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U.S. lawsuit alleging SD memory card price-fixing is revived

A visitor looks at a SanDisk microSD card at the Mobile World Congress in Barcelona February 25, 2014. REUTERS/Gustau Nacarino
A visitor looks at a SanDisk microSD card at the Mobile World Congress in Barcelona February 25, 2014. REUTERS/Gustau Nacarino

By Jonathan Stempel

(Reuters) - A federal appeals court has revived an antitrust lawsuit by consumers who accused Panasonic Corp, SanDisk Corp and Toshiba Corp of conspiring to fix prices for memory cards that are widely used in tablet computers, cellular phones and digital cameras.

The 9th U.S. Circuit Court of Appeals in San Francisco said a trial judge erred in concluding that the plaintiffs waited too long to sue the defendants, which control an estimated 70 percent of the market for secure digital memory cards, or SD cards. A licensing entity, SD-3C LLC, was also a defendant.

Circuit Judge Richard Paez said the four-year statute of limitations under the Clayton Act did not apply because the alleged violations were "continuing" each time the defendants sold new SD cards, and because it would have been "speculative" that there was any harm before those sales were made.

"Plaintiffs should not be penalized for failing to foresee earlier that they would enter the market for SD cards and would therefore be harmed by defendants' conduct," Paez wrote for a three-judge 9th Circuit panel on Wednesday.

Lawyers for the consumers and the defendants did not immediately respond to requests for comment.

According to the plaintiffs, the alleged violations stemmed from a 2006 licensing agreement that enabled Panasonic, Samsung and Toshiba to set a "fair market price" for SD cards, and imposed royalties on cards sold by other manufacturers.

The lawsuit was filed in March 2011, but was brought on behalf of purchasers of SD cards in the prior four years. It sought a halt to the alleged price-fixing, as well as damages.

Wednesday's decision reversed a May 2012 dismissal by U.S. District Judge Jeffrey White in San Francisco of the plaintiffs' federal and statute antitrust claims. It returned the case to his court for further proceedings.

On April 4, the 9th Circuit revived a lawsuit in which Samsung Electronics Co, which had been making royalty payments for SD cards, accused Panasonic and SD-3C of restraining competition for the product.

The consumer case is Oliver et al v. SD-3C LLC et al, 9th U.S. Circuit Court of Appeals, No. 12-16421.

(Reporting by Jonathan Stempel in New York; Editing by Howard Goller, Bernard Orr)

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