Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 1 of 139
`
`
`
`
`
`
`Joseph W. Cotchett (36324)
`Steven N. Williams (175489)
`Adam J. Zapala (245748)
`Elizabeth Tran (280502)
`COTCHETT, PITRE & McCARTHY, LLP
`840 Malcolm Road, Suite 200
`Burlingame, CA 94010
`Telephone: (650) 697-6000
`Facsimile: (650) 697-0577
`jcotchett@cpmlegal.com
`swilliams@cpmlegal.com
`azapala@cpmlegal.com
`etran@cpmlegal.com
`
`Interim Lead Counsel for the
`Putative Indirect Purchaser Class
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`SAN FRANCISCO DIVISION
`
`
`
`
`IN RE CAPACITORS ANTITRUST
`LITIGATION
`
`
`
`THIS DOCUMENT RELATES TO:
`
`ALL INDIRECT PURCHASER ACTIONS
`
`
`
`Master File No. 14-cv-03264-JD
`
`INDIRECT PURCHASER PLAINTIFFS’
`FIFTH CONSOLIDATED COMPLAINT
`
`JURY DEMAND
`
`
`
`
`
`**REDACTED – PUBLIC VERSION**
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`
`20
`
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
`
`
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 2 of 139
`
`
`
`
`
`1
`
`2
`
`TABLE OF CONTENTS
`
`Page
`
`3
`
`I. NATURE OF ACTION ........................................................................................................ 1
`
`4
`
`II. GOVERNMENT INVESTIGATIONS ................................................................................ 5
`
`5
`
`III. JURISDICTION AND VENUE ........................................................................................... 7
`
`6
`
`IV. PARTIES .............................................................................................................................. 9
`
`A. Plaintiffs .................................................................................................................... 9
`
`B. Defendants .............................................................................................................. 12
`
`1. Defendants Involved in Both Electrolytic and Film Capacitor
`Conspiracies ................................................................................................ 12
`
`a. Hitachi Defendants.......................................................................... 12
`
`b. Nippon Chemi-Con Defendants ...................................................... 13
`
`c. Rubycon Defendants ....................................................................... 13
`
`d. Panasonic Defendants ..................................................................... 14
`
`2. Defendants Involved in Electrolytic Capacitor Conspiracy........................ 15
`
`a. Elna Defendants .............................................................................. 15
`
`b. Defendant Matsuo Electric Co., Ltd. .............................................. 15
`
`c. NEC TOKIN Defendants ................................................................ 16
`
`d. Nichicon Defendants ....................................................................... 16
`
`e. Holy Stone Defendants ................................................................... 17
`
`3. Defendants Involved in Film Capacitor Conspiracy ................................... 19
`
`a. Defendant Nissei Electric Co., Ltd. ................................................ 19
`b. Defendant Nitsuko Electronics Corp. ............................................. 19
`
`c. Defendant Okaya Electric Industries Co., Ltd. ............................... 19
`
`d. Shinyei Defendants ......................................................................... 20
`
`e. Defendant Soshin Electric Co., Ltd. ............................................... 20
`
`f. Defendant Taitsu Corp. ................................................................... 21
`
`g. Defendant Toshin Kogyo Co., Ltd. ................................................. 21
`
`V. AGENTS AND CO-CONSPIRATORS ............................................................................. 21
`
`A. Co-Conspirator AVX Corp. as to the Electrolytic Conspiracy ............................... 21
`
`B. Co-Conspirators KEMET Electronics Corp. and KEMET Corp. as to the
`Electrolytic Conspiracy ........................................................................................... 22
`
`
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
` i
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 3 of 139
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`VI. INTRODUCTION TO CAPACITORS .............................................................................. 23
`
`A. Background on Capacitors ...................................................................................... 23
`
`B. Capacitor Structure ................................................................................................. 26
`
`C. Capacitor Technologies .......................................................................................... 27
`
`D. Aluminum Electrolytic Capacitors ......................................................................... 29
`
`E. Tantalum Electrolytic Capacitors ........................................................................... 30
`
`F. Film Capacitors ....................................................................................................... 33
`
`G. Capacitors Are Traceable Through the Chain of Distribution ................................ 34
