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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`In re: Refrigerant Compressors
`Antitrust Litigation
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`___________________________/
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`Case No. 2:09-md-02042
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`Honorable Sean F. Cox
`United States District Court
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`OPINION & ORDER
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`The Indirect Purchaser and Direct Purchaser putative class action cases in this
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`multidistrict litigation (“MDL”) proceeding have been resolved. All that remains in this MDL
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`proceeding is Plaintiff General Electric Company’s (“GE”) individual claims. GE asserts claims
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`against Defendants Danfoss A/S, Danfoss Flensburg GmbH, and Danfoss, LLC (collectively the
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`“Danfoss Defendants”). GE is pursuing its claims against the Danfoss Defendants on its own
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`behalf after having opted out of the Direct Purchaser Class Action Settlement.1
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`The matter is currently before the Court on a “Motion By Defendants Danfoss Flensburg
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`GMBH And Danfoss LLC To Dismiss The Complaint” (Docket Entry No. 470/64) which asserts
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`several grounds for relief. The parties have briefed the issues. The Court finds that oral
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`argument would not aid the decisional process at this time.
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`For the reasons set forth below, with respect to GE’s federal antitrust conspiracy claims,
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`the Court: 1) declines to rule on two issues (whether GE has federal antitrust standing to assert
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`claims based on MABE purchases and whether those purchases are barred under the Foreign
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`1GE asserted claims against the Whirlpool Defendants but those claims have been settled.
`GE also asserts claims against the ACC Defendants and GE has a default judgment as to liability
`against ACC.
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`1
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`Trade Antitrust Improvement Act) until after the parties have had the opportunity to file
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`supplemental briefs addressing the Seventh Circuit’s recent decision in Motorola Mobility LLC
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`v. AU Optronics Corp., 775 F.3d 816 (7th Cir. Jan. 12, 2015); 2) rules that GE is not entitled to
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`tolling under the “American Pipe tolling doctrine;” 3) rules that GE is entitled to Section 5(i)
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`tolling; 4) rejects Defendants’ argument that GE cannot pursue damages for the time period after
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`February 2009; and 5) rules that GE has sufficiently alleged fraudulent concealment for the time
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`period preceding September 2006.
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`With respect to GE’s state-law fraud and conspiracy claims, the Court: 1) rules that GE’s
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`state-law fraud claim is barred by the applicable statute of limitation; and 2) rejects Defendants’
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`statute of limitations challenge to the state-law conspiracy count.
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`Finally, the Court finds Defendant Danfoss Flensburg GmbH’s personal jurisdiction
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`challenge without merit.
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`BACKGROUND
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`There is a lengthy history to this MDL proceeding. The Court includes here only those
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`facts that are relevant for the purposes of the pending motion.
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`GE filed its Complaint on February 15, 2013, in the United States District Court for the
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`Western District of Kentucky, Louisville Division. The action was transferred to this Court by a
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`June 17, 2013 Order of the United States Judicial Panel on Multidistrict Litigation, which
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`transferred the action to this Court for inclusion in the coordinated or consolidated pretrial
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`proceedings in this MDL proceeding, which began in 2009.
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`GE’s eighty-three page Complaint asserts claims against three different groups of
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`Defendants: 1) the “Embraco Defendants,” which include Whirlpool Corporation, Whirlpool
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`S.A., and Embraco North America, Inc.; 2) the “Danfoss Defendants,” which include Danfoss
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`A/S, Danfoss Flensburg GMBH, and Danfoss, LLC; and 3) the “ACC Defendants,” which
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`include Household Compressors Holding SpA, and ACC USA, LLC. GE’s Complaint
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`summarizes the nature of the action as follows:
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`1.
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`2.
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`3.
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`This lawsuit arises from a long-standing cartel created, maintained, and
`enforced by the Defendants and their co-conspirators (collectively, the
`“Conspirators”) for anticompetitive acts and behavior. They have agreed
`to, and in fact did, illegally inflate, raise, fix, and artificially stabilize the
`price of refrigerant compressors sold in the United States and elsewhere
`in the world. The Defendants also have agreed to, and in fact did
`illegally, restrict capacity, restrict innovation, stabilize market
`shares, allocate customers, territories, and product types, and
`otherwise restrain competition in the manufacture and sale of
`refrigerant compressors in the United States and elsewhere in the
`world. The result of the Conspirators’ conduct has been to
`raise the prices paid by their customers, including Plaintiff, to
`supra-competitive levels, reducing the attractiveness of their
`customers’ products in terms of price and quality, and thereby
`damaging their customers’ businesses. The cartel started at least as
`early as January 1, 1996 and the cartel and its effects will continue
`at least into 2013 (the “conspiracy period”). The exact dates of the
`conspiracy period are not known to Plaintiff, but are likely to be
`revealed during the course of discovery in this litigation.
