Case 3:19-md-02918-MMC Document 829 Filed 01/11/23 Page 1 of 37
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`
`Christopher T. Micheletti
`ZELLE LLP
`44 Montgomery St., Suite 3400
`San Francisco, CA 94104
`Telephone: (415) 693-0700
`Facsimile: (415) 693-0770
`cmicheletti@zellelaw.com
`
`William V. Reiss
`ROBINS KAPLAN LLP
`1325 Avenue of the Americas, Suite 2601
`New York, NY 10019
`Telephone: (212) 980-7400
`Facsimile: (212) 980-7499
`wreiss@robinskaplan.com
`
`Interim Co-Lead Class Counsel for the
`End-User Plaintiffs
`
`
`Victoria Sims
`CUNEO GILBERT & LADUCA, LLP
`4725 Wisconsin Avenue, NW, Suite 200
`Washington, DC 20016
`Telephone: (202) 789-3960
`Facsimile: (202) 789-1813
`vicky@cuneolaw.com
`
`Shawn M. Raiter
`LARSON • KING, LLP
`30 East Seventh Street, Suite 2800
`Saint Paul, MN 55101
`Telephone: (651) 312-6518
`Facsimile: (651) 789-4818
`sraiter@larsonking.com
`
`Interim Co-Lead Class Counsel for the
`Reseller Plaintiffs
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`IN RE: HARD DRIVE SUSPENSION
`ASSEMBLIES ANTITRUST
`LITIGATION
`
`Case No. 19-md-02918-MMC
`MDL No. 2918
`
`
`This Document Relates to:
`ALL END-USER AND RESELLER
`ACTIONS
`
`
`INDIRECT PURCHASER PLAINTIFFS’
`OPPOSITION TO DEFENDANTS’ MOTION
`FOR PARTIAL SUMMARY JUDGMENT
`REGARDING FOREIGN COMMERCE
`
`Date: January 13, 2023
`Time: 9:00 AM
`Crtrm: 7, 19th Floor
`Before: Hon. Maxine M. Chesney
`
`
`
`
`
`
`
`
`REDACTED VERSION
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`IPPs’ OPPOSITION TO DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
`Case No. 3:19-md-02918-MMC
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`Case 3:19-md-02918-MMC Document 829 Filed 01/11/23 Page 2 of 37
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`
`TABLE OF CONTENTS
`
`Page(s)
`
`
`TABLE OF AUTHORITIES .......................................................................................................... iii
`GLOSSARY .................................................................................................................................... vii
`STATEMENT OF ISSUES TO BE DECIDED ............................................................................... 1
`INTRODUCTION ............................................................................................................................ 1
`STATEMENT OF FACTS ............................................................................................................... 2
`
`I. Nature of the SA Market ................................................................................................... 2
`
`II. Defendants’ Conspiracy Targeted the U.S. Market.......................................................... 4
`ARGUMENT .................................................................................................................................... 8
`
`I. APPLICABLE LEGAL STANDARDS ........................................................................... 8
`
`II. THE FTAIA DOES NOT BAR IPPS’ CLAIMS ............................................................. 8
`A. Defendants’ Arguments are Contrary to Ninth Circuit Precedent ............................ 9
`
`
`B. IPPs’ Claims Arise from Import Commerce ............................................................ 10
`
`C. The Domestic Effects of the Conspiracy Give Rise to IPPs’ Claims ...................... 13
`1. Defendants’ Anticompetitive Conduct Had a Direct Effect on U.S.
`Commerce ............................................................................................ 14
`2. Defendants’ Anticompetitive Conduct Had a Substantial Effect on U.S.