`
`VII. FACTUAL ALLEGATIONS ............................................................................................. 35
`
`A. Defendants Conspired to Unlawfully Fix and Artificially Raise the Prices of
`Electrolytic and Film Capacitors ............................................................................ 35
`
`1. Electrolytic Capacitor Conspiracy .............................................................. 36
`
`a. Group Meetings and Discussions.................................................... 36
`
`i. Pre-ATC Meetings .............................................................. 36
`
`ii. ATC Meetings ..................................................................... 37
`
`iii. Marketing Study Group Meetings ...................................... 37
`
`b. Bilateral Meetings and Discussions ................................................ 39
`
`2. Film Capacitor Conspiracy ......................................................................... 41
`
`a. Group Meetings and Discussions.................................................... 41
`
`i. JFC Meetings ...................................................................... 41
`
`ii. Singapore Meetings ............................................................ 42
`
`b. Bilateral Meetings and Discussions ................................................ 43
`
`c. Illustrative Examples of U.S. Subsidiaries Engaging in
`Conspiratorial Conduct ................................................................... 43
`
`B. Co-Conspirators AVX and KEMET’s Involvement in Price-Fixing Electrolytic
`Capacitors ............................................................................................................... 45
`
`C. Defendants’ Corporate Families Acted as Single Enterprises. Defendant Parent
`Companies Exercised Substantial Control over Their U.S. Subsidiaries. .............. 50
`
`1. Defendants’ High-Level Employees Organized the Conspiracies
`and Their Subordinate Employees—Including Those of Their U.S.
`Subsidiaries—Executed the Conspiracies................................................... 52
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
`
`
`ii
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 4 of 139
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`2. Defendants’ Representatives who Attended Conspiratorial Meetings
`and Engaged in Collusive Conduct Participated in Discussions on
`Behalf of Entire Corporate Families and Failed to Distinguish
`Between Corporate Entities in the Same Corporate Family. ...................... 54
`
`3. Each Defendant Parent Company, Along With Its U.S. Subsidiary,
`Hold Themselves Out as a Single Integrated Enterprise. ........................... 56
`
`a. Elna Corporate Family .................................................................... 56
`
`b. Hitachi Corporate Family ............................................................... 56
`
`c. NEC TOKIN Corporate Family ...................................................... 57
`
`d. Nichicon Corporate Family............................................................. 57
`
`e. Nippon Chemi-Con Corporate Family............................................ 60
`
`f. Panasonic/Sanyo Corporate Family ................................................ 62
`
`g. Rubycon Corporate Family ............................................................. 63
`
`4. The Nature of the Capacitor Industry Required Foreign Companies
`Named As Defendants Herein to Use Their U.S. Subsidiaries As
`Sales Arms for Price-Fixed Capacitors. ...................................................... 64
`
`D. Capacitor Industry Trends....................................................................................... 65
`
`1. Aluminum Electrolytic Capacitors ............................................................. 67
`
`2. Tantalum Electrolytic Capacitors ............................................................... 68
`
`3. Film Capacitors ........................................................................................... 68
`
`E. The Characteristics of the Electrolytic and Film Capacitor Market Render
`Collusion More Plausible. ....................................................................................... 68
`
`1. Electrolytic and Film Capacitor Industry Has High Barriers to
`Entry. 69
`
`2. The Demand for Electrolytic and Film Capacitors Is Inelastic. .................. 72
`
`3. The Electrolytic and Film Capacitor Industry Is Highly
`Concentrated. .............................................................................................. 73
`
`4. Electrolytic and Film Capacitors Are Homogenous and
`Commoditized Products. ............................................................................. 74
`
`5. Defendants Had Ample Opportunities to Conspire. ................................... 76
`
`6. Indirect Purchasers of Capacitors Lacked Buying Power........................... 80
`
`7. Falling Demand for Capacitors Over Time. ............................................... 81
`
`a. Demand for Capacitors in the Americas ......................................... 83
`
`b. Demand for Capacitors Over Time ................................................. 84