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`A refrigerant compressor, in the context of this case, is a device that
`compresses a refrigerant gas. When the gas is later permitted to expand, it
`absorbs and thereby transfers heat, producing a cooling effect used in a
`wide variety of refrigeration products. For example, refrigerant
`compressors are used in household refrigerators, in which the compressors
`are part of the system that creates cold air that keeps food fresh or frozen.
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`During the conspiracy period, Defendants and their co-conspirators
`Tecumseh and Panasonic have dominated the global and U.S. markets for
`refrigerant compressors. Indeed, the three largest suppliers to the U.S.
`market – Embraco, Panasonic, and Tecumseh – had as of 2008
`a collective market share in the United States of approximately 85%.
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`4.
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`Plaintiff General Electric Company is one of the largest manufacturers and
`sellers of refrigeration equipment in the United States. As such, it is one of
`the largest purchasers of refrigerant compressors in the United States.
`Plaintiff General Electric Company has been a target and a victim of the
`Conspirators’ cartel. In particular, Plaintiff is one of the largest
`manufacturers of household refrigerators in the United States and globally,
`and throughout the conspiracy period, household refrigerators
`manufactured and/or sold by Plaintiff have included refrigerant
`compressors supplied by Conspirators. As a result of the cartel, Plaintiff
`has paid supra-competitive prices for compressors and has been deprived
`of innovation that would have resulted in increased efficiency, as well as
`increased sales and profits, in its sales of refrigerators and other
`refrigeration equipment.
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`(Compl. at 1-2).
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`GE’s Complaint alleges a longer conspiracy period than did the Direct Purchaser or the
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`Indirect Purchaser Plaintiffs – one that begins in 1996.
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`GE’s Complaint asserts three causes of action: 1) “Violation of Section 1 of the Sherman
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`Act, 15 U.S.C. § 1,” its First Cause of Action; 2) “Fraud,” its Second Cause of Action; and 3)
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`“Conspiracy,” its Third Cause of Action.
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`GE’s Complaint contains allegations regarding “MABE purchases” that are relevant to
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`issues in the motion. GE’s Complaint alleges that, throughout the conspiracy period, “GE has
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`been a minority owner of a joint venture named Controladora Mabe, S.A. de C.V. (‘MABE’).”
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`(Compl. at ¶ 46). GE alleges that “[d]uring the conspiracy period (and today), GE has owned
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`(and today owns) slightly more than 48% interest in MABE. GE also has minority
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`representation on MABE’s board of directors, and a veto right with respect to some” unspecified
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`“categories of board decisions.” (Id.).
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`GE alleges that as part of its joint venture relationship with GE, during the conspiracy
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`period MABE has manufactured residential refrigerators for GE for sale in the United States
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`pursuant to contract manufacturing agreements between GE and Mabe.” (Compl. at ¶ 47).
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`It also alleges that GE’s procurement teams in the United States have controlled and determined
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`the price and quantity of refrigerant compressors MABE has incorporated into refrigerators it has
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`manufactured for sale by GE in the United States.
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`STANDARD OF DECISION
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`When ruling on a motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6), the court must
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`construe the complaint in a light most favorable to the plaintiff and accept all the well-pleaded
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`factual allegations as true. Evans-Marshall v. Board of Educ., 428 F.3d 223, 228 (6th Cir. 2005).
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`However, “the tenet that a court must accept as true all of the allegations contained in a
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`complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, __ U.S. __, 129 S.Ct. 1937,
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`1948 (2009). Although a heightened fact pleading of specifics is not required, the plaintiff must
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`bring forth “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
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`Twombly, 550 U.S. 544, 570 (2007).
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`In determining whether to grant a Rule 12(b)(6) motion, the court primarily considers the
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`allegations in the complaint, although matters of public record, orders, items appearing in the
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`record of the case and exhibits attached to the complaint may also be taken into account. Amini
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`v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001) (citing Nieman v. NLO, Inc., 108 F.3d
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`1546, 1554 (6th Cir. 1997)).
