SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO

Transcription

1 KAMALA D. HARRIS Attorney General of the State of California J. MATTHEW RODRIQUEZ Chief Assistant Attorney General KATHLEEN E. FOOTE (SBN 65819) Senior Assistant Attorney General ESTHER LA (SBN ) Deputy Attorney General ADAM MILLER (SBN ) Deputy Attorney General 455 Golden Gate A venue, Suite San Francisco, California Telephone: (415) Facsimile: (415) Adam.Miller@doj.ca. gov Attorneys for Plaintiffs SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO I THE PEOPLE OF THE STATE OF CALIFORNIA, ex rel. KAMALA D. HARRIS, Attorney General of the State of California, as parens patriae on behalf of natural persons residing in the state, and in its law enforcement capacity, THE STATE OF CALIFORNIA, ALAMEDA COUNTY, CITY OF LONG BEACH, CITY OF LOS ANGELES, CITY OF OAKLAND, CITY OF SAN DIEGO, CITY AND COUNTY OF SAN FRANCISCO, CITY OF SAN JOSE, CONTRA COSTA COUNTY, CORONA NORCO UNIFIED SCHOOL DISTRICT, ELK GROVE UNIFIED SCHOOL DISTRICT, FRESNO COUNTY, GARDEN GROVE UNIFIED SCHOOL DISTRICT, KERN COUNTY, LOS ANGELES COUNTY, LOS ANGELES UNIFIED SCHOOL DISTRICT, ORANGE COUNTY, SACRAMENTO COUNTY, SAN DIEGO CITY UNIFIED SCHOOL DISTRICT, SAN FRANCISCO UNIFIED SCHOOL DISTRICT, SAN JOAQUIN COUNTY, SAN JUAN UNIFIED SCHOOL DISTRICT, SAN MATEO COUNTY, SANTA CLARA COUNTY, SONOMA Case No.: CGC FlRST AMENDED COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF BASED ON: (1) VIOLATIONS OF THE CARTWRIGHT ACT (Bus. & Prof. Coile 16720, et seq.) (2) VIOLATIONS OF THE UNFAIR COMPETITION ACT (Bus. & Prof. Code 17200, et seq.). 1 (3) UNJUST ENRICHMENT DEMAND FOR JURY TRIAL First Amended Complaint for Damages and Injunctive Relief Based on Cartwright Act, Unfair Competition, and Unjust.Enrichment

2 ...: 1 1 COUNTY, TULARE COUNTY, VENTURA COUNTY, and THE 2 REGENTS OF THE UNIVERSITY OF CALIFORNIA, 3 Plaintiffs, 4 v. 5 AU OPTRONICS CORPORATION; 6 AU OPTRONICS CORPORATION AMERICA, INC.; CHIMEI INNOLUX 7 CORPORATION; CHI MEl OPTOELECTRONICS USA; CMO JAPAN 8 CO., LTD.; EPSON IMAGING DEVICES CORPORATION; HANNSTAR DISPLAY 9 CORPORATION; HITACHI, LTD.; HITACHI DISPLAYS, LTD.; HITACHI. 10 ELECTRONICS DEVICES (USA), INC.; HYDIS TECHNOLOGIES CO., LTD.; LG 11 DISPLAY CO., LTD.; LG DISPLAY AMERICA, INC.; SAMSUNG 12 ELECTRONICS CO., LTD.; SAMSUNG SEMICONDUCTOR, INC.; SAMSUNG 13 ELECTRONICS AMERICA, INC.; SHARP CORPORATION; SHARP 14 ELECTRONICS CORPORATION; TOSHIBA CORPORATION; TOSHIBA 15 MOBILE DISPLAY CO., LTD.; TOSHffiA AMERICA ELECTRONICS 16 COMPONENTS, INC.; TOSHIBA AMERICA INFORMATION SYSTEMS, 17 INC.; and DOES 1 through 100, Defendants.. Plaintiffs, by and through Kamala D. Harris, as Attorney General of the State of California, allege as follows: I. INTRODUCTION 1. This action arises from multiple indictinents of and admissions of guilt by members of an international cartel to fix the price of thin film transistor liquid crystal display ("LCD") panels. As of July 2010, the United States Department of Justice ("USDOJ") has obtained guilty pleas for the price fixing conspiracy from seven companies, which have collectively been sentenced to pay or have agreed to pay criminal fines totaling more than $890 million. LCD is a type of display technology utilized in products including televisions ("TVs"), computer monitors, 2