`Commerce ....................................................................................... 16
`3. IPPs’ Claims Arise from the Domestic Effect of Defendants’
`Anticompetitive Conduct. .................................................................... 18
`III. THE DORMANT COMMERCE CLAUSE HAS NO APPLICATION HERE ........... 19
`IV. IPPS’ CLAIMS DO NOT EXCEED THE SCOPE OF THE STATE STATUTES ..... 23
`V. CONCLUSION ............................................................................................................. 25
`
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`
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) .................................................................................................................. 8
`
`Ass’n des Eleveurs de Canards et d’Oies du Quebec v. Bonta,
`33 F.4th 1107 (9th Cir. 2022) ................................................................................................. 21
`
`Ass'n des Eleveurs de Canards et d'Oies du Quebec v. Harris,
`729 F.3d 937 (9th Cir. 2013) ................................................................................................... 20
`
`Ass'n for Medicines v. Frosh,
`887 F.3d 664 (4th Cir. 2018) ............................................................................................. 20, 22
`
`Barclays Bank PLC v. Franchise Tax Bd.,
`512 U.S. 298 (1994) ................................................................................................................ 22
`
`Biocad JSC v. F. Hoffmann-La Roche,
`942 F.3d 88 (2d. Cir. 2019) ..................................................................................................... 15
`
`California v. ARC America Corp.,
`490 U.S. 93 (1989) ............................................................................................................ 19, 21
`
`Costco Wholesale Corp. v. AU Optronics Corp.,
`No. C13-1207RAJ, 2014 WL 4718358 (W.D. Wash. Sept. 22, 2014) ............................. 10, 15
`
`Exxon Corp. v. Governor of Maryland,
`437 U.S. 117 (1978) ................................................................................................................ 21
`
`F. Hoffmann-LaRoche Ltd, v. Empagran,
`542 U.S. 155 (2004) ........................................................................................................ 1, 8, 21
`
`Global Reinsurance Corp. U.S. Branch v. Equitas Ltd.,
`18 N.Y.3d 722 (2012) ............................................................................................................. 20
`
`Healy v. The Beer Inst.,
`491 U.S. 324 (1989) ................................................................................................................ 20
`
`Illinois Brick Co., v. Illinois,
`431 U.S. 720 (1977) .......................................................................................................... 17, 24
`
`IMS Health Inc. v. Mills,
`616 F.3d 7 (1st Cir. 2010), cert. granted, judgment vacated sub nom. IMS
`Health, Inc. v. Schneider, 564 U.S. 1051, 131 S. Ct. 3091, 180 L. Ed. 2d 911
`(2011) ...................................................................................................................................... 20
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`
`
`In re Air Cargo Shipping Servs. Antitrust Litig.,
`No. MD 06-1775JGVVP, 2008 WL 5958061 (E.D.N.Y. Sept. 26, 2008) report
`and recommendation adopted in part, 2009 WL 3443405 (E.D.N.Y. Aug. 21,
`2009) aff'd, 697 F.3.d 154 (2d Cir. 2012) ............................................................................... 10
`
`In re Brand Name Prescription Drugs Antitrust Litig.,
`123 F.3d 599 (7th Cir. 1997) (Posner, J.) abrogated on other grounds by Rivet
`v. Regions Bank of La., 522 U.S. 470 (1988) .................................................................... 22, 23
`
`In re Capacitors Antitrust Litig. (No. III),
`No. 17-md-02801, 2018 WL 4558265 (N.D. Cal. Sept. 20, 2018) ................................... 10, 13
`
`In re Cathode Ray Tube (CRT) Antitrust Litig.,
`No. C-07-5944, 2016 WL 5725008 (N.D. Cal. Sept. 30, 2016) ............................ 10, 15-16, 18
`
`In re Lorazepam & Clorazepate Antitrust Litig.,
`295 F. Supp. 2d 30 (D.D.C. 2003) .......................................................................................... 23
`
`In re Optical Disk Drive Antitrust Litig.,
`10-md-2143 RS, 2016 WL 467444 (N.D. Cal. Feb. 8, 2016) ................................................. 19
`
`In re Optical Disk Drive Antitrust Litig,
`No. 10-md-2143-RS, 2017 WL 11513316 (N.D. Cal. Dec. 18, 2017) ....................... 10, 13, 15
`
`In re TFT-LCD (Flat Panel) Antitrust Litig.,
`822 F.Supp.2d 953 (N.D. Cal. 2011) ...................................................................... 9, 11, 14, 15
`
`In re TFT-LCD (Flat Panel) Antitrust Litig.,
`No. M 07-1827 SI, 267 F.R.D. 583 (N.D. Cal. 2010), amended in part, 2011
`WL 3268649 (N.D. Cal. July 28, 2011) .................................................................................. 19
`
`In re TFT-LCD (Flat Panel) Antitrust Litig., Nokia Corp. et al. v. AU Optronics
`Corp.,
`Nos. M 07-1827 SI, No. C 09-5609 SI, 2012 WL 3763616 (N.D. Cal. Aug. 29,
`2012) ....................................................................................................................................... 10
`
`In re Vitamin C Antitrust Litig., Animal Science Prods., Inc. v. Hebei Welcome
`Pharm Co.,
`904 F. Supp.2. 310 (E.D.N.Y. 2012)....................................................................................... 11