`
`F. Capacitor Manufacturers Had Relationships in Other Price-Fixed Markets. ......... 85
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
`
`
` iii
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 5 of 139
`
`
`
`
`
`VIII. DEFENDANTS COLLUDED TO KEEP THE PRICE OF ELECTROLYTIC AND
`FILM CAPACITORS ELEVATED DURING THE CLASS PERIOD ............................. 85
`
`A. Defendants Had a Motive to Conspire. ................................................................... 86
`
`B. The Price Movements of Electrolytic and Film Capacitors During the
`Respective Class Periods Are Consistent with Collusion, Not Competition. ......... 89
`
`1. Pricing Behavior Was Inconsistent with Cost. ........................................... 90
`
`2. Pricing Behavior Was Inconsistent with Demand. ..................................... 91
`
`C. Defendants Conspired to Constrain Supply. ........................................................... 92
`
`D. Guilty Pleas in Related Markets ............................................................................. 92
`
`1. Hitachi 93
`
`2. Panasonic/Sanyo ......................................................................................... 93
`
`3. NEC TOKIN ............................................................................................... 93
`
`IX. ANTITRUST INJURY ....................................................................................................... 94
`
`X. THE STATUTE OF LIMITATIONS DO NOT BAR PLAINTIFFS’ CLAIMS ............... 94
`
`A. The Statute of Limitations Did Not Begin to Run Because Plaintiffs Did Not
`and Could Not Discover Their Claims.................................................................... 94
`
`B. Fraudulent Concealment Tolled the Statute of Limitations .................................... 97
`
`1. False Representations Regarding Raw Material Shortages ........................ 97
`
`2. False Representations Regarding Production Delays ................................. 98
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`XI. AFFECTED TRADE AND COMMERCE ...................................................................... 100
`
`19
`
`20
`
`21
`
`22
`
`A. Defendants’ Conduct Involved Import Trade or Import Commerce .................... 101
`
`B. Defendants’ Conduct Had a Direct, Substantial, and Reasonably Foreseeable
`Effect on U.S. Domestic and Import Trade or Commerce That Gave Rise to
`Plaintiffs’ Antitrust Claims ................................................................................... 102
`
`C. The Capacitor Cartel Targeted the United States. ................................................ 104
`
`23
`
`XII. CLASS ACTION ALLEGATIONS ................................................................................. 106
`
`24
`
`XIII. VIOLATIONS ALLEGED ............................................................................................... 110
`
`FIRST CLAIM FOR RELIEF
`(Violations of Sherman Act, 15 U.S.C. § 1)
`(On Behalf of All Plaintiffs Against All Defendants) .................................................................. 110
`
`SECOND CLAIM FOR RELIEF
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
` iv
`
`25
`
`26
`
`27
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 6 of 139
`
`
`
`
`
`(Violations of State Antitrust and Restraint of Trade Laws)
`(On Behalf of Plaintiffs Against All Defendants)......................................................................... 111
`
`THIRD CLAIM FOR RELIEF
`(Violations of State Consumer Protection and Unfair Competition Laws)
`(On Behalf of All Plaintiffs Against All Defendants) .................................................................. 117
`
`XIV. REQUEST FOR RELIEF ................................................................................................. 122
`
`JURY DEMAND .......................................................................................................................... 129
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
` v
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 7 of 139
`
`
`
`
`
`1
`
`
`
`Indirect Purchaser Plaintiffs (“Plaintiffs”), on behalf of themselves and all others similarly
`
`2
`
`3
`
`4
`
`5
`
`situated (“Classes” as defined below), upon personal knowledge as to the facts pertaining to them and
`
`upon information and belief as to all other matters, and based on the investigation of counsel, bring
`
`this class action for damages, injunctive relief and other relief pursuant to federal antitrust laws and
`
`state antitrust, unfair competition, and consumer protection laws. Plaintiffs demand a trial by jury and
`
`6
`
`allege as follows:
`
`7
`
`I. NATURE OF ACTION
`
`8
`
`9
`
`10
`
`11
`
`1. This lawsuit is brought against defendants1, the leading manufacturers of capacitors
`
`sold in the United States, for engaging in two massive and separate conspiracies to unlawfully inflate,
`
`fix, raise, maintain or artificially stabilize the prices of electrolytic and film capacitors, respectively.2
`
`Defendants’ conspiracies successfully targeted various industries in the United States, raising prices
`
`12
`
`for direct and indirect purchasers of electrolytic and film capacitors alike.
