federal counterpart, the Sherman Act.” 18
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`N.Y.3d at 734; see also 2016 WL 5724960, at *8 (citing same). Instead, it held that “[f]or a
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`Donnelly Act claim to reach a purely extraterritorial conspiracy, there would, we think, have to be
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`a very close nexus between the conspiracy and injury to competition in this state.” 18 N.Y.3d at
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`736. The court found that this “additional element” was not discernible in the plaintiff’s claims.
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`Id. It stopped short, however, of providing any guidance on what an actionable nexus might look
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`like, or how a plaintiff could adequately allege it. As defendants acknowledge, no other case has
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`developed the nexus point in any substance or detail. Dkt. No. 1372 at 4.
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`Even so, a comparison of the IPPs’ complaint to the one found lacking in Global
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`Reinsurance sheds considerable light on the sufficiency of the IPPs’ allegations. The plaintiff in
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`Global Reinsurance was the “New York branch of a German reinsurance corporation.” 18 N.Y.3d
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`at 726. The gravamen of the complaint was that the “German reinsurer through its New York
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`branch purchased retrocessional [insurance] coverage in a London marketplace and consequently
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`sustained economic injury when retrocessional claims management services were by agreement
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`within that London marketplace consolidated so as to eliminate competition over their delivery.”
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`Id. at 734 (emphases added). The Global Reinsurance court characterized plaintiff’s allegations as
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`expressing “localized individual harm” in London, and noted that plaintiff pleaded at most that it
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`may have been “injured by an anticompetitive restraint in the Lloyd’s [of London] market.” Id. at
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`733. By contrast, one of the named IPPs here is a New York company with its principal place of
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`business in New York, which “purchased electrolytic and film capacitors as stand-alone products
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`in New York from one or more distributors that purchased such capacitors as stand-alone products
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`from one or more defendants during the respective Class Periods.” Dkt. No. 1589 ¶ 34.
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`Whatever the final meaning of a close nexus might be under the Donnelly Act, it is clear
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`that IPPs have alleged more ties to New York than did the plaintiffs in Global Reinsurance. That
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`is enough to preserve the IPPs’ New York claim at this stage of the case. Whether the evidence
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`ultimately establishes a close nexus as a matter of fact is a debate reserved for summary judgment
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`or trial.
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`For similar reasons, defendants’ arguments under New York’s consumer protection statute
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`are also declined. Citing Goshen v. Mutual Life Insurance Company of New York, 98 N.Y.2d 314,
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`Case 3:14-cv-03264-JD Document 2193 Filed 09/20/18 Page 5 of 12
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`325 (N.Y. 2002), defendants argue in effect that the deceptive conduct must have occurred in New
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`York, which in this case would mean that a price-fixing agreement was made within the state.
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`Dkt. No. 1372 at 5-6. IPPs contend that they need allege only that purchasers were deceived
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`within the state, meaning that a purchaser need only buy a price-fixed product there. Dkt.
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`No. 1407 at 10. The IPPs have the better position. See Goshen, 98 N.Y.2d at 324-26 (concluding
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`that “the transaction in which the consumer is deceived must occur in New York”; dismissing
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`complaint of out-of-state plaintiffs but finding sufficient the allegations of the New York
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`plaintiffs); People ex rel. Spitzer v. Direct Revenue, LLC, 19 Misc.3d 1124(A), at *6-7 (N.Y. Sup.
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`Ct. 2008) (“the alleged statutory violations are barred for transactions occurring outside of New
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`York,” and “at least some part of the underlying unlawful transaction affecting [consumers] must
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`be completed in this state”). IPPs have alleged that the relevant transaction of purchasing a price-
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`fixed product occurred in New York, as the New York plaintiff purchased the capacitors at issue
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`“in New York.” Dkt. No. 1589 ¶ 34. This is sufficient for IPPs to move forward under the New
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`York consumer protection statute.
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`2.
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`Florida: Consumer Protection Statute
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`Defendants’ contentions under Florida law sound similar themes. They say that Florida’s
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`consumer protection statute, the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat.
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`§§ 501.201 et seq. (“FDUTPA”), “applies only to actions that occurred within the state of
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`Florida.” Dkt. No. 1372 at 7 (quoting Five for Entm’t S.A. v. Rodriguez, 877 F. Supp. 2d 1321,
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`1330-31 (S.D. Fla. 2012)). IPPs argue that the statute contains no geographical or residential
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`restrictions, and all that is required is an effect on the Florida market. Dkt. No. 1407 at 12 (citing
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`Execu-Tech Bus. Sys. v. New Oji Paper Co., 752 So.2d 582, 584-85 (Fla. 2000)).
