A. Frost v. Lg Electronics, Inc. ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 3 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
A. FROST; JOSE RA, individually and on No. 18-16188
behalf of all others similarly situated,
D.C. Nos. 5:16-cv-05206-BLF
Plaintiffs-Appellants, 5:16-cv-05586-BLF
5:16-cv-05673-BLF
v.
LG ELECTRONICS, INC.; LG MEMORANDUM*
ELECTRONICS USA, INC.; SAMSUNG
ELECTRONICS COMPANY, LTD.;
SAMSUNG ELECTRONICS AMERICA,
INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Beth Labson Freeman, District Judge, Presiding
Argued and Submitted January 22, 2020
San Francisco, California
Before: W. FLETCHER and R. NELSON, Circuit Judges, and MOLLOY,**
District Judge.
The parties are familiar with the facts of this case and the record, so we do
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Donald W. Molloy, United States District Judge for
the District of Montana, sitting by designation.
not review them in detail here. Broadly, Plaintiffs’ Second Amended Consolidated
Class Action Complaint (“SAC”) alleges that beginning on January 1, 2005,
Defendants entered into a global conspiracy not to poach each other’s employees
in violation of Section 1 of the Sherman Act and the equivalent antitrust laws of
California and New Jersey.
The district court dismissed the SAC, finding that Plaintiffs failed to
plausibly allege the existence of a conspiracy. Relatedly, the district court granted
LG Electronics, Inc.’s motion to dismiss for lack of personal jurisdiction,
reasoning that because the sole basis of personal jurisdiction alleged by Plaintiffs
was the conspiracy, dismissal for lack of personal jurisdiction was necessarily
required. We review both decisions de novo and affirm.
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires “a short and
plain statement of the claim showing that the pleader is entitled to relief.” The
Supreme Court has held that plaintiffs must put forth:
enough factual matter (taken as true) to suggest that an agreement was made.
Asking for plausible grounds to infer an agreement does not impose a
probability requirement at the pleading stage; it simply calls for enough fact
to raise a reasonable expectation that discovery will reveal evidence of
illegal agreement.
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007). Building upon
Twombly and its companion case, Ashcroft v. Iqbal, 556 U.S. 662 (2009), we have
held that to state a claim for antitrust conspiracy, plaintiffs must allege “‘who, did
2
what, to whom (or with whom), where, and when?’” In re Musical Instruments &
Equip. Antitrust Litig., 798 F.3d 1186, 1194 n.6 (9th Cir. 2015) (quoting Kendall v.
Visa U.S.A., Inc., 518 F.3d 1042, 1048 (9th Cir. 2008)).
In the context of antitrust conspiracy claims, plaintiffs may meet their
burden by alleging parallel conduct among competitors and certain “plus factors”
suggesting a conspiracy. In re Musical Instruments, 798 F.3d at 1194.
Alternatively, plaintiffs may meet their burden by putting forth direct evidence of
an agreement. Id. at 1193. To meet the direct evidence standard, however, the
evidence must explicitly support the asserted proposition without requiring any
inference. See In re Citric Acid Litig., 191 F.3d 1090, 1093–94 (9th Cir. 1999).
Applying the foregoing law, Plaintiffs’ SAC fails to plausibly allege a
conspiracy. First, Plaintiffs do not allege parallel conduct in conjunction with plus
factors tending to show agreement. Instead, they rely on various statements made
by defendants’ employees and by a recruiter affiliated with Samsung as direct
evidence of agreement. But each of these statements requires inferences in order
to support the existence of a conspiracy and are, therefore, not direct evidence.
Considered collectively, the statements and all the plausible inferences that can be
drawn from them do not establish “who, did what, to whom (or with whom),
where, and when?” Kendall, 518 F.3d at 1048. Additionally, we note that because
Plaintiffs have failed to plausibly allege agreement, they have also failed to
3
plausibly allege that LG Electronics, Inc. is subject to personal jurisdiction in the
United States.
AFFIRMED.
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FILED
Frost, et al. v. LG Electronics, et al., No. 18-16188 MAR 3 2020
MOLLY C. DWYER, CLERK
MOLLOY, District Judge, concurring: U.S. COURT OF APPEALS
I am not convinced that Kendall v. Visa U.S.A., Inc., 518 F.3d 1042 (9th Cir.
2008), is a proper application of the pleading standard set forth in Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662(2009). But as binding law in this Circuit, Kendall compels the result in this case.
For that reason, I concur.
FILED
Frost v. LG Electronics, Inc., No. 18-16188
MAR 3 2020
W. FLETCHER, J., dissenting: MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
I respectfully dissent. Plaintiffs—two former employees of LG Electronics
U.S.A., Inc.—allege that LG and Samsung entered into an agreement not to hire
employees from one another. They describe in their complaint statements to that
effect by employees of LG and Samsung subsidiaries. Although those statements
do not reflect the precise temporal or geographical scope of the alleged unlawful
agreement, I conclude they are enough to plausibly “suggest that an agreement was
made.” Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1047 (9th Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). If Kendall is read to
require dismissal of plaintiffs’ complaint, it is inconsistent with the Supreme
Court’s decision in Twombly.
I would reverse the judgment of the district court and remand for further
proceedings.