`
`Japan Line, Ltd. v. Los Angeles Cnty.,
`441 U.S. 434 (1979) ................................................................................................................ 20
`
`K-S Pharmacies, Inc. v. Am. Home Prods. Corp.,
`962 F.2d 728 (7th Cir. 1992) (Easterbrook, J.) ....................................................................... 23
`
`Knevelbaard Dairies v. Kraft Foods, Inc.,
`232 F.3d 979 (9th Cir. 2000) ................................................................................................... 19
`
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`Leegin Creative Leather Prod., Inc. v. PSKS, Inc.,
`551 U.S. 877 (2007) .......................................................................................................... 24, 25
`
`Longaker v. Bos. Sci. Corp.,
`872 F. Supp. 2d 816 (D. Minn. 2012), aff'd, 715 F.3d 658 (8th Cir. 2013) ............................ 20
`
`McBurney v. Young,
`569 U.S. 221 (2013) ................................................................................................................ 20
`
`Minn-Chem, Inc. v. Agrium, Inc.,
`683 F.3d 845 (7th Cir. 2012) ................................................................................................... 18
`
`Motorola Mobility LLC v. AU Optronics Corp.,
`775 F.3d 816 (7th Cir. 2015) .............................................................................................. 17-18
`
`Nat’l Ass’n of Optometrists & Opticians v. Harris,
`682 F.3d 1144 (9th Cir. 2012) ................................................................................................. 21
`
`Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of Univ. of Oklahoma,
`468 U.S. 85 (1984) .................................................................................................................. 24
`
`Nissan Fire & Marine Ins. Co. v. Fritz Companies, Inc.,
`210 F.3d 1099 (9th Cir. 2000) ................................................................................................... 8
`
`NLRB v. Jones & Laughlin Steel Corp.,
`301 U.S. 1 (1937) .................................................................................................................... 22
`
`Pharm. Research & Mfrs. of Am. v. Walsh,
`538 U.S. 644 (2003) ................................................................................................................ 20
`
`Prevent DEV GmbH v. Adient PLC,
`No. 20-cv-13137, 2021 WL 5585917 (E.D. Mich. Nov. 30, 2021) ........................................ 18
`
`Proview Technology Inc., et al. v. AU Optronics Corp, et. Al.,
`C 12-3802 (N.D. Cal. Sept. 25, 2014) ..................................................................................... 11
`
`S.-Cent. Timber Dev., Inc. v. Wunnicke,
`467 U.S. 82 (1984) .................................................................................................................. 20
`
`Sam Francis Found. v. Christies, Inc.,
`784 F.3d 1320 (9th Cir. 2015) ................................................................................................. 21
`
`Shields v. Fed'n Internationale de Natation,
`419 F. Supp. 3d 1188 (N.D. Cal. 2019) .................................................................................. 13
`
`United Phosphorus, Ltd. v. Angus Chem. Co.,
`131 F. Supp. 2d 1003 (N.D. Ill. 2001) .................................................................................... 18
`
`United States v. Anderson,
`326 F.3d 1319 (11th Cir. 2003) ............................................................................................... 13
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`United States v. Hui Hsiung,
`778 F.3d 738 (9th Cir. 2015) ............................................................................................ passim
`
`United States v. LSL Biotechs.,
`379 F.3d 672 (9th Cir. 2004) .............................................................................................. 14-15
`
`Valley Bank of Nevada v. Plus Sys., Inc.,
`914 F.2d 1186 (9th Cir. 1990) ................................................................................................. 20
`
`W. & S. Life Ins. Co. v. State Bd. of Equalization of California,
`451 U.S. 648 (1981) ................................................................................................................ 22
`
`Wickard v. Filburn,
`317 U.S. 111 (1942) ................................................................................................................ 22
`
`Statutes
`
`15 U.S.C. § 6a ................................................................................................................................. 9
`
`15 U.S.C. § 6a (1)-(2) ................................................................................................................... 13
`
`Other Authorities
`
`Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust
`Principles and Their Application, ¶ 1502 (4th ed. 2013) .................................................. 24, 25
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`“Class Periods”
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`“Defendants”
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`“Defs.’ Mtn. for S.J.” or “Motion”
`
`“Defs.’ Mtn. to Dismiss”
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`“Defs.’ Opp. to Adm. Mtn”
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`“EUPs”
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`“EUPs’ Class Cert Mtn.”
