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In re Cathode Ray Tube (CRT) Antitrust Litigation

United States District Court, N.D. California

February 13, 2017

IN RE: CATHODE RAY TUBE (CRT) ANTITRUST LITIGATION
v.
Mitsubishi Electric Corporation, et al., Case No. 14-cv-2058 JST This Order Relates To Crago, d/b/a Dash Computers, Inc., et al. MDL No. 1917

          ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT WITH MITSUBISHI ELECTRIC DEFENDANTS

          JON S. TIGAR United States District Judge.

         The Direct Purchaser Plaintiffs (“DPPs”) move for preliminary approval of class action settlement with the Mitsubishi Electric Defendants.[1] ECF No. 5099. For the reasons below, the Court will grant the motion

         I.BACKGROUND

         A. Factual and Procedural Background

         This multidistrict litigation arises from an alleged conspiracy to fix prices of cathode ray tubes (“CRTs”). The alleged conspiracy ran from March 1, 1995 through November 25, 2007. The first DPPs filed a class action complaint on behalf of themselves and all others similarly situated in November 2007, alleging a violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 4 of the Clayton Act, 15 U.S.C. § 15. Numerous additional actions followed. The Judicial Panel on Multidistrict Litigation (“JPML”) transferred all related actions to this Court on February 15, 2008. Saveri & Saveri, Inc. was appointed Interim Lead Class Counsel for the nationwide class of direct purchasers on May 9, 2008. ECF No. 282.

         Discovery and motion practice in this Multidistrict Litigation case (“MDL”) have been extensive. For example, “[t]he parties have reviewed and analyzed millions of pages of documents produced in discovery, ” “responded to hundreds of interrogatories and requests for admission, ” and conducted over “125 depositions.” ECF No. 5099-1 at 2. Moreover, as the DPPs put it, “[v]irtually every legal or factual issue of any substance has been the subject of motion practice in this case, or in the cases brought by the DAPs, or both.” ECF No. 5099 at 8.

         There have been eight prior settlements between the DPPs and other Defendants in this case, valued at $10 million (“CPT” or “Chunhwa”), [2] $15 million (“Philips”), [3] $17.5 million (“Panasonic”), [4] $25 million (“LG”), [5] $13.5 million (“Toshiba”), [6] $13.45 million (“Hitachi”), [7] $33 million (“Samsung SDI”), [8] and $9.75 million (“Thomson”)[9]. Id. at 9. In each of these prior DPP settlements, the Court certified a settlement class, appointed Saveri & Saveri, Inc. as Settlement Class Counsel, and found that the manner and form of providing notice of the settlements to class members was the best notice practicable under the circumstances. Id. at 9-10 (listing specific ECF entries). For each, the Court also entered orders of final approval and final judgments of dismissal with respect to the settling (and released) defendants. See ECF Nos. 1413, 1414, 1509, 1510, 1622, 1792, 3932, 3933, 4416, 4417.

         On July 8, 2015, the Court entered an order granting the DPP's motion for class certification against the Mitsubishi Electric Defendants. ECF No. 3902. The DPPs later provided notice to the Class, which explained the opt-out procedure. ECF No. 5099 at 10. Nineteen entities opted out. Id. The DPPs have now moved for preliminary approval of their class action settlement with the Mitsubishi Electric Defendants. ECF No. 5099.

         B. Terms of the Agreement

         The Settlement provides that Defendants will pay the DPP Class $75, 000, 000 in cash in exchange for dismissal with prejudice and a release of all claims asserted in the Second Amended Complaint. ECF No. 5099-1 at 13-16. Specifically, the DPP Class will relinquish their claims against the “Mitsubishi Electric Releasees.”[10] ECF No. 5099-1 at 14. The release excludes claims for product defects, personal injury, and ordinary commercial disputes. Id. Indirect purchaser claims under state law for purchases from entities other than defendants and alleged co-conspirators (and their related companies) are also excluded. Id.

         The Settlement will become final upon: “(i) the Court's approval of the Settlement pursuant to Rule 23(e) and the entry of final judgment of dismissal with prejudice as to the Mitsubishi Electric Defendants; and (ii) the expiration of the time for appeal or, if an appeal is taken, affirmance of the judgment with no further possibility of appeal.” ECF No. 5099 at 12; ECF No. 5099-1 at 12-13.

         Subject to the approval and direction of the Court, the Settlement payment will be used to: (1) pay members of the class; (2) pay attorneys' fees, costs, and expenses to the extent later awarded by the Court; (3) pay all taxes associated with any interest earned on the escrow account; and (4) up to $300, 000 may be used to pay for Notice costs and future costs incurred in the administration and distribution of the Settlement payments. ECF No. 5099 at 11. Payments to the class will be on the basis of each class member's pro rata share of the total affected sales, with no portion reverting to Defendants. ECF No. 5099-1 at 4. “[T]to determine each Class member's CRT purchases, CRT tubes (CPTs/CDTs) are calculated at full value while televisions are valued at 50% and computer monitors are valued at 75%.” Id.

         C. Jurisdiction

         The Court has jurisdiction pursuant to 28 U.S.C. § 1332(d)(2).

         II. PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

         A. Legal Standard

         The Ninth Circuit maintains a “strong judicial policy” that favors the settlement of class actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Courts generally employ a two-step process in evaluating a class action settlement. First, courts make a “preliminary determination” concerning the merits of the settlement and, if the class action has settled prior to class certification, the propriety of certifying the class. See Manual for Complex Litigation, Fourth (“MCL, 4th”) § 21.632 (FJC 2004). “The initial decision to approve or reject a settlement proposal is committed to the sound discretion of the trial judge.” City of Seattle, 955 F.2d at 1276. The Court's task at the preliminary approval stage is to determine whether the settlement falls “within the range of possible approval.” In re Tableware Antitrust Litig., 484 F.Supp.2d 1078, 1080 (N.D. Cal. 2007) (quotation omitted); see also MCL, 4th § 21.632 (explaining that courts “must make a preliminary determination on the fairness, reasonableness, and adequacy of the settlement terms and must direct the preparation of notice of the certification, proposed settlement, and date of the final fairness hearing.”). Second, courts must hold a hearing pursuant to Rule 23(e)(2) to make a final determination of whether the settlement is “fair, reasonable, and adequate.”

         Preliminary approval of a settlement is appropriate if “the proposed settlement appears to be the product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does not improperly grant preferential treatment to class representatives or segments of the class, and falls within the range of possible approval.” In re Tableware, 484 F.Supp.2d at 1079 (quotation omitted). The proposed settlement need not be ideal, but it must be fair and free of collusion, consistent with counsel's fiduciary obligations to the class. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir. 1998) (“Settlement is the offspring of compromise; the question we address is not whether the final product could be prettier, smarter or snazzier, but whether it is fair, adequate and free from collusion.”). To assess a settlement proposal, courts must balance a number of factors:

the strength of the plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed and the state of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.

Id. at 1026 (citations omitted). The proposed settlement must be “taken as a whole, rather than the individual component parts” in the examination for overall fairness. Id. Courts do not have the ability to “delete, modify, or substitute certain provisions”; the settlement “must stand or fall in its entirety.” Id.

         B. Analysis

         1. ...


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