California judge trims class claims in hard-disk antitrust lawsuit

  • “Vast majority” of state claims are upheld in lawsuit alleging price-fixing conspiracy for key hard disk component
  • Defense lawyers had argued “long and complicated” distribution chain should doom case

(Reuters) – A California federal judge has curbed some state claims but broadly said civil antitrust allegations could move forward against technology companies accused of participating in a decade-long scheme to fix prices for a key component of hard disk drives.

U.S. District Judge Maxine Chesney’s ruling on Wednesday said the plaintiffs’ lawyers in a consolidated class action representing resellers and end-users of hard disk “suspension assemblies,” an essential part of computer drives, had demonstrated standing to pursue claims against defendants including Japanese manufacturers NHK Spring Co Ltd and TDK Corp.

Lawyers for the defendants, represented by teams from Baker & McKenzie and Morgan, Lewis & Bockius, sought dismissal of all state and federal antitrust and consumer protection claims.

The defense lawyers argued the “long and complicated” chain of distribution meant the plaintiffs could not prove an antitrust injury. The defenders also argued that the assembly parts at issue in the litigation make up only a “small percentage” of the cost of products the plaintiffs said they purchased.

Chesney said the defendants “have cited no case setting a particular threshold percentage a plaintiff must meet to establish standing to challenge an alleged price-fixing conspiracy, and no such case appears to exist.”

The end-user plaintiffs are individuals who bought a device with a hard disk drive, and the reseller plaintiffs purchased for “resale” products that contained hard disk suspension assemblies. The plaintiffs contend the alleged price-fixing conspiracy caused them to pay higher prices for computers and other devices.

Class lawyers representing resellers did not immediately return messages seeking comment on Thursday. Lawyers for TDK and NHK Spring also didn’t immediately respond to a message seeking comment.

Lawyers for the end-user class, Zelle partner Chris Micheletti and Robins Kaplan partner Aaron Sheanin, said on Thursday that they were “very gratified that the court rejected defendants’ Article III, antitrust injury and other dismissal arguments.”

Chesney upheld the “vast majority” of state-law claims, the plaintiffs’ lawyers said.

NHK Spring agreed to plead guilty in July 2019 to a global price-fixing conspiracy for suspension assembly components, according to the U.S. Justice Department. The company paid a $28.5 million criminal antitrust fine.

The case is In re: Hard Disk Drive Suspension Assemblies Antitrust Litigation, U.S. District Court for the Northern District of California, No. 3:19-md-02918-MMC.

For reseller plaintiffs: Victoria Sims of Cuneo Gilbert & LaDuca, and Shawn Raiter of Larson King

For end-user plaintiffs: Chris Micheletti of Zelle and Aaron Sheanin of Robins Kaplan

For defendants: Mark Hamer of Baker & McKenzie, and Clay Everett of Morgan, Lewis & Bockius

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Japanese computer parts maker pleads guilty to price-fixing, agrees to fine

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Lyndia Mongold