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`“EUP Class Period”
`
`“EUPs’ Complaint”
`
`“Ex.”
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`“First MTD Order”
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`“FTAIA”
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`“HDD”
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`“IPPs”
`
`GLOSSARY
`
`EUP and Reseller Class Periods, collectively.
`
`NHK Spring Co. Ltd., NHK International, NHK
`Spring (Thailand) Co., Ltd., NAT Peripheral (Dong
`Guan) Co., Ltd. and NAT Peripheral (H.K.) Co., Ltd.;
`TDK Corporation, Hutchinson Technology Inc.,
`Magnecomp Precision Technology Public Co., Ltd.,
`Magnecomp Corporation, and SAE Magnetics (H.K.)
`Ltd.
`
`Defendants’ Motion for Partial Summary Judgment
`Regarding Foreign Commerce, ECF No. 533/535.
`
`Defendants’ Motion to Dismiss the Second Amended
`Consolidated Class Action Complaint, ECF No. 319.
`
`Defendants’ Opposition to Class Plaintiffs’
`Administrative Motion, ECF No. 590.
`
`End-User Plaintiffs.
`
`End-User Plaintiffs’ Motion for Class Certification,
`ECF No. 605.
`
`January 1, 2003 to May 30, 2016.
`
`End-User Plaintiffs’ Third Amended Complaint, ECF
`No. 558.
`
`Exhibits to Declaration of William V. Reiss in
`Support of Indirect Purchaser Plaintiffs’ Opposition to
`Defendants’ Motion for Partial Summary Judgment
`Regarding Foreign Commerce.
`
`Order Granting Defendants’ Motion to Dismiss End-
`User Plaintiffs’ Consolidated Class Action Complaint
`and Reseller Plaintiffs’ Consolidated Amended
`Complaint, filed October 23, 2020, ECF No. 282.
`
`Foreign Trade Antitrust Improvements Act of 1982,
`15 U.S.C. § 6a.
`
`Hard disk drive.
`
`Indirect Purchaser Plaintiffs.
`
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`“Misuta Decl.”
`
`“Motion to Amend”
`
`“Netz Decl.”
`
`“NHK”
`
`“NHK Plea Agreement”
`
`“NHK Rog Resp. No. 1”
`
`“Okuma Decl.”
`
`“Reiss Decl.”
`
`“Resellers”
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`“Resellers’ Complaint”
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`“Resellers’ Class Cert Mtn.”
`
`“Reseller Class Period”
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`“SAs”
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`“Second MTD Order”
`
`Declaration of Stephen Misuta in Support of
`Defendants’ Motion for Summary Judgment
`Regarding Foreign Commerce, ECF No. 533-3.
`
`End-User Plaintiffs’ Unopposed Motion For Leave To
`Amend The Third Amended Consolidated Class
`Action Complaint, ECF No. 595.
