Case 3:14-cv-03264-JD Document 1661 Filed 05/31/17 Page 1 of 28
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`
`
`Daniel W. Fox (SBN 268757)
`K&L GATES LLP
`4 Embarcadero Center, Suite 1200
`San Francisco, CA 94111
`Telephone: (415) 882-8200
`Facsimile: (415) 882-8220
`daniel.fox@klgates.com
`
`Scott M. Mendel (admitted pro hac vice)
`Steven M. Kowal (admitted pro hac vice)
`Michael E. Martinez (admitted pro hac vice)
`Lauren N. Donahue (admitted pro hac vice)
`Brian J. Smith (admitted pro hac vice)
`K&L GATES LLP
`70 West Madison Street, Suite 3100
`Chicago, IL 60602
`Telephone: (312) 372-1121
`Facsimile: (312) 827-8000
`scott.mendel@klgates.com
`steven.kowal@klgates.com
`michael.martinez@klgates.com
`lauren.donahue@klgates.com
`brian.j.smith@klgates.com
`
`
`Attorneys for Defendants Nichicon Corporation and
`Nichicon (America) Corporation
`
`[Additional Counsel Listed on Signature Page]
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN FRANCISCO DIVISION
`
`
`IN RE CAPACITORS ANTITRUST
`LITIGATION
`
`THIS DOCUMENT RELATES TO:
`
`FLEXTRONICS INTERNATIONAL USA,
`INC.’S INDIVIDUAL ACTION
`
`Case No. 3:14-cv-03264-JD
`
`DEFENDANTS’ NOTICE OF MOTION
`AND PHASE II JOINT MOTION FOR
`PARTIAL SUMMARY JUDGMENT
`DISMISSING FLEXTRONICS’S
`SHERMAN ACT AND CALIFORNIA
`STATE LAW CLAIMS FOR FOREIGN
`TRANSACTIONS
`
`[Fed. R. Civ. P. 56; L.R. 7-2, 7-4]
`
`Prior Related Court Order:
`Order re Phase I of Summary Judgment on
`Foreign Transactions [Docket No. 1302]
`
`Sept. 14, 2017
`Date:
`10:00 a.m.
`Time:
`Courtroom: 11, 19th Floor
`Before:
`The Hon. James Donato
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`Case 3:14-cv-03264-JD Document 1661 Filed 05/31/17 Page 2 of 28
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`TABLE OF CONTENTS
`
`2.
`
`3.
`
`b.
`
`Page No.
`NOTICE OF MOTION AND MOTION ............................................................................................. 1
`MEMORANDUM OF POINTS AND AUTHORITIES ..................................................................... 1
`I.
`STATEMENT OF ISSUES TO BE DECIDED ...................................................................... 1
`II.
`INTRODUCTION ................................................................................................................... 2
`III.
`STATEMENT OF FACTS ...................................................................................................... 3
`A.
`The Parties and Foreign Flex Entities .......................................................................... 3
`B.
`The Purchases of Capacitors by Foreign Flex Entities ................................................ 4
`C.
`Finished Goods Containing Capacitors Sold by Foreign Flex Entities ....................... 5
`LEGAL STANDARDS ........................................................................................................... 5
`ARGUMENT ........................................................................................................................... 6
`A.
`The Direct Purchaser Claims Assigned to Flextronics USA by Foreign Flex
`Entities Are Barred by the FTAIA ............................................................................... 8
`1.
`The Direct Purchases by the Foreign Flex Entities Are Not “Import
`Commerce” Under the FTAIA ......................................................................... 9
`The Direct Purchases by the Foreign Flex Entities Do Not Satisfy
`Either of the Required Elements of the FTAIA’s Domestic Injury
`Exception ....................................................................................................... 11
`a.
`Defendants’ alleged conduct did not have a direct, substantial,
`and reasonably foreseeable impact on domestic commerce .............. 12
`Any effect the defendants’ conduct had on U.S. commerce did
`not “give rise” to the claims of the Foreign Flex Entities and
`fails to establish proximate cause ...................................................... 14
`The FTAIA Bars Claims on the Export Sales of U.S. Defendants to
`Foreign Flex Entities ...................................................................................... 16
`The Indirect Purchaser Claims Assigned to Flextronics USA by Foreign Flex
`Entities Are Barred by Both the Indirect Purchaser Doctrine and the FTAIA .......... 17
`CONCLUSION ...................................................................................................................... 18
`
`
`IV.
