In re Refrigerant Compressors Antitrust Litig.

92 F.Supp.3d 652

In re REFRIGERANT COMPRESSORS ANTITRUST LITIGATION.

Case No. 2:09–md–02042.

United States District Court, E.D. Michigan, Southern Division.

Signed March 13, 2015.

Brett A. Rendeiro, Varnum, Riddering, Novi, MI, Daniel S. Bitton, Axinn Veltrop & Harkrider, James M. Andriola, Reed Smith LLP, New York, NY, Fred K. Herrmann, Matthew L. Powell, Kerr, Russell, Detroit, MI, John W. Allen, Varnum, Riddering, Kalamazoo, MI, John Dequedville Briggs, Axinn, Veltrop & Harkrider LLP, Washington, DC, Thomas Gerard Rohback, Axinn, Veltrop & Harkrider, LLP, Hartford, CT, Elizabeth A. McGovern–MDL Not Admitted, Reed Smith, Philadelphia, PA, for Defendants.

OPINION & ORDER

SEAN F. COX, District Judge.

The Indirect Purchaser and Direct Purchaser putative class action cases in this multidistrict litigation (“MDL”) proceeding have been resolved. All that remains in this MDL proceeding is Plaintiff General Electric Company's (“GE”) individual claims. GE asserts claims against Defendants Danfoss A/S, Danfoss Flensburg GmbH, and Danfoss, LLC (collectively the “Danfoss Defendants”). GE is pursuing its claims against the Danfoss Defendants on its own behalf after having opted out of the Direct Purchaser Class Action Settlement.¹

The matter is currently before the Court on a “Motion By Defendants Danfoss Flensburg GMBH And Danfoss LLC To Dismiss The Complaint” (Docket Entry No. 470/64) which asserts several grounds for relief. The parties have briefed the issues. The Court finds that oral argument would not aid the decisional process at this time.

For the reasons set forth below, with respect to GE's federal antitrust conspiracy claims, the Court: 1) declines to rule on two issues (whether GE has federal antitrust standing to assert claims based on MABE purchases and whether those purchases are barred under the Foreign Trade Antitrust Improvement Act) until after the parties have had the opportunity to file supplemental briefs addressing the Seventh Circuit's recent decision in Motorola Mobility LLC v. AU Optronics Corp., 775 F.3d 816 (7th Cir.2015) ; 2) rules that GE is not entitled to tolling under the “American Pipe tolling doctrine;” 3) rules that GE is entitled to Section 5(i) tolling; 4) rejects Defendants' argument that GE cannot pursue damages for the time period after February 2009; and 5) rules that GE has sufficiently alleged fraudulent concealment for the time period preceding September 2006.

With respect to GE's state-law fraud and conspiracy claims, the Court: 1) rules that GE's state-law fraud claim is barred by the applicable statute of limitation; and 2) rejects Defendants' statute of limitations challenge to the state-law conspiracy count.

Finally, the Court finds Defendant Danfoss Flensburg GmbH's personal jurisdiction challenge without merit.

BACKGROUND

There is a lengthy history to this MDL proceeding. The Court includes here only those facts that are relevant for the purposes of the pending motion.

GE filed its Complaint on February 15, 2013, in the United States District Court for the Western District of Kentucky, Louisville Division. The action was transferred to this Court by a June 17, 2013 Order of the United States Judicial Panel on Multidistrict Litigation, which transferred the action to this Court for inclusion in the coordinated or consolidated pretrial proceedings in this MDL proceeding, which began in 2009.

GE's eighty-three page Complaint asserts claims against three different groups of Defendants: 1) the “Embraco Defendants,” which include Whirlpool Corporation, Whirlpool S.A., and Embraco North America, Inc.; 2) the “Danfoss Defendants,” which include Danfoss A/S, Danfoss Flensburg GMBH, and Danfoss, LLC; and 3) the “ACC Defendants,” which include Household Compressors Holding SpA, and ACC USA, LLC. GE's Complaint summarizes the nature of the action as follows:

1. This lawsuit arises from a long-standing cartel created, maintained, and enforced by the Defendants and their co-conspirators (collectively, the “Conspirators”) for anticompetitive acts and behavior. They have agreed to, and in fact did, illegally inflate, raise, fix, and artificially stabilize the price of refrigerant compressors sold in the United States and elsewhere in the world. The Defendants also have agreed to, and in fact did illegally, restrict capacity, restrict innovation, stabilize market shares, allocate customers, territories, and product types, and otherwise restrain competition in the manufacture and sale of refrigerant compressors in the United States and elsewhere in the world. The result of the Conspirators' conduct has been to raise the prices paid by their customers, including Plaintiff, to supra-competitive levels, reducing the attractiveness of their customers' products in terms of price and quality, and thereby damaging their customers' businesses. The cartel started at least as early as January 1, 1996 and the cartel and its effects will continue at least into 2013 (the “conspiracy period”). The exact dates of the conspiracy period are not known to Plaintiff, but are likely to be revealed during the course of discovery in this litigation.