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`ANALYSIS
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`The Motion to Dismiss filed by Danfoss Flensburg and Danfoss LLC contains several
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`challenges to GE’s Complaint.
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`I.
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`Challenges To GE’s Ability To Assert Claims for Mabe’s Compressor Purchases
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`During the course of briefing the pending motion, Defendants raised the issue of
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`whether GE has federal antitrust standing to assert claims based on MABE purchases and
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`whether those purchases are barred under the Foreign Trade Antitrust Improvement Act, 15
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`U.S.C. § 6(a) (the “FTAIA”).
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`After the primary briefs had been filed, both parties continued to seek leave to file
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`additional briefs, which were based on Motorola Mobility, Inc. v. AU Optronics Corp, 2014 WL
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`258154 (N.D. Ill. Jan. 23, 2014) and developments relating to it.
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`As the parties noted in their briefs, Motorola filed a petition for interlocutory appeal,
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`pursuant to 28 U.S.C. § 1292(b), from the district court’s order. The United States Court of
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`Appeals for the Seventh Circuit granted the petition for interlocutory appeal. In a decision
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`issued on March 27, 2014, without holding oral argument, a three-judge panel of the Seventh
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`Circuit affirmed the district court’s order. But in a subsequent order, the Panel stated that it had
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`decided to rehear the appeal and vacated its prior opinion. The Panel took that action after
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`having received an amicus curiae brief from the United States, filed jointly by the Federal Trade
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`Commission and the Departments of State, Commerce and Justice. The Seventh Circuit recently
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`issued its amended decision in that case. Motorola Mobility LLC v. AU Optronics Corp., 775
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`F.3d 816 (7th Cir. Jan. 12, 2015).
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`Given the numerous briefs filed by the parties devoted to the Motorola decision, and its
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`recent developments, this Court declines to rule on the these two issues (whether GE has federal
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`antitrust standing to assert claims based on MABE purchases and whether those purchases are
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`barred under the FTAIA) until after both parties have had an opportunity to file a supplemental
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`brief addressing Motorola Mobility LLC v. AU Optronics Corp., 775 F.3d 816 (7th Cir. Jan. 12,
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`2015). Defendants shall file a supplemental brief, of no more than eight (8) pages, addressing
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`the above issues and case, no later than April 3, 2015; and 2) GE shall file a supplemental brief,
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`of no more than eight (8) pages, addressing the above issues and case, no later than April 3,
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`2015.
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`II.
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`Are GE’s Antitrust Claims Barred By The Statute of Limitations?
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`Pursuant to the Clayton Act, 15 U.S.C. § 15(a), private parties may bring private actions
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`for violation of the Sherman Act. Static Control Components, Inc. v. Lexmark Intern., Inc., 697
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`F.3d 387, 401 (6th Cir. 2012). The controlling section of the statute provides that “[a]ny action
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`to enforce any cause of action under section 15, 15a, or 15c of this title shall be forever barred
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`unless commenced within four years after the cause of action accrued.” 15 U.S.C. § 15b.
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`GE filed this action on February 15, 2013. The parties agree that, without tolling, GE’s
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`Sherman Act claims may reach back to February 15, 2009. (See Defs.’ Br. at 7; Pl.’s Br. at 6).
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`The pending motion addresses whether various types of tolling may be applied to extend GE’s
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`antitrust claims.
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`A.
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`Does American Pipe Toll The Statute Of Limitations For GE’s Antitrust
`Claims?
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`The first putative class action brought on behalf of direct purchasers, which was later
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`transferred to this Court, was filed on February 25, 2009. GE filed its own action on February
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`15, 2013. GE’s action was filed after the putative class actions were filed and transferred to this
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`Court in this MDL proceeding, but before the motion seeking approval of the Direct Purchaser
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`class action settlement had been filed or granted. This Court preliminarily approved the Direct
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`Purchaser settlement class on January 9, 2014, and granted final approval on June 16, 2014.
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`(Docket Entry Nos. 460 & 495).
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`In their motion, Defendants contend that the American Pipe2 tolling doctrine does not toll
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`the statute of limitations for GE’s antitrust claims in its independent action that was filed on
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`February 15, 2013.
