Qualcomm Class Action Seeks Certification Appeal

Qualcomm cell phone purchasers have argued that the question of class certification would be better managed in the U.S. District Court, rather than in the Ninth Circuit.

U.S. District Court Judge Lucy Koh granted class certification in September 2018 and Qualcomm immediately appealed the opinion, which they subsequently won in January 2019.

The Qualcomm class action involves claims by consumers who allege that the company overpriced its electronic chips to cell phone manufacturers, thus placing the extra cost onto indirect cell phone buyers.

The cell phone customers argue that Qualcomm was able to jack up the costs of cell phones because the company controls a major part of the market for chipsets.

The plaintiffs brief states, “In seeking to certify a nationwide class, plaintiffs provided overwhelming evidence that antitrust liability, impact, and damages could be determined using common, class-wide evidence.”

In arguing their case, the plaintiffs note that they provided the court with 1,400 pages of evidence from four expert witnesses.  In addition, the plaintiffs argue that they provided the court with numerous depositions from Qualcomm and other witnesses.

The customers allege that, “The district court meticulously examined the evidence, reports and briefing in a 66-page order certifying a class of nationwide purchasers.”

The customers argue that Qualcomm’s brief on appeal does not even touch the issues of Judge Koh order, “behaving as if this appeal is an opportunity to re-argue its original positions subject to de novo review.”

The brief also notes that Qualcomm does not argue that common law issues prevail in terms of whether the company violated California and federal law.  In addition, the cell phone customers’ brief stated that Qualcomm didn’t go after the plaintiffs expert witness who calculated the overcharge that was placed against the customers.

The cell phone customers claim that Qualcomm decided to instead focus its energy on their economics expert, Dr. Kenneth Flamm, who determined that the overcharge to consumers damaged the plaintiffs.

The plaintiffs’ brief states that Dr. Flamm’s opinions show that cell phone customers would have paid lower prices if Qualcomm had not engaged in their anti-competitive conduct.

“Dr. Flamm used a hedonic regression formula to determine the effect upstream costs had on downstream cell phone prices, adjusting for quality—a well-established methodology that Qualcomm’s own experts employed in the FTC’s investigation,” the plaintiffs’ Qualcomm class action brief notes.

Judge Koh found Dr. Flamm’s expert witness testimony admissible.

The customers argue that any arguments against Dr. Flamm’s expert witness testimony goes to the weight of the evidence and not its admissibility.

“If Qualcomm’s arguments are correct, and they are not, Qualcomm can use them to try to defeat plaintiffs’ claims on summary judgment or at trial. But they are irrelevant for class certification,” the cell phone customers’ brief argues.

The brief also states, “Qualcomm’s appeal fails to grapple with the district court’s reasoning at all, let alone demonstrate that its findings on focal-point pricing and similar issues were “illogical, implausible, or without support” in the record.”

The consumers are represented by Kalpana Srinivasan, Marc M. Seltzer, Steven G. Sklaver, Amanda K. Bonn, Oleg Elkhunovich, Krysta Kauble Pachman, Chelsea Samuels and Catriona Lavery of Susman Godfrey LLP; Joseph W. Cotchett, Adam J. Zapala, Mark F. Ram and Michael A. Montaño of Cotchett Pitre & McCarthy LLP; and Steve W. Berman, Jeffrey D. Friedman and Rio S. Pierce of Hagens Berman Sobol Shapiro LLP.

The Qualcomm Mobile Phone Appellate Case is Stromberg, et al. v. Qualcomm Inc., Case No. 18-80135, in the U.S. Court of Appeals for the Ninth Circuit.

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