2. A refrigerant compressor, in the context of this case, is a device that compresses a refrigerant gas. When the gas is later permitted to expand, it absorbs and thereby transfers heat, producing a cooling effect used in a wide variety of refrigeration products. For example, refrigerant compressors are used in household refrigerators, in which the compressors are part of the system that creates cold air that keeps food fresh or frozen.

3. During the conspiracy period, Defendants and their co-conspirators Tecumseh and Panasonic have dominated the global and U.S. markets for refrigerant compressors. Indeed, the three largest suppliers to the U.S. market—Embraco, Panasonic, and Tecumseh—had as of 2008 a collective market share in the United States of approximately 85%.

4. Plaintiff General Electric Company is one of the largest manufacturers and sellers of refrigeration equipment in the United States. As such, it is one of the largest purchasers of refrigerant compressors in the United States. Plaintiff General Electric Company has been a target and a victim of the Conspirators' cartel. In particular, Plaintiff is one of the largest manufacturers of household refrigerators in the United States and globally, and throughout the conspiracy period, household refrigerators manufactured and/or sold by Plaintiff have included refrigerant compressors supplied by Conspirators. As a result of the cartel, Plaintiff has paid supra-competitive prices for compressors and has been deprived of innovation that would have resulted in increased efficiency, as well as increased sales and profits, in its sales of refrigerators and other refrigeration equipment.

(Compl. at 1–2).

GE's Complaint alleges a longer conspiracy period than did the Direct Purchaser or the Indirect Purchaser Plaintiffs—one that begins in 1996.

GE's Complaint asserts three causes of action: 1) “Violation of Section 1 of the Sherman Act, 15 U.S.C. § 1,” its First Cause of Action; 2) “Fraud,” its Second Cause of Action; and 3) “Conspiracy,” its Third Cause of Action.

GE's Complaint contains allegations regarding “MABE purchases” that are relevant to issues in the motion. GE's Complaint alleges that, throughout the conspiracy period, “GE has been a minority owner of a joint venture named Controladora Mabe, S.A. de C.V. (‘MABE’).” (Compl. at ¶ 46). GE alleges that “[d]uring the conspiracy period (and today), GE has owned (and today owns) slightly more than 48% interest in MABE. GE also has minority representation on MABE's board of directors, and a veto right with respect to some” unspecified “categories of board decisions.” (Id. ).

GE alleges that as part of its joint venture relationship with GE, during the conspiracy period MABE has manufactured residential refrigerators for GE for sale in the United States pursuant to contract manufacturing agreements between GE and Mabe. (Compl. at ¶ 47). It also alleges that GE's procurement teams in the United States have controlled and determined the price and quantity of refrigerant compressors MABE has incorporated into refrigerators it has manufactured for sale by GE in the United States.

STANDARD OF DECISION

When ruling on a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the court must construe the complaint in a light most favorable to the plaintiff and accept all the well-pleaded factual allegations as true. Evans–Marshall v. Board of Educ., 428 F.3d 223, 228 (6th Cir.2005). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1948, 173 L.Ed.2d 868 (2009). Although a heightened fact pleading of specifics is not required, the plaintiff must bring forth “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

In determining whether to grant a Rule 12(b)(6) motion, the court primarily considers the allegations in the complaint, although matters of public record, orders, items appearing in the record of the case and exhibits attached to the complaint may also be taken into account. Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir.2001) (citing Nieman v. NLO, Inc., 108 F.3d 1546, 1554 (6th Cir.1997) ).

ANALYSIS

The Motion to Dismiss filed by Danfoss Flensburg and Danfoss LLC contains several challenges to GE's Complaint.

I. Challenges To GE's Ability To Assert Claims for Mabe's Compressor Purchases

During the course of briefing the pending motion, Defendants raised the issue of whether GE has federal antitrust standing to assert claims based on MABE purchases and whether those purchases are barred under the Foreign Trade Antitrust Improvement Act, 15 U.S.C. § 6(a) (the “FTAIA”).

After the primary briefs had been filed, both parties continued to seek...