AT&T Mobility LLC v. AU Optronics Corp.

“To the extent a defendant’s conspiratorial conduct is sufficiently connected to California, and is not ‘slight and casual,’ the application of California [antitrust] law to that conduct is ‘neither arbitrary nor fundamentally unfair,’ and the application of California law does not violate that defendant’s rights under the Due Process Clause.”

AT&T Mobility LLC, et al., brought suit in California district court against various manufacturers and distributors (collectively, “Defendants”) of liquid crystal display (“LCD”) panels, whose principal places of business are in Asia and the United States, including California. AT&T’s complaint alleged violations of, inter alia, California’s Cartwright Act, which provides indirect purchasers of price-fixed goods with a private cause of action. AT&T claimed to have purchased billions of dollars worth of the handsets that incorporated Defendants’ LCD panels. AT&T alleged that Defendants engaged in a global conspiracy to fix LCD prices and that the prices for the handsets were artificially inflated. Defendants moved to dismiss, arguing that, because AT&T did not purchase the products in California, the Due Process Clause forbids AT&T from bringing suit in California. In its second amended complaint, AT&T alleged that Defendants entered into agreements to fix prices in California and “engaged in and implemented their conspiracy in the U.S. through the offices they maintained in California.” The district court dismissed Plaintiffs’ California law claims, concluding that “the application of antitrust laws of any state other than the state where the Plaintiffs purchased the allegedly price-fixed goods would violate Defendants’ rights to due process.” On appeal, the Court determined that the district court should have considered Defendants’ alleged agreements and conspiracies to fix LCD prices, because “in-state conduct that causes out-of-state injuries can be relevant to a due process analysis.” The Court reasoned that “[t]he relevant transaction or occurrence in a price-fixing case involves both the conspiracy to illegally fix prices and the sale of price-fixed goods.” Therefore, the district court erred in concluding that California law would apply only where the sale of the price-fixed goods occurred in California. REVERSED and REMANDED.