`
`2. Plaintiffs seek to represent all persons and entities in the United States who purchased
`
`one or more electrolytic capacitor(s) from a capacitor distributor, which a defendant, its current or
`
`13
`
`14
`
`15
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`16
`
`1 Elna Co., Ltd., Elna America Inc., Hitachi Chemical Co., Ltd., Hitachi Chemical Co. America,
`Hitachi AIC Inc., Ltd., Ltd., Matsuo Electric Co., Ltd., NEC TOKIN Corp., Nichicon Corp., Nippon
`Chemi-Con Corp., United Chemi-Con, Inc., Matsuo Electric Co., Ltd., NEC TOKIN Corp., NEC
`TOKIN America Inc., Holy Stone Enterprise Co., Ltd.; Holy Stone Holdings Co., Ltd.; Holy Stone
`Polytech Co., Ltd.; Milestone Global Technology, Inc. (D/B/A HolyStone International), Nichicon
`Corp., Nichicon America Corp., Nissei Electric Co., Ltd., Nitsuko Electronics Corp., Okaya Electric
`Industries Co., Ltd., Panasonic Corp., Panasonic Corp. of North America, Rubycon Corp., Rubycon
`America Inc., Sanyo Electric Co., Ltd., Sanyo Electronic Device (U.S.A.) Corp., Shinyei Technology
`Co., Ltd., Soshin Electric Co., Ltd., Taitsu Corp., and Toshin Kogyo Co., Ltd. (collectively,
`“defendants”).
`2 As Plaintiffs are in the early stages of discovery concerning the nature and scope of the electrolytic
`and film capacitor conspiracies, and as the Court granted the United States Department of Justice’s
`motion to intervene and stayed discovery until April 15, 2015 per its October 30, 2014 Civil Minutes
`(ECF No. 309), Plaintiffs still have substantial discovery to conduct regarding defendants’ meetings,
`discussions, and agreements. Plaintiffs must be able to significantly advance the inquiry into and
`analysis of defendants’ conspiratorial conduct before we can firmly reach conclusions regarding the
`nature, scope, and effects of the conspiracies. As such, while the Complaint currently alleges separate
`meetings and discussions regarding electrolytic and film capacitors, further discovery may reveal that
`there was one overarching conspiracy due to the overlapping defendants and customers or more than
`two conspiracies.
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
` 1
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 8 of 139
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`former subsidiary, or any of its co-conspirators sold from April 1, 2002 through such time as the
`
`anticompetitive effects of defendants’ conduct ceased (“Electrolytic Class Period”).
`
`3. Plaintiffs also seek to represent all persons and entities in the United States who
`
`purchased one or more film capacitor(s) from a capacitor distributor, which a defendant, its current
`
`or former subsidiary of, or any of its co-conspirators sold from January 1, 2002 through such time as
`
`the anticompetitive effects of defendants’ conduct ceased (“Film Class Period”).
