On Wednesday, Qualcomm, a widely-used cell phone chip manufacturer, won its bid to decertify an antitrust class against it. A three-judge panel of the US Court of Appeals for the Ninth Circuit found that the trial court in the District of Northern California erred in certifying the class and remanded the case to reconsider certification of the class and to examine the case under FTC v. Qualcomm, a recently-decided antitrust case.
The plaintiffs in this case sought to certify a class of more than 250 purchasers of smartphones in the United States that contain Qualcomm chips, alleging that Qualcomm violated the Cartwright Act, California’s antitrust law. The suit was brought under the Cartwright Act instead of the federal antitrust laws because smartphone owners are indirect purchasers of smartphone chips and are barred from suit by the US Supreme Court’s decision in Illinois Brick Co. v. Illinois, which required that direct purchasers, such as smartphone manufacturers, be the ones to sue under federal antitrust law. California’s Cartwright Act has no such requirement.
The class that plaintiffs sought to certify contained consumers from all fifty states. In order to certify a class, the trial court must find that class members are similarly situated and that common questions predominate their cases. The Ninth Circuit found that this was not the case in the proposed class action because the consumers were not all located in California. The court found that other states had an interest in pursuing any potential case under their own state antitrust laws, which do not all mirror California’s Cartwright Act.
The Northern District of California will reconsider class certification before the case continues.
