United States District Court, N.D. California
IN RE CATHODE RAY TUBE CRT ANTITRUST LITIGATION MDL No. 1917 This Relates To ALL INDIRECT PURCHASER ACTIONS
ORDER GRANTING FINAL APPROVAL OF INDIRECT PURCHASER
TIGAR UNITED STATES DISTRICT JUDGE
large antitrust multidistrict litigation case
("MDL"), Lead Counsel for one of three sets of
plaintiffs - the Indirect Purchaser Plaintiffs
("IPPs") - moves for final approval of the
settlements reached between the IPPs and various defendants.
The settlement agreements resolve claims against six
different corporate families. Also before the Court is the
allocation of eight different settlement funds. The Court
previously referred the settlements and allocation issues to
Special Master Martin Quinn. ECF No. 4077. He recommended
approval in a Report and Recommendation issued on January 28,
2016. ECF No. 4351 ("R&R"). Various parties then
filed objections to the R&R, which this order resolves. The
Special Master also recommended that Lead Counsel make
certain adjustments to the distribution of the settlement
reached with defendant Chunghwa; Lead Counsel did so, and the
Special Master recommended that the Court approve that plan
as well. ECF No. 4445 ("Supplemental R&R").
Objections were filed to the Supplemental R&R, which are also
before the Court.
Court will overrule the objections to the six settlements,
grant final approval of the six pending settlements, and
approve the allocation with respect to all eight settlements.
The Court will also adopt both the R&R and the Supplemental
R&R, except as excluded here or as relates to those matters
reserved for a future order. The Court reserves ruling on
issues pertaining to attorneys' fees, expenses, and
incentive awards, which will be the subject of a separate
history of this case is well known to the parties, objectors,
and interested states. By way of summation, this case is
predicated upon an alleged conspiracy to price-fix cathode
ray tubes ("CRTs"), a core component of tube-style
screens for common devices including televisions and computer
monitors. This conspiracy ran from March 1, 1995 to
November 25, 2007, involved many of the major companies that
produced CRTs, and allegedly resulted in overcharges of
millions, if not billions, of U.S. dollars to domestic
companies that purchased and sold CRTs or finished products
containing CRTs for purposes such as personal use. A civil
suit was originally filed in 2007, ECF No. 1, consolidated by
the Joint Panel on Multidistrict Litigation shortly
thereafter, see ECF No. 122, assigned as an MDL to
Judge Samuel Conti, see id., and ultimately
transferred to the undersigned, see ECF No. 4162.
leading up to the pending settlement agreements has been
extensive, spanning millions of pages and hundreds of
depositions taken over eight-plus years. Motion practice has
been extensive and hard-fought. For example, the parties
filed or responded in some way to 36 motions for summary
judgment, ECF No. 4370 at 16, and 64 motions in limine,
id. at 20.
this large, comprehensive settlement, there were two smaller
ones. The IPPs settled with Chunghwa for $10, 000, 000 in
2011,  and with LG for $25, 000, 000 in
2013. Both the Chunghwa settlement and LG
settlement postponed approval of the allocation of the
settlement funds pending additional settlements with the
Court originally set the case for trial in March 2015. As the
trial date approached or shortly after it was continued, the
IPPs reached settlement agreements with six groups of
Defendants in the shadow of the pending motions. The
settlements included agreements with Philips for $175, 000,
000,  Panasonic for $70, 000, 000,
Hitachi for $28, 000, 000,  Toshiba for $30, 000, 000,
Samsung SDI for $225, 000, 000,  and Thomson and TDA
(jointly) for $13, 750, 000,  for a total of $541, 750, 000 .
Including the prior Chunghwa and LG settlements, the total
IPP settlement amount is $576, 750, 000.
for the funds from the Chunghwa settlement (which the Court
addresses later), the settlement agreements propose to
distribute the settlement funds on a pro-rata basis based on
the number of claimants, with a proposed minimum recovery of
$25 per person,  and a cap on recovery of treble the
damages a claimant has actually suffered. See R&R at
56; ECF No. 4071 at 9. There will be no cy pres
distribution, no coupons, and no reversion to any defendant.