`V.
`
`B.
`
`VI.
`
`Case No. 3:14-cv-03264-JD
`DEFENDANTS' JOINT “PHASE II” MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO FLEXTRONICS
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`Case 3:14-cv-03264-JD Document 1661 Filed 05/31/17 Page 3 of 28
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`TABLE OF AUTHORITIES
`
`CASES
`
`
`
`Page(s)
`
`Cedars-Sinai Med. Ctr. v. Mass. Mut. Life Ins. Co.,
`No. 94-cv-55065, 1995 WL 564757 (9th Cir. Sept. 21, 1995) ..................................................8
`
`Chubb Custom Ins. Co. v. Space Sys./Loral, Inc.,
`710 F.3d 946 (9th Cir. 2013) ...................................................................................................13
`
`Del. Valley Surgical Supply Inc. v. Johnson & Johnson,
`523 F.3d 1116 (9th Cir. 2008) .................................................................................................17
`
`F. Hoffmann-La Roche Ltd. v. Empagran S.A.,
`542 U.S. 155 (2004) ...............................................................................................5, 7, 8, 16, 17
`
`Illinois Brick Co. v. Illinois,
`431 U.S. 720 (1977) ...........................................................................................................17, 18
`
`McGlinchy v. Shell Chemical Co.,
`845 F.2d 802 (9th Cir. 1988) .....................................................................................................7
`
`Minn-Chem, Inc. v. Agrium, Inc.,
`683 F.3d 845 (7th Cir. 2012) .............................................................................................10, 11
`
`Motorola Mobility, Inc. v. AU Optronics Corp. (“Motorola IV”),
`No. 09-cv-6610, 2014 WL 258154 (N.D. Ill. Jan. 23, 2014) .....................................................7
`
`Motorola Mobility LLC v. AU Optronics Corp. (“Motorola V”),
`775 F.3d 816 (7th Cir. 2014) ...........................................................................7, 8, 9, 11, 12, 15
`
`In re Dynamic Random Access Memory (DRAM),
`546 F.3d 981 (9th Cir. 2008) ...................................................................................7, 14, 15, 16
`
`In re Lithium Ion Batteries Antitrust Litig.,
`No. 13-md-02420, 2017 WL 2021361 (N.D. Cal. May 5, 2017) ................................11, 12, 16
`
`In re TFT-LCD (Flat Panel) Antitrust Litig. (“Motorola I”),
`No. 07-cv-1827, 2010 WL 2610641 (N.D. Cal. June 28, 2010) ....................................7, 11, 16
`
`In re TFT-LCD (Flat Panel) Antitrust Litig. (“Motorola II”),
`785 F.Supp.2d 835 (N.D. Cal. 2011) .........................................................................................7
`
`In re TFT-LCD (Flat Panel) Antitrust Litig. (“Motorola III”),
`No. 07-cv-1827, 2012 WL 3276932 (N.D. Cal. Aug. 9, 2012) .................................................7
`
`Sun Microsystems Inc. v. Hynix Semiconductor Inc.,
`608 F.Supp.2d 1166 (N.D. Cal. 2009) .................................................................................8, 16
`
`ii
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`DEFENDANTS' JOINT “PHASE II” MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO FLEXTRONICS
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`Case 3:14-cv-03264-JD Document 1661 Filed 05/31/17 Page 4 of 28
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`Timberlane Lumber Co. v. Bank of America, N.T. and S.A.,
`549 F.2d 597 (9th Cir. 1976) .....................................................................................................7
`
`United States v. Hsiung,
`778 F.3d 738 (9th Cir. 2014) ...................................................................7, 9, 10, 12, 13, 14, 17
`
`STATUTES AND RULES
`
`15 U.S.C. § 6a (“FTAIA”) ..................................................................................................... passim
`
`Cal. Bus. & Prof. Code § 17200, et seq. ........................................................................................18
`
`Fed. R. Civ. P. 56(a) ....................................................................................................................1, 3
`
`OTHER AUTHORITIES
`
`H.R. Rep. 97-686 (1982)..........................................................................................................10, 11
`
`Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust
`Principles and Their Application ¶ 272i (3d. ed. 2006) ............................................................9
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`Case 3:14-cv-03264-JD Document 1661 Filed 05/31/17 Page 5 of 28
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`NOTICE OF MOTION AND MOTION
`
`PLEASE TAKE NOTICE that on September 14, 2017, at 10:00 a.m., or as soon thereafter as
`
`the matter may be heard, in Courtroom 11 of the above-referenced Court, located at 450 Golden
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`Gate Avenue, 19th Floor, San Francisco, California, the undersigned Defendants will and hereby
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`move pursuant to Rule 56 of the Federal Rules of Civil Procedure for entry of an order of partial
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`summary judgment dismissing the First and Second Claims for Relief in the Consolidated Second
`
`Amended Class Action Complaint and Complaint of Flextronics International USA, Inc.
