Sony Electronics, Inc. v. Hannstar Display Corp.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN RE: TFT-LCD (FLAT PANEL) No. 14-15916

ANTITRUST LITIGATION,

__________________________ D.C. Nos. 3:12-cv-02214-SI SONY ELECTRONICS, INC.; SONY 3:07-md-10827-SI

COMPUTER ENTERTAINMENT

AMERICA, LLC,

Plaintiffs-Appellants, OPINION

v.

HANNSTAR DISPLAY

CORPORATION,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Susan Illston, District Judge, Presiding

Argued and Submitted August 8, 2016 San Francisco, California

Filed September 1, 2016 IN RE: TFT-LCD (FLAT PANEL) ANTITRUST LITIG.

Before: J. Clifford Wallace and Susan P. Graber, Circuit Judges, and Barbara M. G. Lynn,* Chief District Judge.

Opinion by Judge Graber Dissent by Chief Judge Lynn

SUMMARY**

Law of Privilege

The panel reversed the district court’s order denying plaintiff’s motion for summary judgment in plaintiff’s action to enforce a settlement agreement, and remanded.

The parties engaged a mediator to resolve a price-fixing dispute, and the mediator proposed settlement in an email exchange. Both parties accepted by email, but…

Dissent by Chief Judge LYNN

OPINION

Plaintiffs Sony Electronics, Inc., and Sony Computer Entertainment America, LLC (collectively “Sony”), and Defendant HannStar Display Corporation engaged a mediator to resolve a price-fixing dispute. The mediator proposed settlement in an email exchange. Both parties accepted by email. But HannStar' refused to comply, and Sony sued to enforce the agreement. The district court denied Sony’s motion for summary judgment, holding that the California Evidence Code’s mediation privilege bars introduction of the settlement emails. The parties stipulated to a final judgment, and this appeal followed. We review denovo, Padfield v. AIG Life Ins. Co., 290 F.3d 1121, 1124 (9th Cir. 2002), and reverse and remand. We hold that federal, rather than California, privilege law applies.

This case stems from a major price-fixing scheme and long-running litigation. E.g., In re TFT-LCD (Flat Panel) Antitrust Litig., 637 Fed.Appx. 981 (9th Cir. 2016) (unpublished) (consolidating appeals of price-fixing suits). HannStar Display Corporation is a Taiwanese company in the business of manufacturing and selling LCD panels and products. Sony is an electronics company,…

dissenting:

I respectfully dissent.

The question of whether to apply this Court’s holding in Wilcox v. Arpaio, 753 F.3d 872 (9th Cir. 2014), should be analyzed against the backdrop of the claims pending in a lawsuit when the admission of the evidence is sought. In this case, only state law claims remained at the time Sony sought to admit evidence of the email exchange, in support of its motion for summary judgment. Because at that time the action no longer involved any federal issue, the evidence could not relate to a federal claim.

The district court thus correctly determined that state privilege law governed and that California Evidence Code § 1123(b) precluded admission of the email exchange, and the resulting settlement contract. Fair v. Bakktiari, 40 Cal.4th 189 , 51 Cal.Rptr.3d 871 , 147 P.3d 653 (2006). For these reasons, I dissent.