August 12, 2019

Advocacy groups and academics have assailed Qualcomm for trying to duck certification of an antitrust class estimated at 250 million U.S. consumers, telling the Ninth Circuit in amicus briefs that the chipmaker was attempting to “manufacture a policy conflict among state antitrust laws” to evade application of California law to a national class.

The American Antitrust Institute on Friday filed one of four amicus briefs supporting consumers against Qualcomm’s appeal of class certification. In it, the group, which advocates for robust antitrust enforcement, blasted Qualcomm’s attempts to claim that California’s Cartwright Act cannot be applied to the nationwide class because unlike California, many states haven’t created carveouts to the prohibition on federal law antitrust damages claims from so-called indirect purchasers.

“This court should reject Qualcomm’s effort to manufacture a policy conflict among state antitrust laws,” the AAI said.

According to the brief, “choice-of-law” rules mandate that claims over Qualcomm’s licensing practices be weighed under California laws, unless the company can show a conflict with the laws of other states. But the AAI maintains there is no conflict as it charted the differences between states that still follow the indirect purchaser bar created by the U.S. Supreme Court’s 1977 ruling in Illinois Brick Co. v. Illinois, and those who’ve repealed it.

“Follower states and repealer states are in harmony on substantive antitrust policy, and substantive considerations have primacy in conflict analysis. Follower and repealer states also are in harmony on remedial policy; they merely differ as to who may sue, which does not create a conflict under the governmental interest test,” the AAI said.

Nonprofit legal group Public Justice, civil justice bar organization the American Association for Justice, and the left-leaning Open Markets Institute made similar arguments in their own amicus brief filed Friday. Qualcomm is a California company being sued for allegedly anti-competitive conduct in that state, they said.

Among other things, the three groups argued that the class shares more than enough common traits to be unified, and they lashed out at an amicus brief filed by the U.S. Department of Justice that argued that California law shouldn’t override the laws of other states that bar indirect purchaser claims. They argued that even if other states keep the indirect purchaser bar in place to encourage businesses, that has no bearing on liability imposed on Qualcomm for activities in the state of California.

“At its core, DOJ’s insistence that California has no legitimate interest in applying its laws to this class reflects a fundamental hostility to how California has chosen to regulate its resident businesses,” the groups said.

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U.S. District Judge Lucy Koh ordered class certification in September 2018, covering anyone in the U.S. who purchased cellphones containing certain modem chipsets between February 2011 and the present.

Economic experts for the buyers estimate the class could include up to 250 million members who suffered up to $5.54 billion in damages.

The buyers are attacking the same licensing practices that the FTC targeted with an enforcement action against Qualcomm, alleging the company uses its dominance over chips needed for cellular connectivity to drive up the licensing payments it receives from cellphone makers for standard-essential patents.

Judge Koh found in favor of the FTC in May, issuing an injunction that could force Qualcomm to renegotiate many of its existing license agreements. Qualcomm is seeking to stay the injunction while it appeals that ruling to the Ninth Circuit as well.

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An attorney for Public Justice, the AAJ and the Open Markets Institute criticized the size arguments in an interview Monday. Public Justice’s Leslie A. Brueckner argued, like the amicus brief, that class action status is meant precisely to group together large numbers of plaintiffs. Brueckner argued that the Chamber of Commerce and Washington Legal Foundation are pursuing an orchestrated effort to “destroy class actions in America.” Friday’s amicus brief, she said, is meant to combat that “systematic attempt.”

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Public Justice PC, the American Association for Justice and the Open Markets Institute are represented by Leslie A. Brueckner and Stephanie K. Glaberson of Public Justice, Jeffrey R. White and Amy L. Brogioli of the AAJ, Sandeep Vaheesan of the Open Markets Institute and Richard A. Koffman, Emmy L. Levens and Bo Uuganbayar of Cohen Milstein Sellers & Toll PLLC.

The complete article can be viewed here.