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`(“Flextronics USA”), Dkt. No. 1355 (the “Complaint”), to the extent Flextronics USA seeks
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`recovery for:
`
` (1) direct purchases of capacitors by affiliated foreign Flextronics entities (“Foreign Flex
`Entities”1) in which the capacitors were also shipped to a Foreign Flex Entity;
`(2) capacitors exported by Defendant entities in the United States to a Foreign Flex Entity;
`
`and
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`(3) indirect purchases by Foreign Flex Entities of capacitors from foreign distributors.
`
`This Motion is based on this Notice of Motion, the accompanying Memorandum of Points
`and Authorities, the previously filed Phase I motions,2 the concurrently filed Proposed Order, the
`pleadings on file in this action, the exhibits accompanying the Declaration of Philip Van Der Weele
`
`(“Van Der Weele Decl.”) filed concurrently with this Motion, and any additional evidence and
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`argument that may be presented before or at the hearing of this Motion.
`
`MEMORANDUM OF POINTS AND AUTHORITIES
`STATEMENT OF ISSUES TO BE DECIDED
`
`I.
`
`Whether the FTAIA bars the claims of Foreign Flex Entities based on:
`
` 1 As used herein, “Foreign Flex Entity” refers to foreign subsidiaries of Flextronics USA’s parent,
`Flextronics International Limited (“Flextronics”), a Singapore corporation, or one of the foreign
`facilities used by Flextronics entities to manufacture products containing capacitors.
` 2 See Defendants’ Notice of Motion and Joint Motion for Partial Summary Judgment Dismissing
`Plaintiffs’ Sherman Act Claims for Foreign Transactions or, in the Alternative, to Simplify the Issues
`Under Fed. R. Civ. P. 16, Dkt. No. 915 (the “Phase I Motion”); Direct Purchaser Plaintiffs’ and
`Flextronics’ Opposition to Defendants’ Motion for Partial Summary Judgment Dismissing Plaintiffs’
`Sherman Act Claims for Foreign Transactions, Dkt. No. 967-5 (the “Phase I Response”); and
`Defendants’ Reply to Plaintiffs’ Opposition to Defendants’ Motion for Partial Summary Judgment
`Dismissing Plaintiffs’ Sherman Act Claims for Foreign Transactions or, in the Alternative, to
`Simplify the Issues Under Fed. R. Civ. P. 16, Dkt. No. 985 (the “Phase I Reply”).
`
`1
`Case No. 3:14-cv-03264-JD
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`Case 3:14-cv-03264-JD Document 1661 Filed 05/31/17 Page 6 of 28
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`(i) Capacitors sold and shipped by a foreign Defendant directly to a Foreign Flex Entity
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`and incorporated by a Flex Foreign Entity into finished goods that were sold outside
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`the United States;
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`(ii) Capacitors sold and shipped by a foreign Defendant directly to a Foreign Flex Entity
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`and incorporated by a Foreign Flex Entity into finished goods that were sold into the
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`United States;
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`(iii) Capacitors sold by a Defendant entity in the United States directly to a Foreign Flex
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`Entity; and
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`(iv) Capacitors sold by a foreign Defendant directly to a foreign distributor, who then
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`resold them to an indirect purchasing Foreign Flex Entity.
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`II.
`
`INTRODUCTION
`Defendants make this second summary judgment motion under the Foreign Trade Antitrust
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`Improvement Act (“FTAIA”), 15 U.S.C. § 6a, pursuant to this Court’s instruction to file “Phase II
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`summary judgment motions consistent with the legal holdings in this [Phase I] order.” Dkt No.
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`1302, at 14:13-14 (September 30, 2016) (“Phase I Order”). In this Phase II Motion, Defendants seek
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`partial summary judgment excluding from this case the four categories of purchases by Foreign Flex
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`Entities identified above.
