Qualcomm Class Action Defense Cases–Lorenzo v. Qualcomm: California Federal Court Dismisses Antitrust Class Action Complaint Against Qualcomm For Lack Of Standing And Failure To Adequately Plead Damage

Aug 13, 2009 | By: Michael J. Hassen

Class Action Alleging Antitrust And State Law Violations Against Qualcomm Warranted Dismissal because Plaintiff Lacked Standing to Prosecute Clayton Act/Cartwright Act Antitrust Claims and Failed to Adequately Plead Damage Resulting from Defendant’s Conduct California Federal Court Holds

Plaintiff filed a putative class action against Qualcomm alleging inter alia violations of state and federal antitrust laws, as well as violations of California’s Unfair Competition Law and Unfair Practices Act; specifically, the class action complaint “challenged the lawfulness of Qualcomm’s licensing practices with respect to its intellectual property used for Code Division Multiple Access (‘CDMA’) wireless technology.” Lorenzo v. Qualcomm Inc., ___ F.Supp.2d ___ (S.D.Cal. August 10, 2009) [Slip Opn., at 1-2]. Defense attorneys moved to dismiss the class action; the district court granted the motion, finding in part that plaintiff lacked standing under the Clayton Act because his injury was “too remote from Qualcomm’s alleged antitrust violations” and because “the Complaint fails to allege sufficient facts to support a finding that Plaintiff’s alleged injury is inextricably intertwined with Qualcomm’s unlawful conduct so as to fit within the narrow exception to the market participant requirement.” Id., at 2. But the court gave plaintiff leave to file an amended class action complaint, which he did. Id., at 2-3. Defense attorneys again moved to dismiss the class action, id., at 3; the district court granted the motion without leave to amend but without prejudice.

After setting forth the standard of review, see Lorenzo, at 3-4, the district court turned to the issue of standing under the Clayton Act, id., at 4. Because the amended class action complaint, like the original complaint, alleged that “there are at least three intermediaries – CDMA chipset manufacturers, CDMA device manufacturers, and CDMA device vendors – between Plaintiff’s injury and the alleged antitrust violations,” id., at 5-6, plaintiff’s injury remained too remote to support a Clayton Act claim, id., at 6. The district court granted the motion to dismiss the unfair practice act claims because plaintiff’s allegations in the amended class action complaint were identical to those in the original complaint, id., at 7. And dismissed the unfair competition law claim because plaintiff lacked standing as he had not adequately alleged that he suffered any damage as a result of the alleged representations made by Qualcomm. Id., at 7-10. Accordingly, the district court dismissed the class action complaint without leave to amend. Id., at 11. However, as explained in the Note, it dismissed the action without prejudice, id.

NOTE: Plaintiff asked the district court to postpone ruling on the motion to dismiss until the Ninth Circuit issued its ruling in In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 536 F.Supp.2d 1129 (N.D. Cal. 2008), which involves an interlocutory appeal from the dismissal of a Cartwright Act claim for lack of standing. Lorenzo, at 5. The district court denied that request, but dismissed the class action “without prejudice and with leave to reopen” in the event the Ninth Circuit reversed the district court order in DRAM, id., at 6.

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