Money will be paid to those claimants in states where the law
permits recovery by indirect purchasers (so-called
"repealer states"). The nationwide class -
including both those in repealer states, as well as those in
states whose laws do not provide for recovery to indirect
purchasers ("non-repealer states") - would agree to
release all present and future claims for injunctive relief.
The Court previously granted preliminary approval of these
settlements. ECF No. 3906.
September 24, 2015, the Court appointed Special Master Martin
Quinn to evaluate whether the IPP Settlements were fair and
reasonable, and to "assist the Court with the approval
of the pending settlements in the Indirect-Purchaser Cases,
the determination of a fair, reasonable, and adequate
aggregate award of attorneys' fees and the reimbursement
of expenses to all plaintiffs' counsel, a fair and
reasonable division of the aggregate award among
plaintiffs' counsel, and service awards to the named
plaintiffs, including any objections to these
matters[.]" ECF No. 4077 at 3. Lead Counsel for the IPPs
filed a motion for final approval of these settlements before
the Special Master on November 19, 2015. ECF No. 4370.
Master Quinn reviewed the proposed settlement, the moving
papers filed in support, the objections filed in opposition,
the applications for an award of attorneys' fees, certain
records lodged in support of those fee applications, and
other materials filed in support and opposition. See,
e.g., ECF Nos. 4363-68, 4370-73. He recommended that the
settlement be approved. R&R at 77.
R&R, Special Master Quinn noted certain problems with the
plan of distribution for the Chunghwa settlement, rejected
the motion for approval of allocation of funds from that
settlement as originally framed, and recommended that Lead
Counsel modify the plan of distribution to address the
Special Master's concerns. Lead Counsel made the
requested changes, and the Special Master approved the
modified plan. Supplemental R&R at 7-8.
Ninth Circuit has summarized, the Supreme Court "barred
indirect purchasers' suits, and left the field of private
antitrust enforcement to the direct purchasers."
Royal Printing Co. v. Kimberly Clark Corp., 621 F.2d
323, 325 (9th Cir. 1980). In response to the Illinois
Brick decision, many states passed so-called
"Illinois Brick repealer statutes, " which give
indirect purchasers the right to sue when firms violate
analogous state antitrust laws. See, e.g.,
Robert H. Lande, New Options for State Indirect Purchaser
Legislation: Protecting the Real Victims of Antitrust
Violations, 61 Ala.L.Rev. 447, 448 (2010). Such states
are referred to a "repealer states." A state which
has not enacted such a statute is referred to as a
"non-repealer state." Several parties filed
objections to Special Master Quinn's original R&R,
and certain states filed Statements of Interest,
all of which the Court now considers. Various parties also
objected to the Supplemental R&R,  and the Court considers
those objections here as well. The Court held two fairness
hearings, on March 15, 2016 and April 19, 2016. No member of
the public appeared at either hearing.
the Special Master has already opined regarding the fairness
and adequacy of the settlements, this Court addresses only
the objections to the R&R and the Supplemental R&R, and does
not reach the panoply of other considerations that attend the
approval of a class settlement ab initio.
Court has jurisdiction pursuant to 28 U.S.C. §
FINAL APPROVAL OF CLASS ACTION SETTLEMENT
claims, issues, or defenses of a certified class may be
settled . . . only with the court's approval."
Fed.R.Civ.P. 23(e). Rule 23(e) "requires the district
court to determine whether a proposed settlement is
fundamentally fair, adequate, and reasonable."
Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th
Cir. 1998). To assess a settlement proposal, the district
court must balance a number of factors:
(1) the strength of the plaintiffs' case; (2) the risk,
expense, complexity, and likely duration of further
litigation; (3) the risk of maintaining class action status
throughout the trial; (4) the amount offered in settlement;
(5) the extent of discovery completed and the stage of the
proceedings; (6) the experience and views of counsel; (7) the
presence of a governmental participant; and (8) the reaction
of the class members to the proposed settlement.
Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566,
575 (9th Cir. 2004) (citing Hanlon, 150 F.3d at
1026). While the Court considers each factor individually,
"[i]t is the settlement taken as a whole, rather than
the individual component parts, that must be examined for
overall fairness . . . The settlement must stand or fall in
its entirety." Hanlon, 150 F.3d at 1026 (citing
Officers for Justice v. Civil Serv. Comm'n of City &
Cty. of San Francisco, 688 F.2d 615, 628 (9th Cir.
reviewing the R&R and the Supplemental R&R, the Court reviews
the Special Master's findings of fact and conclusions of
law de novo, and his rulings on procedural matters
for abuse of discretion. Fed.R.Civ.P. 53(f); see
also ECF No. 4077 at 7, amended by ECF No. 4298
is a strong judicial policy that favors settlements,
particularly where complex class action litigation is
concerned." In re Syncor ERISA Litig., 516 F.3d
1095, 1101 (9th Cir. 2008) (citing Class Plaintiffs v.
City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)).
However, "settlement class actions present unique due
process concerns for absent class members, and the district
court has a fiduciary duty to look after the interests of
those absent class members." Allen v. Bedolla,
787 F.3d 1218, 1223 (9th Cir. 2015) (internal quotations and
Ninth Circuit "usually impose[s] the burden on the party
objecting to a class action settlement." See United
States v. Oregon, 913 F.2d 576, 581 (9th Cir.
determining whether to approve a class action settlement, the
Court's "threshold task is to ascertain whether the
proposed settlement class satisfies the requirements of Rule
23(a) of the Federal Rules of Civil Procedure applicable to
all class actions, namely: (1) numerosity, (2) commonality,
(3) typicality, and (4) adequacy of representation."
Hanlon, 150 F.3d at 1019. The Court must also ensure
that at least one of the three requirements of the Federal
Rule of Civil Procedure 23(b) is met. Here, the Special
Master found that the settlement meets each of the Rule 23(a)
factors, and that the settlement class satisfies Rule
23(b)'s predominance requirement. See R&R at
17-21. No party objects to any of these findings except those
related to adequacy of representation. The Court will discuss
adequacy of representation at length in a later section
related to allocation, and will there overrule the
objections. The Court accordingly adopts the Special
Master's Rule 23 analysis and incorporates it by
reference as though fully set forth here (except as it
relates to adequacy of representation). Accordingly, the
Court finds that the settlement class meets the requirements
Adequacy of Notice
preliminary approval stage, the Court approved the
parties' proposed plan for providing notice to the class.
ECF No. 3906 ¶¶ 11-13, 15. Objectors now raise
several issues with regard to the notice program, including
notice to foreign residents. Hull Obj. at 3; Bonsignore Obj.
at 8-11. "Adequate notice is critical to court approval
of a class settlement under Rule 23(e)."
Hanlon, 150 F.3d at 1025.
Master Quinn described the notice to foreign residents who
may have purchased a CRT in the United States, and his
conclusions as to the adequacy of that notice, as follows:
Foreign residents who were in position to purchase CRT
products in the United States during the Class Period fall
squarely within the notice efforts. The Summary Notice was
published as a press release in foreign-based media outlets
in 15 countries, including Canada and Mexico. See
Fisher Decl., ¶ 3. Nonresidents living in border regions
- particularly those capable of entering the United States
for purposes of purchasing a television or computer - are
likely to use the internet just like everyone else; thus,
they were subject to digital outreach. The impact of these
efforts is demonstrated by the fact that claims have already
been submitted in this Proposed Settlements by non-U.S.
persons with addresses in numerous foreign countries
including Canada, Costa Rica, Germany, Great Britain, Israel,
Iceland and Spain. Id., ¶ 3(c).
45-56. Bonsignore objects that "there is insufficient
evidence that the Notice reached foreign residents, "
Bonsignore Obj. at 10, but does nothing to meet his burden of
showing that notice was inadequate. Without knowing, for
example, the percentage of foreign purchasers of CRTs
compared to the percentage of claimants, it simply is not
possible to give Bonsignore's objection any weight.
Master Quinn described the extent of the notice program and
resolved objections regarding (1) the age and income profile
of recipients, (2) notice to foreign residents, (3) notice to
non-English speakers, (4) the supposed need for televised
notice, and (5) the terms of notice provided to the
nationwide class. R&R 46-51. The Court adopts that discussion
and reasserts it as though set forth fully here. Objectors
now raise two areas of concern: whom the notice program
targeted and how to properly calculate the reach of the
whom was targeted, the Special Master's findings show
that the notice program did target those in relevant
demographics by age, income level, or location of residence.