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`As both sides appear to recognize, Florida law on this issue is scant. Neither defendants
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`nor IPPs have identified a case that answers the question, or even suggests an answer, or any other
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`source such as legislative history that might provide some illumination. The plain language of the
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`FDUTPA does not on its face rule out IPPs’ allegations, and in the absence of any solid authority
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`from defendants to the contrary, the Court declines to terminate the FDUTPA claims as a matter of
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`Case 3:14-cv-03264-JD Document 2193 Filed 09/20/18 Page 6 of 12
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`law. This claim, too, may be tested on the facts and record at the appropriate stage of the
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`litigation.
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`3.
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`Other State Law Claims
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`The Court notes that IPPs have also asserted claims under the competition laws of
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`California, Iowa, Michigan, Minnesota and Nebraska, and the consumer protection laws of
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`California and Nebraska. Defendants have not challenged these claims in these supplemental
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`proceedings. For the sake of clarity, the Court concludes that the reach of all of the IPPs’ state law
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`claims is coterminous with the FTAIA. No more and no less.
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`II.
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`THE FTAIA ISSUES FOR FLEXTRONICS
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`The Phase II motion for Flextronics entails the application of the Court’s initial FTAIA
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`determinations to several categories of its transactions. Dkt. No. 1661. Flextronics’ allegations
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`are presented separately in Docket Number 1831, which is the consolidated third amended class
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`action complaint of DPPs and complaint of Flextronics International USA, Inc.
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`Flextronics holds claims assigned to it by an extended family of nearly 100 overseas sister
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`companies (the “Foreign Flex Entities”). Defendants’ motion is directed solely to the assigned
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`claims. Dkt. No. 1661 at 2-3 & 8 n.13.1 They grumble a bit about how the assignments were
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`effectuated, see id. at 6-7 & n.10, but do not raise a serious attack on them. In any event, the
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`assignments do not affect the FTAIA analysis in any meaningful way because the nature of the
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`transaction, as opposed to the ownership of the claim, drives the outcome.
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`The assigned claims are a mix of direct and indirect purchases by the Foreign Flex Entities.
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`On the direct purchase side, the claims consist of: (1) capacitors sold and shipped by a foreign
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`defendant to a Foreign Flex Entity, and incorporated abroad into finished goods that were sold into
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`the U.S.; (2) capacitors sold and shipped by a foreign defendant to a Foreign Flex Entity, and
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`incorporated abroad into finished goods that were sold outside the U.S.; and (3) capacitors sold
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`and shipped by a defendant entity in the U.S. to a Foreign Flex Entity. On the indirect purchase
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`1 The parties agreed to defer briefing on the indirect purchaser claims of Flextronics USA in its
`own capacity, pending the Court’s resolution of IPPs’ FTAIA issues. Dkt. No. 1661 at 3 n.3.
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`Case 3:14-cv-03264-JD Document 2193 Filed 09/20/18 Page 7 of 12
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`side, the claims consist of capacitors sold by defendants to foreign distributors and then re-sold by
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`a distributor to a Foreign Flex Entity.
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`While the Phase II motion is formally one for summary judgment, it does not entail any
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`factual disputes. For present purposes only, defendants have accepted all of Flextronics’ factual
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`representations about “how capacitor prices were negotiated,” Dkt. No. 1807 at 1 n.2, and they
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`focus on legal, not factual, arguments in support of their motion. Dkt. No. 1807.
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`A.
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`CAPACITORS SOLD AND SHIPPED BY A FOREIGN DEFENDANT TO A
`FOREIGN FLEX ENTITY, AND INCORPORATED ABROAD INTO
`FINISHED GOODS THAT WERE SOLD INTO THE UNITED STATES
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`For capacitors that were sold and shipped by a foreign defendant to a Foreign Flex Entity,
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`and then incorporated abroad by the Foreign Flex Entity into finished goods that were sold into the
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`United States, the main issue is whether these transactions count as “import commerce.” The
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`“Sherman Act applies to ‘import trade or import commerce’ with foreign nations. Put differently,
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`the FTAIA does not alter the Sherman Act’s coverage of import trade; import trade is excluded
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`from the FTAIA altogether.” United States v. Hsiung, 778 F.3d 738, 751 (9th Cir. 2015).