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`A. Direct Purchaser Claims
`Based on the Phase I Order, two categories of direct purchases by Flextronics entities are
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`already in the case and hence not covered by this Motion: (1) purchases made by a United States-
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`based Flextronics entity, such as Flextronics USA; and (2) purchases made by a Foreign Flex Entity
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`where the capacitors were delivered by a Defendant to a Flextronics facility in the United States.
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`See Phase I Order, at 5-8. The only direct purchases of capacitors that are the subject of this Motion
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`are those that were sold and delivered to a Foreign Flex Entity.
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`The Court reserved for Phase II consideration those capacitors that were sold and delivered to
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`a purchaser outside the United States, as well as such capacitors that were incorporated into finished
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`products that were then sold in the United States. Id. at 11-12. As demonstrated below, these direct
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`purchases of capacitors by Foreign Flex Entities are excluded from the reach of the Sherman Act and
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`Case 3:14-cv-03264-JD Document 1661 Filed 05/31/17 Page 7 of 28
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`California state law under the FTAIA because they are not “import commerce” and otherwise do not
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`meet the “domestic injury exception” of the FTAIA.
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`B. Indirect Purchaser Claims
`In its Phase I Order, the Court also deferred resolution of any indirect purchaser claims until
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`the parties filed supplemental briefs addressing the application of the FTAIA to indirect purchaser
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`claims on a state-by-state basis. See Phase I Order, at 14:6-7. The parties to this Motion agree that
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`Flextronics USA’s indirect purchaser claim as an assignee from Foreign Flex Entities that purchased
`capacitors from foreign distributors is ripe for a summary judgment motion.3
`Resolution of this indirect purchaser claim is straightforward. The FTAIA excludes such
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`indirectly purchased capacitors by Foreign Flex Entities for the same reasons that it excludes the
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`direct purchases covered by this Motion. The Court has already rejected Flextronics USA’s
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`argument that California state law, or any state’s law, extends its reach beyond the FTAIA. Id. at 13.
`III.
`
`STATEMENT OF FACTS
`This Motion may be decided as a matter of law pursuant to Rule 56(a)4, based upon the
`following material facts that cannot be genuinely disputed.
`A.
`The Parties and Foreign Flex Entities
`Defendants5 are primarily foreign6 manufacturers of capacitors that, together with certain of
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` 3 The moving parties and Flextronics USA have agreed to defer briefing on the indirect purchaser
`claims of Flextronics USA in its own capacity, as opposed to as an assignee of the Foreign Flex
`Entities—that is, claims relating to Flextronics USA’s own purchases of capacitors from foreign
`distributors—pending the Court’s further resolution of IPPs’ FTAIA issues. See Transcript of
`Proceedings, In re Capacitors Antitrust Litigation, Case No. 3:14-cv-03264 (N.D. Cal. April 27,
`2017), at 27:14–28:20 [attached as Ex. 1 to Van Der Weele Decl.].
` 4 The applicable summary judgment standard is set forth in Defendants’ Phase I Motion, at 8-9.
` 5 The defendants named by Flextronics USA are KEMET Corporation; KEMET Electronics
`Corporation; Nippon Chemi-Con Corporation; United Chemi-Con, Inc.; Hitachi Chemical Co., Ltd.;
`Hitachi AIC Inc.; Hitachi Chemical Co. America, Ltd.; Fujitsu Ltd.; Nichicon Corporation; Nichicon
`(America) Corporation; AVX Corporation; Rubycon Corporation; Rubycon America Inc.; ELNA
`Co., Ltd.; ELNA America Inc.; Matsuo Electric Co., Ltd.; TOSHIN KOGYO Co., Ltd.; Holy Stone
`Enterprise Co., Ltd.; Milestone Global Technology, Inc. (d/b/a HolyStone International); ROHM
`Co., Ltd.; ROHM Semiconductor U.S.A., LLC; Okaya Electric Industries Co., Ltd.; Okaya Electric
`America Inc.; Taitsu Corporation; Taitsu America, Inc.; Shinyei Kaisha; Shinyei Technology Co.,
`Ltd.; Shinyei Capacitor Co., Ltd.; Shinyei Corporation of America, Inc.; Nitsuko Electronics
`Corporation; Nissei Electric Co., Ltd.; Soshin Electric Co., Ltd.; Soshin Electronics of America,
`Inc.; Shizuki Electric Co., Ltd.; and American Shizuki Corporation. See Compl. ¶ 101.