`
`Declaration of Janet S. Netz, Ph.D., in Support of
`End-User Plaintiffs’ Motion for Class Certification,
`ECF No. 605-4.
`
`NHK Spring Co. Ltd., NHK International, NHK
`Spring (Thailand) Co., Ltd., NAT Peripheral (Dong
`Guan) Co., Ltd. and NAT Peripheral (H.K.) Co., Ltd.
`
`Rule 11 Plea Agreement, United States v. NHK Spring
`Co., No. 2:19-cr-20503 (E.D. Mich. Sept.23, 2019),
`attached as Ex. 9 to Declaration of Craig Lee in
`Support of Defendants’ Motion for Partial Summary
`Judgment Regarding Foreign Sales. ECF No. 533-1
`and Ex. 9 to Lee Decl. ECF No. 535-1.
`
`NHK Defendants’ Amended
`Response To End-User Plaintiffs’
`Interrogatory No. 1, dated August 27, 2022
`Declaration of Akira Okuma in Support of NHK
`Defendants’ Motions for Partial Summary Judgment
`on Foreign Commerce, ECF Nos. 533-2, 535-2.
`
`Declaration of William V. Reiss in Support of Indirect
`Purchaser Plaintiffs’ Opposition to Defendants’
`Motion for Partial Summary Judgment Regarding
`Foreign Commerce, filed herewith.
`
`Reseller Plaintiffs.
`
`Reseller Plaintiffs’ Third Consolidated Amended
`Complaint, ECF No. 418.
`
`Reseller Plaintiff’s Motion for Class Certification,
`ECF No. 611.
`
`January 1, 2003 to May 30, 2016.
`
`Hard disk drive suspension assemblies.
`
`Order Granting in Part and Denying in Part.
`
`
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`
`“Sentencing Memo”
`
`“TDK”
`
`“TDK Rog Resp. No. 1”
`
`“Williams Report”
`
`Defendants’ Motion to Dismiss Second Amended
`Consolidated Class Action Complaints, filed
`September 22, 2021, ECF No. 390.
`
`United States Sentencing Memorandum (Dkt. 21),
`United States v. NHK Spring Co., Ltd., No. 2:19-cr-
`20503 (E.D. Mich. Dec. 15, 2019).
`
`Defendants TDK Corporation, Hutchinson
`Technology Inc., Magnecomp Precision Technology
`Public Co., Ltd., Magnecomp Corporation, and SAE
`Magnetics (H.K.) Ltd.
`
`TDK Defendants Second Supplement Responses and
`Objections to End-User Plaintiffs’ Interrogatory No.
`1, dated August 26, 2022.
`
`Report of Dr. Michael A. Williams in Support of
`Reseller Plaintiffs’ Motion for Class Certification,
`ECF No. 606-4.
`
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`STATEMENT OF ISSUES TO BE DECIDED
`Whether Defendants’ Motion should be denied where genuine issues of material fact exist
`that: (a) the FTAIA does not bar IPPs’1 claims because Defendants were engaged in import
`commerce and Defendants’ unlawful conduct had a direct, substantial and reasonably foreseeable
`effect on domestic commerce that proximately caused IPPs’ injury; (b) the dormant Commerce
`Clause does not bar IPPs’ State law claims because the application of state laws does not
`discriminate against interstate commerce, and alternatively, Defendants’ commerce caused injury
`within the relevant States; and (c) the State laws challenged by Defendants do not prohibit IPPs
`from recovering damages for finished products incorporating price-fixed components.
`INTRODUCTION
`“[O]ur courts have long held that application of our antitrust laws to foreign
`anticompetitive conduct is … reasonable,” and reflects a legislative effort “to redress domestic
`antitrust injury that foreign anticompetitive conduct has caused.” F. Hoffmann-LaRoche Ltd, v.
`Empagran, 542 U.S. 155, 165 (2004). Consistent with the FTAIA, IPPs may recover damages
`resulting from Defendants’ overseas sales of price-fixed SAs that were incorporated into finished
`products purchased in the U.S. by IPPs. Defendants’ arguments to the contrary are foreclosed by
`controlling law. Decisions by the Ninth Circuit and courts in the Northern District of California
`have applied the FTAIA to strikingly similar facts and rejected arguments nearly identical to
`those made by Defendants here.