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`The dispute turns on one question: is it essential for defendants to do the importing
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`themselves for a transaction to count as import? Defendants say yes, and that the proper focus is
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`on the immediate conduct of defendants and not plaintiffs in how a product came to be in the
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`United States. They point to Hsiung, 778 F.3d 738, and the Motorola line of cases (one of the
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`civil counterparts to the criminal case of Hsiung), which includes the Seventh Circuit’s opinion in
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`Motorola Mobility LLC v. AU Optronics Corp., 775 F.3d 816 (7th Cir. 2015). That opinion held
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`that it was “wrong” of Motorola to argue that certain transactions were import commerce where
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`“[i]t was Motorola, rather than the defendants, that imported these panels into the United States, as
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`components of the cellphones that its foreign subsidiaries manufactured abroad and sold and
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`shipped to it.” 775 F.3d at 818.
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`Flextronics rejects any notion that import commerce applies only when a defendant has
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`shipped a product directly into the United States. It is enough, in Flextronics’ view, that it “has
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`presented evidence that defendants sold capacitors to Flex Affiliates knowing that the capacitors
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`would be incorporated into goods that were intended to be (and were) shipped to the U.S.” Dkt.
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`No. 1722-3 at 20 n.20.
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`No one-size-fits-all definition of import commerce is present in the case law, or ever likely
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`to be so. Hsiung held that “import trade” “means precisely what it says,” but left open the
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`question of “whether commerce directed at, but not consummated within, an import market” falls
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`under the FTAIA’s import language. Hsiung, 778 F.3d at 754-55 & n.8. Even so, Hsiung
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`provides good reasons to conclude that import trade should be not limited to situations where a
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`defendant has directly brought a good into the United States. This is evidenced by Hsiung’s
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`favorable citation to the Third Circuit’s determination that import trade “applies to importers and
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`to defendants whose ‘conduct is directed at a U.S. import market,’ even if the defendants did not
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`engage in importation of products into the United States.” Id. at 755 n.8 (quoting Animal Sci.
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`Prods., Inc. v. China Minmetals Corp., 654 F.3d 462, 471 & n.11 (3d Cir. 2011)). Hsiung also
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`assumed that certain types of transactions amounted to import commerce, as when, for example,
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`“AUO employees ‘had one-on-one discussions in person or by phone with representatives of
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`coconspirator TFT-LCD manufacturers during which they reached agreements on pricing of TFT-
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`LCD sold to certain customers, including customers located in the United States.’” Id. at 755.
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`The court additionally noted that trial testimony “establish[ing] that AUO imported over one
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`million price-fixed panels per month into the United States” included evidence that “AUO and
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`AUOA executives and employees negotiated with United States companies in the United States to
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`sell TFT-LCD panels at the prices set at the Crystal Meetings.” Id. at 756.
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`Flextronics follows that line of thought to contend that defendants’ alleged conspiracy
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`“was intended to and did inflate the price of capacitors sold in the U.S.”; defendants engaged in
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`acts in furtherance of the conspiracy in the United States, “including meeting in the U.S. with Flex
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`management to negotiate capacitor prices”; and defendants “knew a substantial portion of the
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`capacitors purchased by the Flex Affiliates were purchased in order to manufacture goods for
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`Flex’s U.S. customers or were intended to be and were incorporated into electronic goods shipped
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`to the U.S. for sale in the U.S. market.” Dkt. No. 1722-3 at 3, 8-11. Flextronics has also named
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`its specific U.S. customers who were allegedly known to defendants, and states that defendants
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`had “specific conspiratorial discussions” and “reached agreements targeting the price of capacitors
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`Flex purchased for incorporation into products manufactured for” those U.S. customers. Id. at 11.
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`For purposes of this motion, defendants have not contested those factual representations. Dkt.
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`No. 1807.
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`This state of the record leaves open the possibility that all transactions in this category may
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`be subject to the Sherman Act as “import trade or commerce.” The Court cannot definitively
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`exclude them at this juncture, all the more so because they might also come within the FTAIA’s
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`domestic effects exception. These transactions remain in the case for disposition at trial.