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`Under the American Pipe tolling doctrine, “the commencement of a class action suspends
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`the applicable statute of limitations as to all asserted members of the class who would have been
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`parties had the suit been permitted to continue as a class action.” American Pipe, 414 U.S. at
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`554. As explained by one of the leading treatises on class actions:
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`In American Pipe and Crown, Cork, the Supreme Court addressed the
`statute of limitations as it applied to putative class members who pressed their
`claims after the district court ruled on class certification. However, the Supreme
`Court has never addressed the question of whether the American Pipe doctrine
`inures to the benefit of plaintiffs who choose to bring individual actions in the
`time period that begins at the filing of the class action complaint and ends when
`the trial court denies class certification.
`The lower courts conventionally held that, given the policy rationales that
`underlie it, American Pipe does not apply to putative class members who
`commence individual actions before the district court rules on class certification.
`This approach is known as the “forfeiture rule” as these courts hold that the
`plaintiff who files in this precertification decision period has “forfeited” her
`opportunity to rely on American Pipe. Why? First, when a plaintiff files his own
`lawsuit, he “affiirmatively demonstrate[s] his choice not to rely on the class
`action mechanism.” Second, the early-filing plaintiff “create[s] the very
`inefficiency that American Pipe sought to prevent – he generate[s] more litigation
`and expense concerning the same issues that were litigated by a class of which he
`was a member.
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`NEWBERG ON CLASS ACTIONS §9:63 (5th Ed.) (emphasis in original) (citations omitted).
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`“Despite the rationale for the forfeiture rule, courts have not universally adopted it.
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`2American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554 (1974).
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`Creating the ‘non-forfeiture rule,’ a number of courts have held that American Pipe does, in fact,
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`apply to putative class members who commence individual actions before the district court rules
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`on class certification.” Id. (citing several cases, including In re Hanford Nuclear Reservation
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`Litig., 534 F.3d 986, 1009 (9th Cir. 2008) and State Farm Mut. Auto. Ins. Co. v. Boellstorff, 540
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`F.3d 1223, 1232 (10th Cir. 2008)).
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`In opposing Defendants’ motion, GE relies on In re Hanford Nuclear Reservation Litig.
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`and State Farm Mut. Auto. Ins. Co. v. Boellstorff and asserts that, if presented with this issue,
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`the Sixth Circuit would follow those decisions and hold that class-action tolling applies to an
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`individual suit filed before class certification. (Pl.’s Br. at 18).
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`Defendants, however, direct the Court to two Sixth Circuit cases that shed light on how
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`the Sixth Circuit might rule on this issue: 1) Wyser-Pratte Mgmt. Co. v. Telxon Corp., 413 F.3d
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`553 (6th Cir. 2005); and 2) In re Vertrue Inc. Mktg. & Sales Practice Litig., 719 F.3d 474 (6th
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`Cir. 2013).
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`In Wyser-Pratte Mgmt. Co., the Sixth Circuit agreed with those courts that have
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`concluded that class-action tolling applies only after a ruling on class certification:
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`While our research reveals no circuit court decisions addressing this “forfeiture”
`argument, a number of district courts have held that a plaintiff who chooses to file
`an independent action without waiting for a determination on the class
`certification issue may not rely on the American Pipe tolling doctrine. The
`reasoning rests in part on the holding in Crown that “[o]nce the statute of
`limitations has been tolled, it remains tolled for all members of the putative class
`until class certification is denied. At that point, class members may choose to file
`their own suits or to intervene as plaintiffs in the pending action.” 462 U.S. at
`354, 103 S.Ct. 2392. The purposes of American Pipe tolling are not furthered
`when plaintiffs file independent actions before decision on the issue of class
`certification, but are when plaintiffs delay until the certification issue has been
`decided. One district court explained:
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`Many good purposes are served by such forbearance, as American
`Pipe and Crown, Cork themselves spell out. The parties and courts
`will not be burdened by separate lawsuits which, in any event, may
`evaporate once a class has been certified. At the point in a
`litigation when a decision on class certification is made, investors
`usually are in a far better position to evaluate whether they wish to
`proceed with their own lawsuit, or to join a class, if one has been
`certified.