` 6 Four Defendants, AVX , KEMET, American Shizuki Corporation, and United Chemi-Con, Inc.,
`have manufacturing operations in the United States and sell capacitors to customers both outside and
`inside the United States. Thus, while references herein to the foreign manufacture of capacitors
`3
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`their U.S. subsidiaries and affiliates, sell capacitors. See Compl. ¶¶ 32-101.
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`Plaintiff Flextronics USA is a manufacturer of electronic products based in California.
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`Compl. ¶ 31. Flextronics USA is a wholly-owned subsidiary of Flextronics International Ltd.,
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`headquartered in Singapore. See Declaration of Mark Trutna in Support of [Flextronics USA’s]
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`Response to Defendants’ Motion for Partial Summary Judgment (“Trutna Decl.”), Dkt. No. 966-18,
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`at ¶ 1. The Flextronics family of companies, under the umbrella of the Singapore parent company
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`(“Flextronics”), “is one of the world’s largest providers of global supply chain solutions, with
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`revenues of $26.1 billion in fiscal year 2015. Flextronics relies on an extensive network of
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`manufacturing facilities in the world’s major consumer electronics and industrial markets (Asia, the
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`Americas, and Europe) in order to serve the growing outsourcing needs of both multinational and
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`regional OEMs.” Id. at ¶ 4. The Singapore parent company has over 100 subsidiaries located in
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`approximately 30 countries across four continents. Id.
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`Interrog. (1) and (2), dated Sept. 28, 2015 (“Flextronics USA’s Suppl. Interrog. Resp.”), at 4,
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` See Flex Suppl. Interrog. Resp. to Def. First Set of
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`[attached as Ex. 3 to Van Der Weele Decl.].
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`The capacitors that Flextronics USA itself purchased are not the subject of this Phase II
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`Motion. However, Flextronics USA is also asserting the claims of its foreign affiliates through
`assignments executed by its foreign affiliates.7 It is these assigned claims of the Foreign Flex
`Entities that are the subject of this Motion. Id.; Flex Initial and Prelim. Obj. and Resps. To Defs.’
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`First Set of Interrog. Numbered (1) & (2), dated Sept. 3, 2015 (“Flex Initial Interrog. Resp.”), at 5
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`[attached as Ex. 4 to Van Der Weele Decl.].
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`B.
`The Purchases of Capacitors by Foreign Flex Entities
`The capacitor sales at issue under the assigned claims are those that are sold and shipped to
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`followed by foreign-to-foreign sales do not include such domestic manufacturing operations, all
`legal arguments nevertheless apply to foreign sales made by these U.S. entities because the FTAIA
`excludes not only foreign-to-foreign purchases, but also US-to-foreign purchases—i.e., exports, as
`further explained below.
` 7 Flextronics provided a list of Foreign Flex Entities that have assigned their purported claims to
`Flextronics USA as Exhibit 1 to Flextronics USA’s Suppl. Interrog. Resp. [attached as Ex. 3 to Van
`Der Weele Decl.].
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`Case No. 3:14-cv-03264-JD
`DEFENDANTS' JOINT “PHASE II” MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO FLEXTRONICS
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`Foreign Flex Entities outside the United States, whether by foreign Defendants or as exports by
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`domestic Defendants.
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`
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` Deposition of Mark Trutna, President of Flextronics USA, at
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`198:8–199:18, 230:6-11, May 2, 2017 [attached as Ex. 2 to Van Der Weele Decl.] (“Trutna Dep.”).
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`These capacitors are also shipped to a Foreign Flex Entity. Purchase order data provided by
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` of the capacitors
`Flextronics establishes that, during the relevant time period approximately
`purchased by Flextronics were purchased by and delivered to Foreign Flex Entities.8
`C.
`Finished Goods Containing Capacitors Sold by Foreign Flex Entities
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`The Foreign Flex Entities incorporated the capacitors they purchased into finished products,
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`which they then sold to customers around the world. Trutna Decl., at ¶ 17. A portion of such sales
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`of finished goods were made by Foreign Flex Entities to their customers located in the United States.
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`Id. The parties have stipulated that, during the period 2001-2015, the aggregate cost of Capacitors to
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`Flextronics as a percentage of the aggregate cost of all materials purchased by Flextronics for
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`finished goods containing capacitors was
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`. See Stipulated Fact for Purposes of the Phase 2
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`FTAIA Summary Judgment Briefing as to Flex. Int’l USA, Inc. Regarding the Cost of Capacitors
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`Purchased by Flextronics Compared to the Cost of Finished Goods Into Which the Capacitors Were
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`Incorporated, dated May 16, 2017 (“Cost Stipulation”) [attached as Ex. 5 to Van Der Weele Decl.].