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`So too for capacitors that were “purchased [by the Foreign Flex Entities] abroad and
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`shipped to Mexico for manufacture into goods shipped to the United States pursuant to the
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`IMMEX trade agreement.” Dkt. No. 1722-3 at 20. Flextronics contends that these products are
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`potentially within the scope of import commerce because they are “required under Mexican law to
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`be subsequently transported out of Mexico,” and so there is a triable question about whether these
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`goods count as import commerce. Id.; see also In re TFT-LCD (Flat Panel) Antitrust Litigation,
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`No. C 09-5609 SI, 2012 WL 3763616, at *2 (N.D. Cal. Aug. 29, 2012). Defendants essentially
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`agree for now. See Dkt. No. 1807 at 15 n.11. The IMMEX transactions remain in the case for
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`further proceedings.
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`B.
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`CAPACITORS SOLD AND SHIPPED BY A FOREIGN DEFENDANT TO A
`FOREIGN FLEX ENTITY, AND INCORPORATED ABROAD INTO
`FINISHED GOODS THAT WERE SOLD OUTSIDE THE UNITED STATES
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`The next category consists of capacitors sold and shipped by a foreign defendant to a
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`Foreign Flex Entity, and then incorporated into a finished good that was ultimately sold outside of
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`the United States. For this category, the issue is whether these transactions fall under the domestic
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`effects exception in the FTAIA. Flextronics agrees that these transactions are not import
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`commerce.2
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`2 See Dkt. No. 1722-3 at 20 (“Flex agrees with defendants that foreign purchases of capacitors that
`are not shipped to the United States do not fall within the import commerce exclusion, with one
`exception.”). The one exception is the last category discussed in Section II.A., supra -- i.e.,
`capacitors “purchased abroad and shipped to Mexico for manufacture into goods shipped to the
`United States pursuant to the IMMEX trade agreement.” Id. at 20.
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`To refresh, the domestic effects exception states that conduct involving non-import trade or
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`commerce with foreign nations is subject to the Sherman Act only if (1) the conduct had a “direct,
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`substantial and reasonably foreseeable effect” on U.S. domestic commerce, and (2) such U.S.
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`domestic effect “gives rise to” the plaintiff’s Sherman Act claim. 15 U.S.C. § 6a. In effect, the
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`inquiry is whether the alleged price-fixing conspiracy had an impact in the United States that
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`would allow Flextronics (on behalf of the Foreign Flex Entities) to sue under the Sherman Act.
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`On the record before the Court, the answer is no. The capacitors in this category were sold
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`abroad, incorporated into finished goods abroad, and the finished goods were sold abroad. There
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`was no impact on a U.S. purchaser or consumer, and no allegation that anyone in the United States
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`paid a supra-competitive price for these capacitors. To impose the Sherman Act on overseas
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`transactions of this sort would undermine Congress’s intent in the FTAIA and “create[] a serious
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`risk of interference with a foreign nation’s ability independently to regulate its own commercial
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`affairs.” Empagran, 542 U.S. at 165; see also Motorola Mobility, 775 F.3d at 820 (“U.S. antitrust
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`laws are not to be used for injury to foreign customers.”) (quotations omitted). If it turns out that
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`the antitrust laws or enforcement policies of the host country are weak or non-existent, that risk
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`was implicitly accepted in choosing to do business there. Id. The FTAIA expressly bars the
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`application of U.S. federal antitrust laws as a substitute for overseas enforcement.
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`Other cases in our circuit have reached the same conclusion under similar circumstances.
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`In DRAM, for example, our circuit determined that the FTAIA “clarifies that U.S. antitrust laws
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`concern the protection of ‘American consumers and American exporters, not foreign consumers or
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`producers.’” DRAM, 546 F.3d at 986 (emphasis in original; citation omitted). The relevant effect
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`is that on American commerce. Id. The facts for this category of Flextronics’ transactions show
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`no such effect. The most Flextronics alleges is that its “U.S. management agreed on behalf of the
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`Flex Affiliates to purchase capacitors following negotiations that took place in the U.S. and/or
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`were directed and controlled by U.S. management.” Dkt. No. 1722-3 at 6. This may be
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`“domestic” in the geographic sense that something happened within the United States, but it is not
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`a “direct, substantial, and reasonably foreseeable effect” on U.S. domestic commerce. See also In
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`re ODD, Case No. 10-md-02143-RS (N.D. Cal.), Dkt. No. 2706, at 2-3 & 12 (concluding that
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`“foreign sales to foreign consumers,” which include ODDs sold by defendants to plaintiffs and
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`their subsidiaries “outside the United States for incorporation into computers that were
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`subsequently sold to foreign consumers,” are “too far removed and are not within the scope of
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`either the federal or state antitrust laws,” and that purchases in this category “concern precisely the
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`foreign consumers and producers, and wholly foreign transactions, that the FTAIA shields”);
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`Motorola Mobility, 775 F.3d at 818-19 (“The panels -- 57 percent of the total -- that never entered
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`the United States neither affected domestic U.S. commerce nor gave rise to a cause of action under
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`the Sherman Act.”).