`
`4. Plaintiffs purchased electrolytic and film capacitors as a stand-alone product. When
`
`purchased as a stand-alone product, electrolytic and film capacitors are traceable to the specific
`
`manufacturer. A capacitor is traceable to an entity owned and/or controlled by a defendant because it
`
`10
`
`bears the defendant’s markings (e.g., name, logo, series).
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`5. Capacitors are one of the most common electronic components in the world today.
`
`They store electric charge between one or more pairs of conductors separated by an insulator. Almost
`
`all electronic products—from cellphones to personal computers to home appliances—contain them,
`
`often hundreds of them. The three basic types of capacitors are ceramic, electrolytic, and film, the
`
`latter two of which are the subject of Plaintiffs’ Second Consolidated Complaint (“Complaint”).
`
`Electrolytic and film capacitors are widely used in a range of industries, such as information and
`
`17
`
`telecommunications, audiovisual, and electronic games.
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`6. An “electrolytic capacitor” uses an electrolyte (an ionic conducting liquid) as one of
`
`its plates to achieve a relatively larger capacitance per unit volume. As used in this Complaint,
`
`electrolytic capacitors include the following: circular polymer aluminum electrolytic capacitors,
`
`rectangular polymer aluminum capacitors, rectangular polymer tantalum capacitors, non-polymer
`
`aluminum electrolytic capacitors, and non-polymer electrolytic double-layer capacitors (“ELDC”).
`
`Manufacturers of polymer electrolytic capacitors compete on shape (i.e., rectangular capacitor
`
`manufacturers compete with each other). Electrolytic capacitors can vary significantly by voltage and
`
`25
`
`capacitance.
`
`7. Applications of circular polymer aluminum electrolytic capacitors include personal
`
`computers (PCs), digital audiovisuals (AV), games, and industrial appliances. Applications of
`
`rectangular polymer aluminum electrolytic capacitors include notebook PCs, tablets, digital AVs,
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
` 2
`
`26
`
`27
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 9 of 139
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`amusement, servers, and communications. Applications of rectangular polymer tantalum capacitors
`
`include notebook PCs, games, cellular phones, smart phones, and digital still cameras. Applications
`
`of non-polymer aluminum electrolytic capacitors include digital AV, information and
`
`communications, various power supply circuits, and inverter circuits. ELDC are best suited for the
`
`power backup needs of high reliability systems.
`
`
`Figure 1: The Sanyo defendants manufacture electrolytic capacitors, including circular
`aluminum polymer capacitors (brand name: OS-CON) and rectangular tantalum polymer
`capacitors (brand name: POS-CAP).
`
`8
`
`
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`
`
`
`
`15
`
`Source: http://industrial.panasonic.com/ww/products/capacitors
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`8. A “film capacitor” uses insulating plastic film and one of two conductive materials,
`
`propylene or polyester. As used in this Complaint, film capacitors include the following four
`
`generations: (1) film and aluminum foil capacitors, (2) film and other metal capacitors, (3) layered
`
`capacitors, and (4) surface-mount capacitors (i.e., capacitors without leaves). Each generation
`
`contains different types of general purpose capacitors and specific purpose capacitors.
`
`9. Applications of film capacitors include appliances, lighting, power supply, digital AV,
`
`communications, games, direct current (DC) link for inverters, snubber for inverters, in battery filters,
`
`23
`
`and in electric compressors.
`
`24
`
`///
`
`25
`
`///
`
`
`26
`
`27
`
`
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
` 3
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 10 of 139
`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 10 of 139
`
`Figure 2: The Panasonic defendants manufacturefilm capacitors.
`
`
`
`Source: http://industrial.panasonic.com/ww/products/capacitors
`
`10.