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`IV.
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`LEGAL STANDARDS
`The FTAIA was intended to clarify and limit the extent to which U.S. antitrust laws apply to
`allegedly anticompetitive export and overseas conduct.9 The FTAIA amends the Sherman Act by
`“placing all (nonimport) activity involving foreign commerce outside the Sherman Act’s reach. It
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`then brings such conduct back within the Sherman Act’s reach provided that the conduct both (1)
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`sufficiently affects American commerce . . . and (2) has an effect of a kind that antitrust law
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`considers harmful . . . .” F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 162 (2004)
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` 8 FL_00000245958-A, 5958-B, 5959, and 5960 are massive Excel spreadsheets containing
`Flextronics’s purchase data for 2001 through 2015. They are far too voluminous to append to this
`brief. Defendants will provide a disc containing this data if the Court wishes.
` 9 For a detailed summary and discussion of the statutory language and intent of the FTAIA, which
`remains applicable to Flextronics USA’s claims in this Phase II Motion, see Defendants’ Phase I
`Motion, at 11-14.
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`Case 3:14-cv-03264-JD Document 1661 Filed 05/31/17 Page 10 of 28
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`(emphasis in original). Thus, as a threshold consideration, in order for the FTAIA to be triggered,
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`the trade or commerce involved must not be imports into the United States. This threshold
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`consideration is referred to as the “import commerce exclusion” from the FTAIA.
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`Assuming that import commerce is not involved, the FTAIA then places foreign
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`transactions—such as the ones that are the subject of this Motion—outside of the reach of the
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`Sherman Act, unless an exception, hereafter referred to as the “Domestic Injury Exception,” applies.
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`The Domestic Injury Exception has two elements. The first element requires that conduct involving
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`foreign commerce have a “direct, substantial, and reasonably foreseeable effect” on domestic
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`commerce. 15 U.S.C. § 6a(1). This element is referred to herein as the “domestic effect”
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`requirement. The second element requires that the domestic effect “gives rise to a claim under the
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`provisions of [the Sherman Act],” 15 U.S.C. § 6a(2), referred to as the “proximate cause” element.
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`See Phase I Order, at 8-11.
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`V.
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`ARGUMENT
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`By simply purporting to execute a number of assignments from nearly 100 foreign
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`Flextronics subsidiaries located in 30 countries, Flextronics USA is attempting to extend the reach of
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`the Sherman Act and California state law to the entirety of Flextronics’s global purchases of
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`capacitors, regardless of where those capacitors, or any finished goods containing them, were
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`bought, delivered, or sold, and despite the lack of proof of any domestic effects of the alleged
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`conspiracy giving rise to the claimed foreign injuries. According to Flextronics USA—the nominal
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`plaintiff asserting Flextronics’s claims—it is immaterial whether those capacitors were sold inside or
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`outside of the United States, whether they were exported from the U.S. or not, whether they were
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`sold by a foreign or domestic affiliate of a Defendant, whether they were billed or shipped to a
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`location in the United States, or whether they were incorporated into a product sold inside or outside
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`the United States. Flextronics USA claims that all of Flextronics’s global capacitor purchases from
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`Defendants are subject to the Sherman Act and California state law. Flextronics USA’s extreme
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`position ignores its burden to prove domestic effects of the alleged conspiracy that gave rise to the
`claimed injuries essentially reduces the FTAIA to an easily avoided nullity10 and, not surprisingly,
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`finds no support in the statute itself or applicable case law.
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`In analyzing extraterritorial antitrust claims like those asserted by Flextronics USA, courts
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`not only evaluate whether they satisfy the statutory elements of the FTAIA butalso assess factors o
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`international comity'' and the prevention of forum-shopping abuses by opportunistic plaintiffs. As
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`the Supreme Court noted, the FTAIA was enacted to reduce the “serious risk of interference with a
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`foreign nation’s ability independently to regulate its own commercialaffairs.” Empagran, 542 U.S.
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`at 165. As the Ninth Circuit has observed, claims like those Flextronics USAis asserting on behal
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`of its foreign affiliates that made their purchases entirely outside the United States are “not of the
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`type that Congress intended to bring within the Sherman Act’s reach when it enacted the FTAIA,”
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`and such plaintiffs have “recourse under [their] own .