`
`In re WorldCom, Inc. Sec. Litig., 294 F.Supp.2d 431, 452 (S.D.N.Y.2003) (citing
`cases), reconsid. denied, 308 F.Supp.2d 214, 230 (S.D.N.Y.2004). As is
`exemplified by In re Worldcom, this limitation on class action tolling has taken
`hold in a number of district courts, with no courts rejecting it, and is not a new
`proposition. See, e.g., In re Ciprofloxacin Hydrochloride Antitrust Litig., 261
`F.Supp.2d 188, 221 (E.D.N.Y.2003); Rahr v. Grant Thornton LLP, 142 F.Supp.2d
`793, 800 (N.D.Tex.2000); Stutz v. Minn. Mining & Mfg. Co., 947 F.Supp. 399,
`404 (S.D.Ind.1996); Wachovia Bank & Trust Co. v. Nat’l Student Mktg. Corp.,
`461 F.Supp. 999, 1012 (D.D.C.1978). The reasoning supporting this approach
`is both sound and persuasive. Even if the limitations period did not commence
`until July or August 1999, we find in the alternative that WPMC may not rely on
`the PwC class action to suspend the limitations period on its fraud claims against
`PwC.
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`Wyser-Pratte Mgmt. Co., 413 F.3d at 568-69 (emphasis added); see also In re Vertrue Inc. Mktg.
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`& Sales Practice Litig., 719 F.3d at 480 (noting that in Wyser-Pratte Mgmt. Co., “we held that ‘a
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`plaintiff who chooses to file an independent action without waiting for a determination on the
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`class certification issue may not rely on the American Pipe tolling doctrine.’”)
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`GE attempts to minimize the decision in Wyser-Pratte Mgmt. Co. because one of the
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`district court decisions the Sixth Circuit relied on, In re WorldCom, Inc. Sec. Litig., was later
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`reversed by the Second Circuit. But that was not the only decision that the court relied on and,
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`more importantly, regardless of what the Second Circuit later decided, the Sixth Circuit found
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`that the “reasoning supporting this approach” to be “both sound and persuasive.” Wyser-Pratte
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`Mgmt. Co., 413 F.3d at 569.
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`This Court concludes that GE is not entitled to tolling under the American Pipe tolling
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`doctrine because GE filed its own action after the putative Direct Purchaser actions were filed
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`but before there was any determination as to class action in this MDL proceeding.
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`B.
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`Does Section 5(i) Tolling Apply?
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`GE also contends that Section 5(i) of the Clayton Act extends GE’s damages period back
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`to September 2006. (Pl.’s Br. at 16).
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`The section at issue, Section 5(i) of the Clayton Act, governs “suspension of limitations”
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`and provides as follows:
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`(i) Suspension of limitations
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`Whenever any civil or criminal proceeding is instituted by the United States to
`prevent, restrain, or punish violations of any of the antitrust laws, but not
`including an action under section 15a of this title, the running of the statute of
`limitations in respect to every private or State right of action arising under said
`laws and based in whole or in part on any matter complained of in said
`proceeding shall be suspended during the pendency thereof and for one year
`thereafter: Provided, however, That whenever the running of the statute of
`limitations in respect of a cause of action arising under section 15 or 15c of this
`title is suspended hereunder, any action to enforce such cause of action shall be
`forever barred unless commenced either within the period of suspension or within
`four years after the cause of action accrued.
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`15 U.S.C. § 16(i) (italics in original; bolding added for emphasis). As concisely explained by the
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`district court in In re Microsoft Corp. Antitrust Litig., Inc., 2005 WL 1398643 (D. Md. 2005):
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`The broad principles governing the tolling issue may be briefly stated. The
`governing test is whether the matters complained of in the private action “bear a
`real relation” to a matter complained of in the government suit. Leh v. Gen.
`Petroleum Corp., 382 U.S. 54, 59, 86 S.Ct. 203, 15 L.Ed.2d 134 (1965). “The
`private plaintiff is not required to allege that the same means were used to achieve
`the same objectives of the same conspiracies by the same defendants,” id. at 59,
`but simply must allege “a significant, although incomplete, overlap of subject
`matter” to toll the statute, “even as to the differences.” Morton’s Market, Inc. v.
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`Gustafson's Dairy, Inc., 198 F.3d 823, 830 (11th Cir.1999). “In general,
`consideration of the applicability of ... [section 16(i)] must be limited to a
`comparison of the two complaints on their face.” Leh, 382 U.S. at 65; Greyhound
`Corp. v. Mt. Hood Stages, Inc., 437 U.S. 322, 331, 98 S.Ct. 2370, 57 L.Ed.2d 239
`(1978). FN2 Section 16(i) is not to be given a “niggardly construction” and must
`be “read in light of Congress' belief that private antitrust litigation is one of the
`surest weapons for effective enforcement of the antitrust laws.” Leh, 382 U.S. at
`59 (quoting Minn. Mining & Mfg. Co. v. N.J. Wood Finishing Co., 381 U.S. 311,
`318, 85 S.Ct. 1473, 14 L.Ed.2d 405 (1965)).
