CRT Indirect Buyers Seek Fee-Share After 9th Circ. Pushback

By Bryan Koenig

Indirect buyers of cathode ray tubes from three states originally excluded — allegedly inappropriately by class counsel — from a $576.8 million bundle of antitrust settlements with technology giants such as Philips, Panasonic and LG may get a cut after all, following pushback from a Ninth Circuit panel in April.

The class of indirect purchaser plaintiffs referred Monday to Circuit Judge Richard Clifton’s admonition in oral arguments that it’s a “problem” that they secured the nationwide deals without looking out for people in Massachusetts, New Hampshire and Missouri. Their solution was to ask the California federal court judge Monday for an “indicative ruling” to say how he’d rule on tweaking the settlements by peeling off $6 million from a $158.6 million attorneys’ fee award, and to ask the Ninth Circuit itself to pause the appeal while the lower court thinks it over.

“IPPs’ proposal to supplement the net settlement fund from IPP counsel’s fee award, and amend the plan of distribution to allow class members in the three states to file claims, will ensure that class members in the three states receive the same level of compensation as class members in the 22 states,” they said in the district court brief seeking an indicative ruling.

“IPPs’ proposal will further ensure that the impact of the amended plan of distribution on existing claimants, if any, will be de minimis,” they continued. “As such, if this court amends the fee order and the plan of distribution consistent with IPPs’ proposal, it will address the Ninth Circuit’s concerns and moot the remaining appeals.”

Judge Clifton’s comments came during a hearing on an objectors’ appeal of $577 million worth of settlements between indirect purchasers and electronics companies — including Philips Electronics North America Corp., Panasonic Corp. and Samsung SDI Co. Ltd. — that would resolve consolidated multidistrict litigation.

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

The objectors appealed the rulings to the Ninth Circuit, and three attorneys representing them argued during the April hearing that lead class counsel Mario Alioto of Trump Alioto Trump & Prescott LLP committed legal malpractice by dropping lead plaintiffs in the states from the litigation right before reaching the settlements.

The objectors’ attorneys also argued that Alioto had wrongly claimed that consumers in those states didn’t have viable claims, even though he had a duty to represent everyone in the class and vigorously prosecute their claims. They also challenged the massive attorneys’ fee award, saying Alioto’s hourly bill-rate multiplier was based on “nothing but theater.”

On Monday, the indirect buyers proposed taking a small chunk of that award, $6 million, and applying it to the settlement fund instead. If the district judge indicates he’ll sign off, the buyers said they’d ask the Ninth Circuit for “a limited remand” to implement the tweak.

According to the indirect buyers, they’ve resolved the appeals of four groups of objectors while three more out of the original seven remain. The objectors, according to the appeals brief, plan to oppose pausing the appeal.

Despite the planned opposition, the indirect buyers told the Ninth Circuit that $6 million will be enough to compensate class members in the three states, based on findings from the senior vice president of an economic and financial consultancy pegging eligible claims in those three jurisdictions at $5.05 million, “based on empirical data from the claims experience to date, and assuming that claims by class members in the three states are compensated at the same level as existing claims in the 22 states.”

The $6 million, according to the Ninth Circuit brief, should, therefore, be adequate to cover claims from those three states at the same rate as others, “without any dilution of the claims of existing claimants.” The senior vice president, Jonathan Schwartz of Nathan Associates Inc., estimates that even if the three states come in at double his estimate, existing claimants would have their claims reduced by under $0.05 per unit or less than 1 percent, according to the brief.

Counsel for the indirect buyers did not immediately respond Wednesday to a press inquiry.

An attorney for the objectors, Robert Bonsignore of Bonsignore Trial Lawyers PLLC, blasted the proposal Wednesday, calling it “too little, too late.”

According to Bonsignore, the three states were excluded thanks to fundamental errors on the part of class counsel, who he said repeatedly failed to send out an initial demand required under Massachusetts law and claimed to have been unable to find anyone who bought a television or computer during the class period in Missouri or New Hampshire

Bonsignore also specifically pointed to the hundreds of millions of dollars bound for the other states.

“The math doesn’t add up,” he said.

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 Trump Alioto Trump & Prescott LLP.

The appellate 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 Dorothy Atkins, Matthew Perlman, Jimmy Hoover and Eric Kroh. Editing by Dipti Coorg.

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