Top Defense Results: In re: Optical Disk Drive Products Antitrust Litigation

A federal judge in October denied to certify a large class action alleging a conspiracy to fix the prices of optical disk drives after defense attorneys attacked the plaintiffs' expert's methodology.

U.S. District Judge Richard Seeborg's ruling could save the multiple technology company defendants as much as $9.6 billion in damages. In re: Optical Disk Drive Products Antitrust Litigation, MD10-02143 (N.D. Cal., filed April 7, 2010).

Seeborg, however, recently gave permission for the plaintiffs to try again, as long as the potential classes are narrowed.

This case stemmed from a Department of Justice criminal investigation against a slew of companies, one of which pleaded guilty during a previous investigation.

In all, 27 defendants were accused of conspiring to fix the prices of hundreds of millions of optical disk drives sold between 2004 and 2010.

One suit was brought by direct purchasers - comprising computer manufacturers, game console manufacturers and individuals - that accused optical disc drive manufacturers of driving up prices.

The other case involved indirect purchasers, which claimed that these overcharges to manufacturers resulted in higher prices for consumers.

The 9th U.S. Circuit Court of Appeals rejected both groups' appeals of Seeborg's class certification denial last month.

O'Melveny & Myers LLP and Latham & Watkins LLP took the lead for the joint defense group in writing the brief for the direct purchaser case. They asked the court to require the plaintiffs to test the theory of their own economist, who assumed class-wide impact.

"We asked the court to use the scientific method and actually test their class-wide impact hypothesis rather than just assume it," said Bo Pearl, a managing partner in O'Melveny & Myers' Century City office.

Seeborg sided with the defense, saying the plaintiffs' model "makes no attempt to establish, but instead simply assumes, class-wide impact."

Attorneys for the direct purchasers are not giving up, confident that certifying a class is still legally viable, said Richard Saveri of Saveri & Saveri Inc.

Winston & Strawn and Boies, Schiller & Flexner LLP took the lead in defending against the indirect purchasers' claims.

Plaintiffs' attorneys with Hagens Berman Sobol Shapiro LLP said they presented an economic analysis that was more comprehensive than any of the other analyses of prior antitrust component part cases.

"We thought the judge erred," said Steve W. Berman, the firm's managing partner. "He just didn't get the economics of what our experts had pointed out."

- Deirdre Newman