`The Ninth Circuit’s decision in United States v. Hui Hsiung, 778 F.3d 738, 757-60 (9th
`Cir. 2015) (“Hsiung”) demonstrates that Defendants’ conduct, and thus IPPs’ claims, are exempt
`from the FTAIA because Defendants’ conduct constitutes import commerce. As part of
`Defendants’ unified price-fixing scheme – which Defendants concede – they directly imported
`substantial amounts of SAs into the U.S. Defendants negotiated prices in the U.S., participated in
`conspiratorial communications in the U.S., sold SAs to companies they knew incorporated SAs
`into finished products for import to the U.S., and directed their conspiracy at the U.S. import
`market. The Ninth Circuit and other courts have routinely held such conduct exempt from the
`
`
`1 IPPs consist of putative classes of Resellers and EUPs.
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`FTAIA as import commerce.
`The Ninth Circuit in Hsiung also held – contrary to what the Defendants urge here –that
`the fact that conspirators sell a price-fixed component of a finished product abroad does not
`render the effect on domestic commerce indirect under the FTAIA’s “domestic effects”
`exception. 778 F.3d at 757-60. Where U.S. consumers and companies buy finished products in
`the U.S., for which prices have been elevated because their components were sold at collusively
`elevated prices, the FTAIA’s domestic effects exception is met. This is particularly true where,
`like here, IPPs have submitted unrebutted expert reports demonstrating that all or nearly all of
`Defendants’ overcharge was passed-on to IPPs.
`Given that their arguments under the FTAIA are foreclosed by controlling law, it is no
`surprise Defendants resort to radical constitutional and statutory construction arguments not
`supported by any authority (and Defendants cite none). But these arguments fare no better than
`their FTAIA challenge.
`Defendants’ Dormant Commerce Clause Challenge: Under controlling Supreme Court and
`Ninth Circuit precedent, none of IPPs’ state law claims run afoul of the dormant Commerce
`Clause for at least two independent reasons. First, none of IPPs’ state law claims discriminate
`against interstate commerce. Second, all of IPPs’ State law claims seek to redress injury resulting
`from IPPs’ in-state purchases of finished products containing Defendants’ price-fixed SAs. Under
`modern Supreme Court jurisprudence and common sense, the commerce subject to IPPs’ claims
`clearly took place within the applicable States.
`Defendants’ Repackaged Standing Argument: Finally, Defendants’ argument that certain
`of IPPs’ State claims warrant dismissal because products incorporating SAs are in a different
`market than SAs should be rejected for the same reasons the Court previously rejected it and
`because Defendants cite no relevant authority to suggest that IPPs’ claims are barred under
`relevant State law.
`
`STATEMENT OF FACTS
`Nature of the SA Market
`Defendants conspired to fix prices and allocate the market for SAs, a crucial component of
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`I.
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`IPPs’ OPPOSITION TO DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
`Case No. 3:19-md-02918-MMC
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`Case 3:19-md-02918-MMC Document 829 Filed 01/11/23 Page 12 of 37
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`the ubiquitous HDD2 which is in turn used in a variety of end-user electronic products such as
`portable external storage devices, desktop and laptop computers, enterprise servers and storage
`arrays3. HDDs store digitally encoded data on rapidly rotating disks with magnetic surfaces.4 SAs
`“are critical components of HDDs that hold the read/write heads in position above the spinning
`magnetic disks.”5 There is no market for SAs other than as a critical component to the functioning
`of an HDD, as SAs have no independent utility.6
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`.7
`Throughout the Class Periods, Defendants NHK, TDK and HTI controlled well over 95%
`of the global production and sales of SAs.8 Defendants (either themselves or through their
`affiliates) manufactured and sold SAs in the U.S. and elsewhere.9 Defendants manufactured a
`substantial portion of the SAs during the Class Periods
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`Contrary to Defendants’ characterization, the distribution chain for SAs is not complex.12
`At the top of the chain are three HDD makers (i.e., Seagate, Western Digital, and Toshiba) to
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`2 The story of Defendants’ worldwide conspiracy to fix prices and allocate markets for SAs is
`detailed in IPPs’ respective complaints as well as their recently filed motions for class
`certification and accompanying expert reports, which IPPs incorporate herein. See EUPs’
`Complaint ¶¶ 130-185; Resellers’ Complaint ¶¶ 59-71; EUPs’ Class Cert Mtn. at 4-9; Resellers’
`Class Cert Mtn. at 11-15; and the accompanying expert reports of Dr. Janet Netz at 28-34 and Dr.