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`In re Microsoft Corp. Antitrust Litig., Inc., 2005 WL 1398643 (D. Md. 2005).
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`GE’s Complaint alleges as follows as to the issue of whether Section 5(i) of the Clayton
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`Act tolls the limitations period:
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`133.
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`132.
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`. . . the limitations periods are tolled under Section [5(i)] of the Clayton
`Act . . .
`Tolling under Section [5(i)] began on September 20, 2010, when the DOJ
`initiated criminal proceedings against Panasonic Corp. and Embraco NA.
`Those criminal proceedings terminated on November 23, 2010 and
`January 6, 2011, respectively. Accordingly, absent the filing of any
`further related criminal proceedings, the limitations period was extended
`until January 6, 2012.
`134. On September 27, 2011, the DOJ initiated related criminal proceedings
`against Messrs. Verissimo, Ernesto Heinzelmann, and Adachi. As this
`criminal proceeding was filed prior to January 6, 2012, it had the effect of
`extending the already-existing tolling period under Section [5(i)]. The
`criminal proceeding against Messrs. Verissimo, Ernesto Heinzelmann, and
`Adachi is still pending and hence the tolling period under Section [5(i)]
`has not concluded.
`135. On October 4, 2011, the DOJ commenced related criminal proceedings
`against Danfoss Flensburg, which were terminated December 19, 2011.
`Absent the filing of another related criminal proceeding, the limitations
`period was extended under Section [5(i)] until December 19, 2012.
`However, because of the pending criminal proceeding against Messrs.
`Verissimo, Ernesto Heinzelmann, and Adachi, the tolling period under
`Section [5(i)] did not conclude on December 19, 2012, and to the date of
`filing this Complaint has not concluded.
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`(GE’s Compl. at 42-43).
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`GE’s response to the pending motion appears to acknowledge that, in order for its
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`damages period to extend back to to September 2006, the Court must find that Section 5(i)
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`tolling based on the “Heinzelmann Action” is appropriate.
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`In Criminal Case No. 11-20605, the following three individuals were indicted and
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`charged with conspiracy to restrain trade in violation of the Sherman Antitrust Act: 1) Ernesto
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`Heinzelmann; 2) Gerson Verissimo; and 3) Naoki Adachi. (See Criminal Case No. 11-20605,
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`Docket Entry No. 1). Those three individuals are former executives of the Embraco, Tecumseh,
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`and Panasonic Defendants. The case is pending before Judge Bernard Friedman. The
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`Indictment describes the charged offense as follows:
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`2.
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`3.
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`Beginning at least as early as October 14, 2004, and continuing until on or
`about December 31, 2007, the exact dates being unknown to the Grand
`Jury, the defendants ERNESTO HEINZELMANN, GERSON
`VERISSIMO, and NAOKI ADACKI, and other co-conspirators entered
`into and engaged in a combination and conspiracy to suppress and
`eliminate competition by fixing prices of refrigerant compressors to
`customers in the United States and elsewhere. The combination and
`conspiracy engaged in by the defendants . . . was in unreasonable restraint
`of interstate and foreign trade and commerce in violation of Section 1 of
`the Sherman Act (15 U.S.C. § 1).
`The charged combination and conspiracy consisted of a continuing
`agreement, understanding, and concert of action among the defendants and
`co-conspirators, the substantial terms of which were to fix prices by
`coordinating price increases of refrigerant compressors in the United
`States and elsewhere.
`
`(Id. at 2). That criminal case is still open but the Indictment is the only thing found on the
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`docket.
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`The Danfoss Defendants contend that GE is not entitled to Section 5(i) tolling, based on
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`the Heinzelmann Action, for two reasons. First, Defendants argue that there is an insufficient
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`overlap between GE’s Complaint in this case and the Indictment in the Heinzelmann Action.
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`Second, given the status of the Heinzelmann Action, the Danfoss Defendants argue that to allow
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`tolling based upon it would violate the purposes behind the tolling provision.
