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Class Counsel Seek $66M in Fees in $160M Capacitor Antitrust Case

June 24, 2022 | Posted in : Fee Request, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law 360 story by Dave Simpson, “Attys Seek $66M Fee in $160M Capacitor Maker Antitrust Deal" reports that attorneys for a class of direct purchasers of capacitors asked a California federal court Thursday to approve $66 million in fees as a part of a proposed settlement in which Nippon Chemi-Con and its U.S. subsidiary would pay $160 million to end antitrust claims.

While the fee request amounts to 40% of the settlement fund, the attorneys noted that the newest proposed settlement would bring the overall recovery in the case to more than $604 million, and the newest fee request would bring total attorneys' fees to more than $187 million. When taken in totality, and if approved, attorneys would recover a bit over 31% of all the proposed settlements in the case, the attorneys noted.

The motion also notes that, in the Ninth Circuit, the benchmark for percentage of recovery awards is 25% of the total settlement award, which can be adjusted up or down.

"The complexity of this case, the significant benefits achieved for the class and the excellent work performed support an upwards adjustment," the direct pursers said Thursday.

This latest deal was struck in December, just before closing arguments in a federal trial, by a class of about 1,800 U.S. companies with Japan-based Nippon Chemi-Con Corp. and its U.S. subsidiary United Chemi-Con. It ended a weekslong jury trial over claims that more than 20 capacitor manufacturers carried out a price-fixing conspiracy from 2002 to 2014 and owed refunds of $427 million.

The litigation dates back to July 2014, when Chip-Tech Ltd. filed the first suit in the consolidated case.

The products at issue are electrolytic capacitors, which are fundamental in the operation of all electronic circuit boards, including those in computers, televisions, car engines and smartphones.

The case initially went to trial in March 2020 but was derailed by the COVID-19 pandemic. Shortly after a mistrial was declared, direct purchasers reached a $232 million settlement with Panasonic, AVX and other companies accused of overcharging as a result of the conspiracy.

Japan-based Matsuo Electric Co. Ltd., Nippon Chemi-Con and United Chemi-Con went to trial again in late November over claims that they owed refunds of $427 million.

Midtrial, however, Matsuo reached a $5 million settlement with the class, leaving NCC and UCC as the remaining defendants.

NCC has pled guilty to separate criminal charges for its role in the conspiracy.

At trial, class counsel presented deposition testimony from industry insiders stating that capacitor companies regularly held meetings in which they swapped price information. The class's damages expert, statistician James T. McClave, testified in person that the conspiracy elevated prices for capacitors above the competitive level.

Industry insiders testified about a host of issues putting pressure on the manufacturers by driving their costs up, including yen appreciation and rising crude oil prices.

Jurors also heard Ikuo Uchiyama, former CEO and chairman of NCC, invoke the Fifth Amendment in declining to answer questions about his involvement in the conspiracy during a video deposition.

The capacitor makers' expert witness, economist Laila Haider, testified that she estimated the overcharges resulting from the price-fixing conspiracy to be about $66 million, though Haider presented no alternative damages figure in her expert report.

Haider, vice president of the consulting firm Charles River Associates, said the damages model by the class's expert witness "yields nonsensical overcharge results." She said the overcharges incurred as a result of the price-fixing conspiracy would not be $427 million, as McClave had testified, but did not say how she reached the $66 million figure.

U.S. District Judge James Donato granted the class' bid to strike Haider's testimony, finding her $66 million alternative damages theory had not previously been disclosed.

When the parties informed the court that they had reached a settlement, Judge Donato — who has overseen the case for about seven years — told them that, by this point, he had heard most of the evidence and had his own sense of what constitutes an appropriate settlement amount.

"I'm advising you," Judge Donato said, "that if the settlement is too low, it will not be approved."

"I'll tell you $5 million is not going to fly," the judge added, referring to the deal Matsuo struck to settle out of the case midway through the trial.

On Thursday, the attorneys touted the overall recovery as greater than the total alleged overcharges.

"This is a large amount of money relative to the settling defendants' individual and collective capacitor sales to class members between 2002 and 2014 and is over 141.4% of the total overcharges ($427,530,613) as calculated by the class's expert — an extraordinary result," the attorneys said. "Courts have approved equal or higher upward adjustments from the benchmark in cases where the settlement was a much lesser percentage of single damages."