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`.
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`. antitrust laws.” Jn re Dynamic Random
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`Access Memory (DRAM), 546 F.3d 981, 989 (9th Cir. 2008). To permit Flextronics USAto stand in
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`“the place of its foreign companies and sue on their behalf under U.S. antitrust law would be an
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`unjustified interference with the right of foreign nations to regulate their own economies.” Motorola
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`Mobility LLC v. AU Optronics Corp., 775 F.3d 816, 824 (7th Cir. 2014) (hereinafter “Motorola V’)
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`; see also Empagran, 542 U.S. at 165-66 (U.S. law is intended “to redress domestic antitrust
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`DEFENDANTS' JOINT “PHASEIT” MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO FLEXTRONICS
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`un The Ninth Circuit has long recognized the importance ofweighing “whetherthe interests of, and
`links to, the United States including the magnitude of the effect on American foreign commerce are
`sufficiently strong, vis-a-vis those of other nations,
`to justify an assertion of extraterritorial
`authority” and instructed courts considering the extraterritorial reach of U.S. antitrust laws to take
`into consideration,
`inter alia, “[a]s a matter of international comity and fairness, should the
`extraterritorial jurisdiction of the United States be asserted to cover it?” Timberlane Lumber Co.v.
`Bank ofAmerica, N.T. and S.A., 549 F.2d 597, 613-15 (9th Cir. 1976) (superseded by the FTAIA as
`recognized by McGlinchy v. Shell Chemical Co., 845 F.2d 802, 813 n.8 (9th Cir. 1988)).
`” Motorola Mobility LLC v. AU Optronics Corp., 775 F.3d 816 (7th Cir. 2015) is referred to as
`Motorola V becauseit is preceded by three decisions in the Northern District of California
`adjudicated in coordinated pre-trial proceedings pursuant to the Multidistrict Litigation statute, 28
`U.S.C. § 1407, and several decisions in the Northern District of Illinois and the Seventh Circuit after
`the action was remandedto its original forum. Those decisions are Jn re TFT-LCD (Flat Panel)
`Antitrust Litig., No. 07-cv-1827, 2010 WL 2610641 (N.D.Cal. June 28, 2010) (“Motorola I’); In re
`TFT-LCD (Flat Panel) Antitrust Litig., 785 F.Supp.2d 835 (N.D. Cal. 2011) (“Motorola IT’); In re
`TFT-LCD (Flat Panel) Antitrust Litig., No. 07-cv-1827, 2012 WL 3276932 (N.D. Cal. Aug. 9, 2012)
`(“Motorola IIT’); and Motorola Mobility, Inc. v. AU Optronics Corp., No. 09-cv-6610, 2014 WL
`258154 (N.D.Ill. Jan. 23, 2014) (“Motorola IV”). Motorola V, cited with approval by the Ninth
`Circuit in United States v. Hui Hsiung, 778 F.3d 738, 751-753 (9th Cir. 2015), cert. denied, 135 S.
`Ct. 2837 (June 15, 2015), effectively overruled Motorola III insofar as pertinent to the issues here.
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`injury,” and when a plaintiff’s claims arise from “foreign harm,” “the justification for that
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`interference seems insubstantial.”) (emphasis in original).
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`Further, by pursuing its assigned antitrust claims in the United States rather than in the
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`countries in which the Flex Foreign Entities are incorporated, located, and conduct business,
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`Flextronics is effectively forum-shopping, wedging claims into this litigation which Congress
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`determined are more efficiently pursued in other jurisdictions. Motorola V, 775 F.3d at 821
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`(“Should some foreign country in which one of its subsidiaries operates have stronger antitrust
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`remedies than the United States does, Motorola would tell that subsidiary to sue under the antitrust
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`law of that country.”). Having “availed itself of the advantages of the parent subsidiary relationship
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`under corporate law,” Flextronics “cannot now easily disavow itself of such to suit its [own]
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`purposes.” Sun Microsystems Inc. v. Hynix Semiconductor Inc., 608 F.Supp.2d 1166, 1189 (N.D.
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`Cal. 2009). Flextronics’s alleged injuries arise from goods that the Flex Foreign Entities purchased
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`in foreign countries for use at foreign factories; Flextronics must seek redress for these foreign
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`injuries