Objector Hull argues that foreign residents received
inadequate notice. See Hull Obj. at 3. But Objector
Hull does not explain why the Special Master's findings
are wrong. See Hull Obj. at 3.Objector
Bonsignore suggests that the Special Master's findings
inaccurately assume that the existence of claims filed by
foreign residents constitutes dispositive evidence that
notice reached a sizable segment of that population.
See Bonsignore Obj. at 9-10. Yet Bonsignore offers
no evidence or legal basis to conclude that the broadly
published notice, which resulted in claims by foreign
residents, is insufficient. The burden rests with Bonsignore,
as an objector, to demonstrate that notice was inadequate.
See Oregon, 913 F.2d at 581. This objection, and the
remaining objections related to whether the notice adequately
targeted various demographics, are overruled.
also ask the Court to reject the Special Master's
conclusion that the notice program's reach was
sufficiently broad. With regard to the digital media
campaign, they ask the Court to appoint an expert to (1)
separately evaluate the reach of that campaign and (2) assist
in the creation of a more robust notice plan. See
C-S Obj. at 9-10; Bonsignore Obj. at 9-11. The Court
concludes these steps are unnecessary. The evidence before
the Special Master, and now before this Court, included a
report by claims administrator Joseph Fisher showing that the
print media campaign reached 57% of the targeted demographic
and the digital media campaign reached 61%. See R&R
at 49. When these rates are combined and filtered for
overlap, they provide for an overall reach of 83%.
Id. The Court credits these conclusions, which are
supported by the strong response rate to the notices.
previously noted, the Ninth Circuit "usually impose[s]
the burden on the party objecting to a class action
settlement." Oregon, 913 F.2d at 581. The Court
will not indulge an effort to attempt to create the evidence
that objectors themselves did not provide.
the Court overrules these objections and concludes that the
parties have provided the best practicable notice to class
Fairness, Adequacy, and Reasonableness
Strength of Plaintiffs' case
of a class settlement is appropriate when plaintiffs must
overcome significant barriers to make their case.
Chun-Hoon v. McKee Foods Corp., 716 F.Supp.2d 848,
851 (N.D. Cal. 2010). Special Master Quinn recounts several
hurdles IPPs would face absent a settlement, and concludes
that this factor "weighs strongly in favor of approving
the Proposed Settlements." R&R at 22. Hearing no
objection to this conclusion and good cause appearing, the
Court adopts the Special Master's analysis.
Risk of continued litigation
and risks in litigating weigh in favor of approving a class
settlement. See Rodriguez v. W. Publ'g Corp.,
563 F.3d 948, 966 (9th Cir. 2009). Special Master Quinn finds
this factor weighs in favor of settlement, as there was
"great risk" to IPPs in continuing to pursue
litigation, including both uncertainty over the results of
pending motions and challenges (and delay) in collecting any
winnings. See R&R at 22-24. The Court further notes
that its analysis of this factor with respect to the
DPPs' case applies here with equal force. See
ECF No. 4260 at 6-7. Hearing no objection and good cause
appearing, the Court adopts the Special Master's
assessing the consideration obtained by the class members in
a class action settlement, ‘it is the complete package
taken as a whole, rather than the individual component parts,
that must be examined for overall fairness.'"
Nat'l Rural Telecomms. Cooperative v. DIRECTV,
Inc., 221 F.R.D. 523, 527 (C.D. Cal. 2004) (quoting
Officers for Justice, 688 F.2d at 628.) "In
this regard, it is well-settled law that a proposed
settlement may be acceptable even though it amounts to only a
fraction of the potential recovery that might be available to
the class members at trial. Id. (citing Linney
v. Cellular Alaska Partnership, 151 F.3d 1234, 1242 (9th
assessing such a large settlement, it is tempting to evaluate
its merits based on its size alone - and without a doubt,
$576, 750, 000 is a significant amount of money. The IPPs and
Special Master Quinn make much of the fact that this is the
"second largest cash recovery ever obtained on behalf of
indirect purchasers." R&R at 24, 56; accord ECF
No. 4370 at 1 (touting the settlement as "one of the
largest recoveries ever on behalf of indirect purchaser
plaintiffs"). As the Court has observed in reviewing
other settlements, however, the relevant question is not how
large the total dollar amount of the settlement is, but how
great a percentage of the potential recovery it
reason the settlement here is so large is not because - or at
least not only because - the settlement represents an
"exceptional result for the class, " as IPPs would
have it, ECF No. 4071 at 11, but rather because the injury
suffered by the class was even larger. The alleged injury in
the case was $2.78 billion, see R&R at
56; the settlement represents 20% of that
amount, without accounting for the possibility of treble
damages under the antitrust laws. In the LCD case,
by contrast, the settlement returned 50% of the potential
recovery. In re TFT-LCD (Flat Panel) Antitrust
Litig., No. M 07-1827 SI, 2013 WL 1365900, at *7 (N.D.