`Michael Williams ¶¶ 49-77. EUPs have filed an Unopposed Motion to Amend EUPs’ Complaint,
`which, inter alia, seeks to extend the class period commensurate with the EUP Class Period
`defined herein.
`3 See Ex. 1 at 4.
`4 See id.
`5 See Ex. 2 at 1; Ex. 3 at 547.
`6 Ex. 4 (Ong Dep.) 402:9-12; Ex. 5 (Nagata Dep.) 271:24-272:4.
`7 Ex. 6 (Bell Dep.) 383:13-384:12; Ex. 7 (STX0249591-‘9598) at ‘9591-9592, Ex. 8
`(STX0076811-‘6843) at ‘6822.
`8 Netz Decl. at 8; Netz Decl. Ex. 4; Ex. 9.
`9 See NHK Plea Agreement ¶ 4 (b); Okuma Decl. ¶¶ 8, 23; Misuta Decl. ¶¶ 3-7, 27.
`10 Netz Decl. at 20; Netz Decl. Ex. 15. This figure excludes protypes sold by Defendants.
`11 Defendants’ data indicates the sale of
` directly into the U.S., including
`over
`. Netz Decl. at 38; Netz Decl. Ex. 18.
`12 Netz Decl. at 13; Netz Decl. Ex. 10.
`3
`IPPs’ OPPOSITION TO DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
`Case No. 3:19-md-02918-MMC
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`which Defendants sold their SAs.!? HDD makers in turn sold external HDDsdirectly to end-users
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`or Resellers, and sold bare HDDs directly to consumers, or to OEMsthat incorporated them into
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`storage devices (e.g., EMC, NetApp, IBM) or computers (e.g., Acer, Dell, Lenovo).!* These
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`finished goods were then sold to Resellers, and to EUPseither directly, or via Resellers,i.e.
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`distributors (e.g., Avnet, Arrow, Synnex), “big box”resellers (e.g., Best Buy, Staples, Costco), or
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`online merchants (e.g., Amazon, Dell, Newegg).!° As a result, most SAs “travel through a few
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`levels” of a straightforwarddistribution chain before being purchased by IPPs.'®
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`Il.
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`Defendants’ Conspiracy Targeted the U.S. Market
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`No matter the distribution channel, Defendants’ price-fixing cartel expressly targeted the
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`U.S. market, and its effects were substantial and direct. Defendants knew their conspiracy would
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`impact U.S. commerce and intended that result.!’ Indeed, NHK admitted as muchin its plea
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`agreement. 18
`Defendants’a. Seagate and Western Digital, were headquartered in
`(he S"a
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`13 Netz Decl. at 14; Netz Decl. Ex. 10; Williams Report, at 941.
`14 Tq. at 14-15; Ex. 10 at 3231; Williams Report §f 41, 46.
`15 Netz Decl. at 14-17; Williams Report § 46.
`16 Td. at 13; Netz Decl. Ex. 10.
`17 See, e.g., Ex. 11 (Ishiguro Dep.) 252:14-253:24; Ex. 12 (McHone Dep.) 311:21-312:8, 317:18-
`318:11; Ex. 13 (Misuta Dep.) 91:17-97:1, 187:10-15, 191:19-193:13; Ex. 14 (Drahos Dep.)
`274:21-279:4; Ex. 15 (TDKHDD002056649-‘6650) at “6649.
