SanDisk Moves to Block Flash Memory Antitrust Class Certification

On Oct. 22, SanDisk Corp. asked  the federal judge presiding over the flash memory antitrust class action lawsuit lodged against the tech company to deny Class certification to SanDisk retailers and consumers who allege SanDisk used its flash memory patents to monopolize the industry. The company argues the plaintiffs who purchased SanDisk’s flash memory have failed to prove that common issues predominate the flash memory antitrust Class.

In their motion to deny certification for the SanDisk flash memory antitrust class action lawsuit, SanDisk claimed that CPM Electronics Inc. and Ritz Camera & Image LLC, two of the named flash memory retailer plaintiffs, have failed to fully plead their antitrust claims. According to SanDisk, because the companies have not met their burden of proof that common questions predominate all elements of the antitrust class action lawsuit, CPM and Ritz fail to meet pleading standards for Class certification, as well as claims of violation under the Sherman Act.

According to the SanDisk flash memory antitrust class action lawsuit, SanDisk argues, “Plaintiffs rely entirely on their economic expert, Dr. Ryan Sullivan, to meet their burden. Dr. Sullivan failed, however, to demonstrate that common questions predominate as to whether there has been an antitrust violation because he failed to demonstrate that market power can be established with common proof across six product markets over four years.”

The tech company further contests the plaintiff retailers do not possess a model to demonstrate to the court that an antitrust impact and subsequent alleged damages can be established on a classwide basis, stating that Dr. Sullivan’s model is flawed.

The SanDisk flash memory antitrust class action lawsuit was first filed in federal court by Ritz in 2010. Ritz alleged SanDisk had illegally obtained two patent keys for its flash memory department. The plaintiff claims SanDisk achieved these fraudulent patents by neglecting to disclose knowledge of prior art and other forms of misrepresentation to the U.S. Patent and Trademarks Office. When SanDisk allegedly enforced those flash memory patents against its tech competitors, Ritz claims SanDisk established a monopoly, which caused Ritz and other retailers to pay competitive prices for flash memory products.

U.S. District Judge Jeremy Fogel denied SanDisk’s motion to dismiss the flash drive antitrust class action lawsuit, ruling that Ritz did not lack standing where the antitrust claims were concerned. According to the 1965 Supreme Court decision in the case of Walker Process Equipment v. Food Machinery & Chemical Corp., should a company enforce fraudulently obtained patents said company may be held liable for antitrust claims.

The federal Circuit Court upheld Judge Fogel’s ruling in November 2012 and allowed the SanDisk antitrust class action lawsuit to move forward in California federal court. Additionally, last month the presiding California federal judge denied SanDisk’s motion to dismiss the whole class action lawsuit, stating that Ritz sufficiently supported its claim of harm by Sandisk’s alleged flash memory monopoly.

Ritz and CPM are seeking certification for a SanDisk flash memory antirust Class, which would include direct purchasers of SanDisk flash memory products within the U.S. from July 1997 until December 2009. The court later limited the Class Period start date to be June 2006.

CPM Electronics Inc., Ritz Camera & Image LLC, and the proposed Class are represented by 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 Giuliano, 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.