Cal. Apr. 3, 2013).
while the settlement might not be as exceptional or
extraordinary as its proponents claim, the proposed aggregate
settlement here is without question a good recovery and
firmly in line with the recoveries in other
Cooper and Scarpulla note that the IPPs do not include the
"likely recovery per plaintiff under the terms of the
settlement and the potential recovery if plaintiffs were to
prevail on each of their claims, " as required by this
judicial district's Procedural Guidance for Class Action
Settlements. C-S Obj. at 14. Special Master Quinn did not
address this requirement. The IPPs contend that the
procedural guidance "is just that -- guidance for
evaluating whether a settlement is fair, reasonable, and
adequate." See IPP Resp. at 28.
Court agrees with IPP Counsel. The Northern District of
California's Procedural Guidance provides a useful
checklist for attorneys and the Court, and this Court has
previously relied upon it in evaluating proposed settlements.
Smith v. Am. Greetings Corp., No. 14-CV-02577-JST,
2015 WL 4498571, at *10 (N.D. Cal. July 23, 2015). However,
it is intended, as both its title and the Court's
introductory language make clear, simply as guidance. In
the end, what is required is sufficient information for the
Court to confidently determine that a settlement "taken
as a whole is fair, reasonable, and adequate." In re
Bluetooth Headset Products Liab. Litig., 654 F.3d 935,
946 (9th Cir. 2011) (citing Fed.R.Civ.P. 23(e)(2)).
additional information on average recoveries might be
helpful, the nature of a pro rata distribution makes such
estimates difficult where the claims deadline is not yet
passed for all potential claimants. See ECF No. 4339
at 5. The information the IPPs have provided regarding
potential recovery, even though stated in the aggregate, is
sufficient to permit the Court to review the proposed
settlement for fairness, reasonableness, and adequacy, when
combined with the plan of allocation that describes the
minimum and maximum that can be recovered by each class
member. Accordingly, the Court overrules the
Court agrees with the Special Master that this factor favors
approval of the settlement.
Extent of discovery
the context of class action settlements, formal discovery is
not a necessary ticket to the bargaining table where the
parties have sufficient information to make an informed
decision about settlement." In re Mego Fin. Corp.
Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (citation
omitted). However, the extent of discovery completed supports
approval of a proposed settlement, especially when litigation
has "proceeded to a point at which both plaintiffs and
defendants ha[ve] a clear view of the strengths and
weaknesses of their cases." McKee Foods, 716
F.Supp.2d 851-52 (internal quotation marks omitted). In this
case, the Special Master summarized the parties'
discovery efforts as follows:
[S]ignificant discovery was already completed by the time the
parties reached their settlement agreements. [The] IPPs and
their experts had already searched, reviewed and analyzed
millions of pages of documents and voluminous data sets
produced by defendants, the DAPs and third parties, and
various parties to the litigation had already taken over 250
depositions. In addition, the parties had already exchanged
expert reports on liability and damages, including opening,
opposition, rebuttal and sur-rebuttal reports from 17 expert
witnesses, all of whom were deposed, often multiple times,
regarding the reports that they had prepared.
R&R at 25. He further noted, "the parties had also
exchanged trial exhibit lists, witness lists, deposition
designations, jury instructions and special verdict forms.
They had also filed motions in limine and other pretrial
motions." Id. No party quarrels with the
Special Master's finding that the parties were thoroughly
prepared for trial and that this factor weighs in favor of
settlement, and the Court adopts that finding.
recommendations of plaintiffs' counsel should be given a
presumption of reasonableness." See In re
Omnivision, 559 F.Supp.2d 1036, 1043 (N.D. Cal. 2007)
(citation omitted). As the Special Master notes, counsel for
the IPPs has had a long and very successful career as an
antitrust lawyer. See R&R at 25-26. No party having
objected, the Court adopts the Special Master's finding
that this factor favors settlement.
