9th Circ. Sends CRT Settlement Back To Correct Error

A California federal judge will reconsider a $576.8 million bundle of antitrust settlements after the Ninth Circuit on Wednesday remanded a certification order and settlement approval for a class of indirect cathode ray tube purchasers.

The appellate court’s order follows a Nov. 8 admission by U.S. District Judge Jon S. Tigar that he was wrong to deny recovery to indirect purchasers in three states: Massachusetts, Missouri and New Hampshire. Judge Tigar said the original settlement carried the specter of conflict of interest because the plaintiffs’ lead counsel pitted one set of clients’ claims against those of another in order to obtain a favorable result for the majority of the class.

As a result of the effort, the Ninth Circuit said Wednesday the mistake “necessarily affects the remaining issues on appeal,” including the adequacy of the representation provided to parties in the case and the fees awarded to the plaintiffs’ lead counsel.

“This is a very powerful and clear statement from the appellate court that the shenanigans that took place in this litigation are unacceptable,” said Robert Bonsignore of Bonsignore Trial Lawyers PLLC, an attorney for parties objecting to the settlement. “From my perspective what they have done has been unacceptable constitutionally from day one.”

Judge Tigar said Nov. 8, “with the benefit of hindsight,” that the district court erred in approving the original settlement, which is now pending before the Ninth Circuit.

The multidistrict litigation, which has also seen settlements with direct purchasers, centers on claims the companies divvied up the cathode ray tube market and cut down on supply to boost prices of CRTs used in televisions and computer monitors from early 1995 through late 2007. Judge Tigar approved the last of the deals in July 2016, amid objections by indirect purchasers in Massachusetts, Missouri and New Hampshire, and two state attorneys general.

In his November ruling, Judge Tigar rejected a bid by the main group of indirect purchasers for an “indicative ruling” showing if he’d be willing to carve out $6 million from the original deal’s $158.6 million attorneys’ fees award in order to provide settlement cash for residents of Massachusetts, Missouri and New Hampshire, who were excluded from the settlements. In addition, he expressed “concerns about the adequacy of the counsel who negotiated that settlement or whether they may have faced a conflict of interest.”

“While the court acknowledges lead counsel’s efforts to obtain a favorable result for the majority of the class, pitting one set of clients’ claims against those of another is a classic indication of a potential conflict of interest,” Judge Tigar said, referring to Ninth Circuit oral arguments in April where class counsel, fighting objectors from the excluded states contesting the settlements, said they needed to release the claims of some class members to get compensation for others.

“Even now, lead counsel appears to be bargaining with the court to reduce the perceived value of the claims of class members in the omitted repealer states. And regardless of whether the issue is framed as one of conflict of interest or adequacy of counsel, it requires further exploration and potentially the appointment of separate counsel,” Judge Tigar continued.

The class first sought the indicative ruling in October, with the stated intention of asking the Ninth Circuit for a “limited remand” if the judge said he’d be willing to carve out the $6 million for the excluded states. The bid was in reaction to heavy criticism from the appeals panel over the settlement’s exclusion of people in those states.

The idea was to avoid an appellate decision on the challenge to settlements between the indirect purchasers and the electronics companies — including Philips Electronics North America Corp., Panasonic Corp. and Samsung SDI Co. Ltd. — that would resolve consolidated MDL.

The objectors are represented by John Crabtree of Crabtree & Auslander LLC, Robert Bonsignore of Bonsignore Trial Lawyers PLLC, and Polly Estes of Estes Law Group.

The indirect purchasers are represented by Mario Alioto, Joseph Patane and Lauren C. Capurro of Trump Alioto Trump & Prescott LLP.

The cases are Indirect Purchaser Plaintiffs v. John Finn et al., case numbers 16-16368, 16-16371, 16-16373, 16-16374, 16-16377, 16-16378, 16-16379, 16-16399 and 16-16400, in the U.S. Court of Appeals for the Ninth Circuit. The underlying case is MDL No. 1917 In re: Cathode Ray Tube (CRT) Antitrust Litigation, case number 3:07-cv-05944, in the U.S. District Court for the Northern District of California.

–Additional reporting by Bryan Koenig. Editing by Breda Lund.For a reprint of this article, please contact [email protected].

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