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`Flextronics’ proximate causation position is equally infirm. It says that the conspiracy
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`“inflated the price at which Flex’s U.S. management agreed on behalf of the Flex Affiliates to
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`purchase capacitors following negotiations that took place in the U.S. and/or were directed and
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`controlled by U.S. management,” and the “‘practical upshot’ of distorting the purchase terms
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`agreed upon by Flex’s U.S. management was that the Flex Affiliates purchased capacitors at the
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`artificially inflated prices set or authorized by Flex U.S. management.” Dkt. No. 1722-3 at 6.
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`This in effect simply rewords the DPPs’ global pricing theory, which the Court has already
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`declined to adopt as a matter of law. 2016 WL 5724960, at *6.
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`C.
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`CAPACITORS SOLD AND SHIPPED BY A DEFENDANT ENTITY IN THE
`UNITED STATES TO A FOREIGN FLEX ENTITY
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`This category of transactions -- capacitors sold and shipped by a defendant entity in the
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`United States to a Foreign Flex Entity -- concerns precisely the kind of conduct that the FTAIA
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`sought to free from the constraints of the Sherman Act. See Empagran, 542 U.S. at 161 (“FTAIA
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`seeks to make clear to American exporters . . . that the Sherman Act does not prevent them from
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`entering into business arrangements (say, joint-selling arrangements), however anticompetitive, as
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`long as those arrangements adversely affect only foreign markets.”). Flextronics has not offered
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`any new evidence or arguments for this category other than the ones discussed above, and so the
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`Court concludes this category, too, must be ruled out as currently presented, except where the
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`capacitors subsequently ended up back in the United States, either as stand-alone products or as
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`components of finished goods.
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`Case 3:14-cv-03264-JD Document 2193 Filed 09/20/18 Page 12 of 12
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`D.
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`CAPACITORS SOLD BY A FOREIGN DEFENDANT TO A FOREIGN
`DISTRIBUTOR WHO THEN RESOLD TO A FOREIGN FLEX ENTITY
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`Defendants’ motion challenges only this single category of indirect purchases -- capacitors
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`sold by a foreign defendant to a foreign distributor, who then resold the capacitors to a Foreign
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`Flex Entity -- arguing that under Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), “only the first
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`direct purchaser of an allegedly price-fixed product may bring suit for federal antitrust damages.”
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`Dkt. No. 1661 at 17. Flextronics cannot, and does not, disagree. See Dkt. No. 1722-3 at 5 n.4 &
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`16 (stating that it is “uncontroversial” that “neither Flex or the Flex Affiliates may pursue indirect
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`purchaser claims under the Sherman Act,” and that Flextronics “does not seek damages based on
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`any injury derived from or passed on from the Flex Affiliates.”). The parties did not directly
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`address how the FTAIA might limit Flextronics’ non-damages claims for the purchases in this
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`category, but that analysis would likely proceed along the lines already laid out in the rest of this
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`order.
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`CONCLUSION
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`The Court denies defendants’ requests to circumscribe the scope of IPPs’ New York and
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`Florida state law claims. The Court grants in part and denies in part defendants’ Phase II requests
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`to rule out certain categories of transactions that form the bases of Flextronics’ claims in this case.
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`This completes the resolution of the pending legal FTAIA issues. The parties are in the
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`best position to work out in the first instance how these rulings apply more broadly to the detailed
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`transactional categories and data in all of the cases that are now a part of this MDL. To the extent
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`the parties believe further proceedings on an FTAIA issue would be helpful, they may raise the
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`matter with the Court.
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`IT IS SO ORDERED.
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`Dated: September 20, 2018
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`JAMES DONATO
`United States District Judge
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