Antitrust Law Daily Claims of conspiracy to fix prices for hard disk drive suspension assemblies headed to San Francisco
Wednesday, October 9, 2019

Claims of conspiracy to fix prices for hard disk drive suspension assemblies headed to San Francisco

By Jeffrey May, J.D.

Purchasers allege a global conspiracy to fix prices and allocate markets for the ubiquitous electronic parts.

The Judicial Panel on Multidistrict Litigation (JPML) consolidated for pretrial proceedings 20 lawsuits and pending tag-along actions, arising out of an alleged global conspiracy to fix prices of and allocate market shares for hard disk drive (HDD) suspension assemblies. The actions shared complex factual questions about the alleged eight-year conspiracy. Centralization in the Northern District of California was determined to be appropriate because common documents and witnesses were likely located in that district (In re Hard Disk Drive Suspension Assemblies Antitrust Litigation, October 8, 2019, Vance, S.).

Among other firms, the suits name Japan-based TDK Corporation and NHK Spring Co., Ltd., which are reportedly the leading manufacturers of HDD suspension assemblies, with a combined worldwide market share of approximately 90 percent. Both firms have U.S. subsidiaries. HDD Suspension Assemblies are a component of HDDs, which are used to store electronic information in devices, such as desktop computers, laptops, gaming consoles, and MP3 players, or are sold as stand-alone storage devices.

The challenged conduct lasted from approximately May 2008 through at least April 2016. Antitrust authorities around the world, including the Japanese Fair Trade Commission (JFTC), the U.S. Department of Justice Antitrust Division, and the Brazil's CADE, have launched investigations into allegations that the defendant companies colluded to fix prices of HDD suspension assemblies, according to the plaintiffs.

In July, the Department of Justice announced that NHK had agreed to plead guilty to fixing prices for suspension assemblies used in hard disk drives. The company agreed to pay a $28.5 million criminal antitrust fine. In 2018, the JFTC issued a cease and desist order to both TDK and NHK and found that they substantially restrained competition in the HDD suspension assemblies market by agreeing to maintain sales prices.

Three of the suits to be transferred were filed in the Eastern District of Michigan. They were brought on behalf of putative classes of purchasers of HDD suspension assemblies who purchased the items indirectly as a stand-alone replacement product or as a component part of an electronic device. These actions were filed by CMP Consulting Services, Inc.Integrity Financial Services of Tampa Bay Inc.; and a private person—Ferzula Elmazi. In addition to a transferred action originally filed in the Southern District of New York, there are potential tag-along actions that were filed in the Northern District of California, the Eastern District of Michigan, and the District of Minnesota.

The parties in the suits agreed on centralization; however, they could not agree on a transferee forum. The JPML decided on the federal district court in San Francisco because two hard disk drive manufacturers are headquartered in the Northern District of California. Senior District Judge Maxine M. Chesney will oversee the multidistrict litigation.

The case is MDL No. 2918.

Attorneys: Hollis L. Salzman (Robins Kaplan LLP) for Ferzula Elmazi. Diana Gjonaj (Weitz & Luxenberg, PC) for Integrity Financial Services of Tampa Bay Inc. Darryl Bressack (Fink Bressack) for CMP Consulting Services, Inc. Cari Campen Laufenberg (Keller Rohrback LLP) for Anthony Cimino.

Companies: Integrity Financial Services of Tampa Bay Inc. d/b/a Integrity Financial Services; CMP Consulting Services, Inc.; TDK Corp.; Magnecomp Precision Technology Public Co. Ltd.; SAE Magnetics [H.K.] Ltd.; NHK Spring Co. Ltd.; NHK International Corp.; Hutchinson Technology Inc.; Headway Technologies, Inc.

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