SanDisk Flash Memory Antitrust Class Action Survives Motion to Dismiss

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A judge has kept a flash memory antitrust class action lawsuit alive, arguing that manufacturer SanDisk did not adequately demonstrate that the plaintiffs lacked Article III standing and noted that some of their other concerns were better suited for discussion during the class certification stage.

In the third amended complaint, the bankruptcy estate representative for the company acting as the lead plaintiff alleges that it bought millions of dollars of flash memory products manufactured by SanDisk with artificially raised price prices due to alleged violations of the Sherman Antitrust Act. These involve the use of patents and a licensed joint venture with Toshiba Corporation.

SanDisk attempted to draw distinction between the raw NAND flash memory as well as the finished products, which can include USB memory sticks and other small storage devices. The plaintiffs sought, prior to the motion to dismiss the class action lawsuit, to submit a fourth amended complaint which would create two Classes, one for people who bought the finished products such as USB stick and one for those who directly purchased the flash memory itself before incorporating it into another product.

However, SanDisk argued that because the company had never actually bought any of the unfinished memory products, they could not seek to represent that Sub-Class. The judge decided that was unnecessary at this stage, but would rather be more important at the certification stage of the class action lawsuit. Further, there are common questions of fact because the alleged Sherman Antitrust Act violations would have a similar effect on pricing.

Moreover, the motion for a fourth amended complaint was valid despite several objections from the defendants. It was timely, according to order denying the motion to dismiss the class action lawsuit, and SanDisk’s legal team failed to adequately describe what effort, if any, it would need to provide further information during discovery regarding the direct purchasers and that the common questions of fact would be very similar.

Summing up, the order noted that “from the outset of this litigation, Ritz has alleged that it purchased tens of millions of dollars of flash memory products from SanDisk” which were allegedly overpriced due to antitrust activities by SanDisk and Toshiba through their patent collections.

The Class is represented by lawyers from Morgan Duffy-Smith & Tidalgo LLP, Kellogg Huber Hansen Todd Evans & Figel PLLC, Berry Law PLLC and Stueve Siegel Hanson LLP.

The SanDisk Flash Memory Antitrust Class Action Lawsuit is Guiliano, et al. v. SanDisk Corp., et al., Case No. 4:10-cv-02787, in the U.S. District Court for the Northern District of California.