`
`As hereinafter more fully alleged,
`
`the Hitachi, Nippon Chemi-Con (“NCC”),
`
`1
`
`g||
`
`9
`
`10}|| Rubycon, and Panasonic defendants participated in two conspiracies: the electrolytic capacitor cartel
`
`11}|
`
`12||
`
`from Aprill, 2002 until such time as defendants’ unlawful conduct ceased and the film capacitor
`
`cartel from January 1, 2002 until such time as defendants’ unlawful conduct ceased. The Elna,
`
`13]| Matsuo, NEC TOKIN, and Nichicon defendants participated in the aforementioned electrolytic
`
`14]|capacitor cartel. The Nissei, Nitsuko, Okaya, Shinyei, Soshin, Taitsu, and Toshin Kogyo defendant
`
`15||
`
`16||
`
`families participated in the aforementioned film capacitor cartel. Defendants frequently discussed
`
`confidential and sensitive business information with each other, either at regular conspiratorial
`
`17|| meetings, such as the Aluminum Tantalum Capacitor (ATC) meetings and Japan Film Capacitor
`
`1s}||
`
`(JFC) meetings, or through bilateral conspiratorial discussions to raise and stabilize electrolytic and
`
`19]|film capacitor prices.
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& McCarty, LLP
`
`Figure 3: An illustration of electrolytic and film capacitor cartel memberships.
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 11 of 139
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`11. Defendants manufacture, market, and sell electrolytic and film capacitors throughout
`
`and into the United States. Defendants and other co-conspirators (as yet unknown) agreed, combined,
`
`and conspired to inflate, fix, raise, maintain or artificially stabilize prices of electrolytic and film
`
`capacitors. The combination and conspiracy engaged in by defendants and other co-conspirators was
`
`in violation of the Sherman Act (15 U.S.C. § 1) and various state antitrust, unfair competition, and
`
`6
`
`consumer protection laws.
`
`7
`
`8
`
`9
`
`12. As a direct result of the anticompetitive and unlawful conduct alleged herein, Plaintiffs
`
`and the Classes paid artificially inflated prices for electrolytic and film capacitors during the
`
`respective Class Periods and have thereby suffered antitrust injury to their business or property.
`
`10
`
`II. GOVERNMENT INVESTIGATIONS
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`13. Competition authorities in the United States, Asia, and Europe have been coordinating
`
`their investigations into the electrolytic and film capacitor cartels since March 2014 or earlier. The
`
`coordinated investigation between the United States Department of Justice (“DOJ”) and the China
`
`National Development and Reform Commission (“China NDRC”) could be a first for both agencies.
`
`14. Several competition authorities in Asia have already conducted dawn raids on
`
`capacitor manufacturers. The China NDRC raided NEC TOKIN and non-defendant Taiyo Yuden3 in
`
`March 2014. The South Korea Fair Trade Commission raided a Panasonic sales office in South Korea
`
`in early May 2014. And the Japan Fair Trade Commission (“JFTC”) raided nine companies on June
`
`24, 2014 suspected of forming a cartel extending overseas from Japan. These companies were Elna
`
`Co., Ltd., Hitachi Chemical Co., Ltd., Matsuo Electric Co., Ltd., NEC TOKIN Corp., Nichicon Corp.,
`
`Nippon Chemi-Con Corp., Panasonic Corp., Rubycon Corp., and Sanyo Electric Co., Ltd. These
`
`companies collectively control either a large share of the Japanese market for electrolytic capacitors
`
`or the Japanese market for film capacitors. The JFTC alleges that these companies formed cartels in
`
`Japan, China, and the United States, and their sales executives and other officials coordinated the
`
`amount and timing of price increases in the last several years. The JFTC stated that the conspiracies
`
`intensified after the 2008 economic crisis and again after the 2011 Great East Japan Earthquake when
`
`
`27
`3 Taiyo Yuden manufactures ceramic capacitors only. Plaintiffs have not named it as a defendant in
`this Complaint but reserve the right to do so upon further investigation.
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
` 5
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 12 of 139
`
`
`
`
`
`1
`
`defendants aggressively controlled supply and coordinated price hikes to ensure supra-competitive
`
`2
`
`prices for their products.