`'8 NHK Plea Agreement§ 4(c) & (d) (“During the relevant period, the conspiracy involved and
`had a direct, substantial, and reasonably foreseeable effect on interstate and import trade and
`commerce.”). Consistent with NHK Spring’s guilty plea, the TDK Defendants applied for
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`Enhancement and Reform Act of 2004 x.
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`20 Ex. 12 (McHone Dep.y222: 14-27:24; Ex. 18 (Sanders Dep.) 399:18-406:11; Ex. 19 (Isom Dep.)
`Pp.
`386:13-387:11, 389:21-396:19; Ex. 20 (NHKI-M-001241 16)at slide 7; Ex. 21 (Johnson Dep.)
`40:25-42:13, 47:10-49:15. In addition to Seagate and Western Digital, Hitachi Global Storage
`Technologies, a former Hitachi subsidiary that made HDDsand was acquired by Western Digital,
`was headquartered in San Jose, CA. See Press Release, Hitachi, Hitachi Establishes “Hitachi
`Global Storage Technologies,” Taking a bold new Step for Storage Innovation (Jan. 6, 2003),
`https://www.hitachi.com/New/cnews/E/2003/0106a/ (Last accessed October 10, 2022). Samsung
`Information Systems America Inc., which conducted R&D for HDDs was headquartered in San
`Jose, CA. See Press Release, Samsung, Samsung Electronics Announces NewSilicon Valley
`R&D Center (Sept. 19, 2012), https://www.businesswire.com
`4
`IPPs’ OPPOSITION TO DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
`Case No. 3:19-md-02918-MMC
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`/news/home/20120919005456/en/Samsung-Electronics-Announces-New-Silicon-Valley-RD-
`Center (Last accessed October 10, 2022).
`21 Ex. 18 (Sanders Dep.) 55:6-9, 57:24-58:17, 406:18-407:20
`22 Ex. 4 (Ong Dep.) 23:1-9; Ex. 12 (McHone Dep.) 14:25-16:5, 22:14-27:24; Ex. 22 (Nass Dep.)
`178:8-181:24, 223:19-224:10; Ex. 21 (Johnson Dep.) 40:25-42:13, 47:10-49:15; Ex. 23 (Harvey
`Dep.) 93:21-97:17; Ex. 24 (NHKI-M-00044912) at Slide 38; Ex. 25 (Otake Dep.) 67:19-72:20;
`Ex. 26 (Inami Dep.) 16:5-18:9, 21:10-15, 24:6-25:12, 65:13-22; Ex. 17 (Saika Dep.) 17:14-20:19,
`369:1-370:15; Ex. 27 (NHKI-M-00022655-‘2659) at ‘2656; Ex. 28 (Kiriya Dep.) 10:6-11:7, 31:1-
`7, 232:13-233:16, 234:18-235:13; Ex. 29 (Tsutsui Dep.) 71:23-74:7.
`23 Ex. 23 (Harvey Dep.) 89:3-93:9, 96:3-97:17, 307:4-11; Ex. 12 (McHone Dep.) 274:7-275:18,
`282:18-283:22, 302:10-304:14; Ex. 25 (Otake Dep.) 67:19-72:20; Ex. 17 (Saika Dep.) 382:6-
`384:20; Ex. 30 (Pselos Dep.) 47:8-14, 123:20-125:2; Ex. 22 (Nass Dep.) 178:8-181:24.
`24 Ex. 31 (NHKS-M-00009680_EN).
`25 Ex. 32 (Dhawan Dep.) 26:12-29:16; Ex. 4 (Ong Dep.) 21:23-25:19, 30:4-16; Ex. 13 (Misuta
`Dep.) 293:13-294:6; Ex. 33 (Kamigama Dep.) 190:11-192:5; Ex. 34 (NHKI-M-00081021-‘1022)
`at ‘1021.
`26 See Ex. 35 (TDKHDD006018641) at slide 72; Ex. 65 (Fujiwara Dep.) 321:2-322:24 (Fujiwara
`took regular trips to U.S. because
`”).
`27 Ex. 36 (Arimur