Lithium Ion Batteries Antitrust Litigation

Docket numbers: 13-md-02420 (N.D. Cal.); 17-17367, 21-15120, 21-15138, 21-15200 (9th Cir.) 

In this antitrust price-fixing case, the first round of settlements included a nationwide class indirect purchasers of lithium ion batteries in a variety of electronic equipment. Only about 26 states provide a cause of action for such indirect purchasers, however, and under federal law such purchasers do not have a cause of action.

As a result, a nationwide class of indirect purchasers unfairly disadvantages–and dilutes the recovery of–those indirect purchasers who have a legal cause of action in violation of Rule 23. One of the disadvantaged class members, Frank Bednarz, objected to the class certification and settlement fairness.

The district court approved the settlement on October 27, 2017.

“The class certification here not only ran roughshod over fundamental differences in state law, but contradicted Supreme Court and Ninth Circuit precedent, and the district court’s own analysis,” said CCAF Director of Litigation Ted Frank. “This is no mere technicality, but one that cost class members tens of millions of dollars.”

Bednarz has appealed to the U.S. Court of Appeals to the Ninth Circuit, and the oral argument occurred August 28, 2019 (video).

On September 16, Bednarz prevailed in an unpublished memorandum, the Ninth Circuit remanded to the district court, finding the explanation for settlement approval legally deficient. The district court is instructed to conduct a “more fulsome analysis.”

On remand, Bednarz has objected to plaintiffs’ request for unreasonably high attorneys’ fees for time spend on the appeal. The appeal is class counsel’s own fault, and the class should not have to pay for attorneys fighting against their interests.

Second Round Settlements

Meanwhile, a second round of settlements has been reached against additional defendants. Unlike the first round of settlements, these would only provide 10% of the settlement fund to the states that do not have a cause of action for indirect antitrust claims, which avoids the unfairness of handing class members with no meritorious claims perhaps half of the settlement value. However, Bednarz also filed another objection mainly directed to the fee request expected from plaintiffs’ attorneys. The new objection argues that the market rate for attorneys’ fees is embodied by the sealed bid one of the firms submitted at the outset of the case. Bednarz argues than appropriate fee should be no higher than the one reflected in the sealed bid, and certainly not 30% of the $113 million megafund achieved to date. Objections to the Second Round Settlements were denied.

The district court declined to consider the sealed bid and again awarded attorneys’ fees Bednarz regards as unreasonable. HLLI appealed again. The opening brief was filed July 19, 2021, arguing: (1) Ninth Circuit law required the district court to use Hagens Berman’s fee bid as the “starting point for determining a reasonable fee,” and the district court erred in refusing to consider it at all; (2) the district court erred when it ignored the law of the case and held there was no conflict by denying the existence and effectiveness of class counsel’s advocacy for a pro rata distribution plan; and (3) because the district court found that Bednarz created a $10 million benefit for repealer-state class members, it erred when it held it could not quantify the benefit of Bednarz’s appeal and could not award a percentage of the benefit. The Ninth Circuit heard oral argument on October 18, 2022 and affirmed in an unpublished order on November 16.

Bednarz declined to appeal further. Still, due to his objection, the class members like Bednarz who in states that allow actions for indirect purchasers receive vastly more recovery from the proposed order of distribution. The court has not yet entered the distribution order.

This case was formerly a project of the Competitive Enterprise Institute and now is being actively litigated by the Hamilton Lincoln Law Institute.

Case Documents