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`15. The DOJ investigation is originating out of its San Francisco office, which has been
`
`investigating cartels in the computer parts industry for the past decade, resulting in hundreds of
`
`millions of dollars in criminal fines against manufacturers of memory, liquid crystal displays, optical
`
`disc drives, and lithium-ion batteries. A capacitor manufacturer had approached the DOJ and China
`
`NDRC with news of anticompetitive conduct in the worldwide capacitor industry, launching what
`
`the DOJ’s Antitrust Division acknowledged as its latest international cartel investigation. The
`
`capacitor manufacturer also applied to the DOJ’s Corporate Leniency Program pursuant to the
`
`Antitrust Criminal Penalty Enhancement and Reform Act (“ACPERA”), which limits the civil
`
`liability of a leniency applicant to the actual damages attributable to the entity’s conduct rather than
`
`the usual joint and several and trebled damages faced by antitrust defendants.
`
`16. The DOJ investigation into the capacitor industry stemmed from a “leniency plus”
`
`situation in the DOJ investigation into the automotive parts industry. A leniency plus situation arises
`
`when a company unable to obtain leniency for one conspiracy can be given a lighter sentence by
`
`reporting its involvement in a separate, as yet undiscovered conspiracy. Plaintiffs believe that the
`
`leniency applicant is Panasonic Corp, which is a named defendant in three automotive parts cases in
`
`In re Automotive Parts Antitrust Litigation, MDL No. 2311 (E.D. Mich.), including In re Switches
`
`(Case No. 2:13-cv-01300), In re Steering Angle Sensors (Case No. 2:13-cv-01600), and In re High
`
`Intensity Discharge Ballasts (Case No. 2:13-cv-01700). Plaintiffs believe Panasonic Corp.
`
`approached the DOJ and China NDRC about the electrolytic and film capacitor conspiracies after the
`
`DOJ charged and penalized it for participating in the switches, steering angle sensors, and high
`
`23
`
`intensity discharge ballasts conspiracies.
`
`17. Notably, the defendants’ anticompetitive behavior is the subject of a DOJ criminal
`
`grand jury investigation. According to the Antitrust Division’s Manual, last revised in 2009, to
`
`institute a grand jury investigation, “staff should prepare a memorandum on behalf of the section or
`
`field office chief to the Director of Criminal Enforcement detailing the information forming the basis
`
`of the request.” Following a review of that memorandum, the request for a grand jury investigation
`
`INDIRECT PURCHASER PLAINTIFFS’ FIFTH CONSOLIDATED COMPLAINT
`
` 6
`
`24
`
`25
`
`26
`
`27
`
`28
`LAW OFFICES
`COTCHETT, PITRE
`& MCCARTHY, LLP
`
`
`
`

`

`Case 3:14-cv-03264-JD Document 1466 Filed 02/02/17 Page 13 of 139
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`must be approved by the Assistant Attorney General for the Antitrust Division based on the standard
`
`that a criminal violation may have occurred. Furthermore, the fact that the DOJ investigation is
`
`criminal, as opposed to civil, is significant. The Manual’s “Standards for Determining Whether to
`
`Proceed by Civil or Criminal Investigation” provides, “In general, current Division policy is to
`
`proceed by criminal investigation and prosecution in cases involving horizontal, per se unlawful
`
`agreements such as price fixing, bid rigging and horizontal customer and territorial allocations.” The
`
`existence of a criminal investigation into the electrolytic and film capacitor markets therefore support
`
`the existence of the conspiracies alleged in this Complaint.
`
`18. “This has the hallmarks of a major international cartel investigation,” said Philip
`
`Giordano, counsel at Kaye Scholer LLP and a 15-year veteran of the DOJ’s Antitrust Division
`
`(emphasis added). “The DOJ and its foreign counterparts are conducting parallel investigations.
`
`Many of the manufacturers under investigation are international conglomerates that sell into global
`
`13
`
`markets” (emphasis added).
`
`14
`
`III. JURISDICTION AND VENUE
`
`15
`
`16
`
`17
`
`18
`