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`The first argument can be disposed of quickly. In arguing that there is insufficient
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`overlap, Defendants note that GE’s Complaint alleges a longer conspiracy period than is alleged
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`in the criminal action and that GE’s Complaint alleges additional conduct not alleged in the
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`criminal action. But there only needs to be limited overlap and a “private action that is
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`substantially broader than a prior Government action may still benefit from § 16(i) tolling where
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`the allegations in the private action incorporate the subject matter of the Government action.”
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`Hinds County, Miss. V. Wachovia Bank, N.A., 895 F.Supp.2d 617, 627 (S.D. N.Y. 2012) (citing
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`In re Antibiotic Antitrust Actions, 333 F.Supp. 317, 321 (S.D.N.Y.1971); see also Zenith Radio,
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`401 U.S. 321, 91 S.Ct. 795 and In re Scrap Metal Antitrust Litig., No. 02 Civ. 0844, 2006 WL
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`2850453, at *22 (N.D.Ohio 2006)).
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`Defendants’ second argument focuses on the fact that since the Indictment was filed on
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`September 27, 2011 – several years ago – there has been no activity in the Heinzelmann Action.
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`Defendants assert that the Indictment is “not an indictment; it is an assurance of exile. This
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`indictment may, as a narrow technical matter, remain open until the last of the indictees dies, but
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`there is no realistic possibility the case will ever proceed.” (Defs.’ Br. at 11). Defendants
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`contend that, as a result of this situation, to allow tolling based on the Heinzelmann Action
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`would violate the purposes behind Section 5(i) tolling.
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`Unfortunately, the parties have not cited, and this Court has been unable locate, any Sixth
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`Circuit cases discussing Section 5(i) tolling.
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`Directing the Court to various other courts, Defendants contend that the purposes behind
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`Section 5(i) do not supporting tolling here. They contend Section 5(i)’s purposes are: 1) “to
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`permit private claimants to obtain the benefit of the evidence and legal rulings involved in the
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`Government’s action” (Defs.’ Br. at 10); and 2) to further the goals of “certainty and
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`predictability” as to limitations periods. (Id. at 11).
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`But the parties have not cited, and this Court has not found, any decisions that deal with
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`this narrow issue – whether Section 5(i) tolling applies when there is a related indictment but the
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`persons indicted are fugitives and that case is not actively proceeding.
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`There is authority to support the Danfoss Defendants’ position as to the purposes behind
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`Section 5(i) tolling. See, e.g., Charley’s Tour & Transp., Inc. v. Interisland Resorts, Ltd., 618
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`F.Supp. 84, 86 (D. Haw. 1985) (“Section 5(i) was enacted for two purposes. The first was to
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`ensure that private litigants would have the benefit of prior Government antitrust enforcement
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`efforts. The second was to create a more certain running of the statute of limitations.”) (citing
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`Greyhound Corp. v. Mt. Hood Stages, Inc., 437 U.S. 322, 333-34 (1978)).
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`Defendants assert that, because the Indictment in the Heinzelmann Action “is likely to
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`remain open indefinitely,” that action will not provide any evidentiary assistance to GE that
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`would benefit it in this case. But that argument, of course, assumes that the Heinzelmann Action
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`will not proceed. We do not know that is the case. Indeed, GE attached an April 4, 2014 Press
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`Release from the Department of Justice (Ex. 16 to Schnorrenberg Decl.) that states that an Italian
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`national was recently extradited from Germany on a charge of participating in a price-fixing
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`conspiracy. Thus, a prior criminal action that had been filed on August 26, 2010 is proceeding
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`after being on hold for several years.
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`The Danfoss Defendants correctly note that the Supreme Court has recognized that one of
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`the goal’s of Section 5(i) is to ensure certainty and predictability as to the application of the
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`statue of limitations:
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`The Senate Report accompanying the 1955 amendments reflects congressional
`policy against “undue prolongation of [antitrust] proceedings” by extending the
`limitations period. It noted:
`
`“While the committee believes it important to safeguard the rights of plaintiffs by
`tolling the statute during the pendency of Government antitrust actions, it
`recognizes that in many instances the long duration of such proceedings taken in
`conjunction with a lengthy statute of limitations may tend to prolong stale claims,
`unduly impair efficient business operations, and overburden the calendars of
`courts. The committee believes the provision of this bill will tend to shorten the
`period over which private treble-damage actions will extend by requiring that the
`plaintiff bring his suit within 4 years after it accrued or within 1 year after the
`Government's case has been concluded.
`
`“Whi