Class Action Fairness Act ("CAFA") requires notice
of a settlement be given to affected states with time to
comment prior to final approval of the settlement.
See 28 U.S.C. § 1715(b). This allows the
appropriate state or federal official the chance to
"voice concerns if they believe that the class action is
not in the best interest of their citizens."
Non-Repealer State SOI at 3 (quoting S. REP. 109-14, 5, 2005
U.S.C.C.A.N. 3, 6). The notification procedure serves as a
"check against inequitable settlements" and
"deter[s] collusion between class counsel and defendants
to craft settlements that do not benefit the injured
parties." See id. (quoting S. REP. 109-14,
14-20, 28, 32-33, 35; 2005 U.S.C.C.A.N. 3, 17-21, 28, 31-32,
Statements of Interest have been filed in total. The first,
by the State of California, was filed in time for the Special
Master's review. In response to that Statement of
Interest, the Special Master recommended extending the claims
deadline for California natural persons, ECF No. 4281, which
the Court subsequently adopted as its order, ECF No. 4339.
Otherwise, the Special Master overruled the State of
California's objections. R&R at 26-28. No one objects to
the Special Master's analysis - not even the State of
California - and the Court need not address that Statement of
Interest further. The Court adopts the R&R at 26:10-19,
second and third Statements of Interest are from thirteen
non-repealer states and two omitted repealer states,
respectively. Both Statements raise questions concerning the
adequacy of representation based on a lack of consideration
provided in exchange for the release of certain injunctive
relief claims. For reasons set forth later in this
order, the Court will overrule the objections contained in
these two Statements of Interest. Nevertheless, putting the
specific objections to one side, the mere fact that the
Attorneys General of 16 states oppose the settlement in its
current form weighs against its approval. Cf. In re
Linkedin User Privacy Litig., 309 F.R.D. 573, 589 (N.D.
Cal. Sept. 15, 2015) (finding that this factor favored
settlement where no government official appeared).
Reaction of the Class
members' positive reaction to a settlement weighs in
favor of settlement approval; "the absence of a large
number of objections to a proposed class action settlement
raises a strong presumption that the terms of a proposed
class settlement  are favorable to the class members."
In re Omnivision, 559 F.Supp.2d at 1043. "A low
number of opt-outs and objections in comparison to class size
is typically a factor that supports settlement
approval." In re Linkedin, 309 F.R.D. at 589
(citing Hanlon, 150 F.3d at 1027).
Special Master summarized the reaction of the class as
IPP's Notice Program reached millions of consumers who
purchased CRT televisions and computers. Only 11 objections
(with a total of 22 individual objectors) and five requests
for exclusion were received. Two objections have since been
withdrawn, and two of the requests for exclusion were by DAPs
that are already pursuing their own cases. Moreover, two of
the objections - those from Paul Palmer (which was withdrawn)
and Douglas St. John - are directed at fees only; they do not
challenge the sufficiency of the settlement.
R&R at 28. This Court has received nine timely objections to
the R&R, two Statements of Interest, and one letter from a
class member. See generally ECF No. 4484 (objecting
to the amount of incentive awards). Given that the class
consists of millions of indirect purchasers - and even giving
the Statements of Interest greater weight relative to other
objections - this level of objection can fairly be described
as enthusiastic approval. See, e.g.,
Churchill Village LLC v. Gen. Elec., 361 F.3d 566,
577 (9th Cir. 2004) (affirming settlement with 45 objections
out of 90, 000 notices sent); In re Linkedin, 309
F.R.D. at 589 (finding "an overall positive
reaction" by the class where only 57 class members opted
out and six objected out of a class of 798, 000);
Schuchardt v. Law Office of Rory W. Clark, No.
15-CV-01329-JSC, F.R.D., 2016 WL 1701349, at *11 (N.D. Cal.
Apr. 28, 2016) (finding that "the reaction of the Class
strongly supports final approval" where 3% of the class
opted out and no class member objected). The Court finds that
this factor weighs in favor of approval.