3 1 laptops, mobile phones, digital cameras, and numerous other electronic products. LCD panels are 2 the dominant form of display screen in the TV, computer monitor, and laptop industries Plaintiffs bring this action by and through the Attorney General of the State of 4 California ("Attorney General"). Plaintiffs are as follows: a) the Attorney General in the name of 5 the people of the State of California, as parens patriae on behalf of natural pers~ms residing in the 6 state, pursuant to California Business and Professions Code section 16760, and in its law 7 enforcement capacity pursuant to California Business and Professions Code sections et 8 seq.; b) the State of California, in a proprietary capacity on its own behalf; and c) specified 9 political subdivisions and public entities in the State of California. Plaintiffs purchased LCD 10 panels separately or as part of other products. Plaintiff government entities are expressly 11 excluded from classes certified in direct and indirect purchaser federal class action litigation 12 pe1;1ding in the United States District Court for the Northern District of California, IN RE TFT- 13 LCD (FLAT PANEL) ANTITRUST LITIGATION, Master File No. C SI (the "Class 14 Actions"). By fixing the price oflcd panels, Defendants caused consumers of LCD products to. 15 pay more for products containing LCD panels, to receive less valuable LCD panels in those 16 products, or to be unable to purchase LCD products due to supracompetitive pricing. 17 l8 3. II. JURISDICTION AND VENUE. This Court has subject matter jurisdiction over all causes of action alleged in this 19 Complaint pursuant to the California Constitution, Article VI, 10, and is a Court of competent 20 jurisdiction to grant the relief requested. Plaintiffs, claims for violation of Business & Professions 21 Code and 17200, et seq. and for unjust enrichment, arise under the laws of the State of 22 California, are not preempted by federal law, do not challenge conduct within any federal 23 agency's exclusive domain, and are not statutorily assigned to any other trial court Each defendant transacts business in the State of California. The unlawful conduct 25 pursuant to or in furtherance of the combination or conspiracy occurred in substantial part within 26 the State of California and was intended to and did substantially affect business and commerce 27 within this State. First Amended Complaint for Damages and Injunctive Relief Based on Cartwright Act, Unfair Comp~tition, and Unjust Enrichment 3

4 j 1 I 1 5. Venue is proper in this Court pursuant to California Code of Civil Procedure sections and 395.5, and California Business & Professions Code sections and Defendants conduct substantial business in the City and County of San Francisco. The injuries 4 that have been sustained as a result of Defendants' illegal conduct occurred in part in the City aj?-d 5 County of San Francisco. 6 III. DEFINITIONS 7 6. "Thin Film Transistor Liquid Crystal Display" ("LCD") means the display 8 technology that involves sandwiching a liquid crystal compound between two glass plates called 9 "substrates." The resulting panel contains hundreds or thousands of electrically charged dots, 10 called pixels, that form an image. This pariel is then combined with a backlight unit, a driver, and 11 other equipment to create a "module" allowing the panel to operate and be integrated into a TV, 12 computer monitor or other produet "LCD panel" refers to the particular kinds of LCD panels that are used in LCD 14 products "LCD products" means the following products of which LCD panels are a 16 component: TV s, computer monitors, laptop computers, and cell phones "Original Equipment Manufacturer"'("OEM") means any original equipment 18 manufacturer of LCD products. OEMs include, but are not limited to, Apple Computer, Inc.; 19 Compaq Computer Corp.; Dell Inc.; Gateway Inc.; Hewlett... Packard; and International Business 20 Machines Corp. ("IBM"). 21 IV. THEPARTIES A. Plaintiffs Plaintiffs are a) the Attorney General, in the name of the people of the State of 24 California, as parens patriae on behalf of natural persons residing in the state who are consumers 25 that purchased LCD panels, or LCD products separately or as part of other LCD products, and in 26 its law enforcement capacity; b) the State of California; and c) the following specified political 27 subdivisions or public agencies in the state of California, that have been given written notice, First Amended Complaint for Damages and Injunctive Relief Based on Cartwright Act; Unfair Competition, ~d Unjust Enrichment 4

5 1 pursuant to California Business and Professions Code section 16750(c), of the Attorney-General's 2 intention to bring this Complaint on their behalf: - 3 (1) Plaintiff Alameda County; 4 (2) Plaintiff City of Long Beach; 5 (3) Plaintiff City of Los Angeles; 6 ( 4).Plaintiff City of Oakland; 7 (5) Plaintiff City of San Diego; 8 (6) Plaintiff City and County of San Francisco; 9 (7) Plaintiff City of San Jose; 10.(8) Plaintiff Contra Costa County; 11 (9) Plaintiff Corona-Norco Unified School District; 12 (10) PlaintiffElk. Grove Unified School District; 13 (11) Plaintiff Fresno County; 14 (12) PlaintiffGardenGrove Unified School District; 15 (13) PlaintiffKern County; 16 (14) Plaintiff Los Angeles County; 17 (15) Plaintiff Los Angeles Unified School District; 18 (l6) Plaintiff Orange County; 19 (17) Plaintiff Sacramento County; 20 (18) Plaintiff San Diego City Unified School District; 21 (19) Plaintiff San Francisco Unified School District; 22 -(20) Plaintiff San Joaquin County; 23 (21) Plaintiff San Juan Unified School District; 24 (22) Plaintiff San Mateo County; 25 (23) Plaintiff Santa Clara County; 26 (24) Plaintiff Sonoma County; 27 (25) Plaintiff Tulare County; (26) PlaintiffVentura County; and 5 i

6 (27) Plaintiff Regents of the University of California. B. Defendants Defendant AU Optronics Corporation has its corporate headquarters at No. 1, Li-Hsin 4 Rd. 2, Hsinchu Science Park, Hsinchu 30078, Taiwan. Defendant AU Optronics Corporation was 5 formed by the September 2001 merger ofunipac Optoelectronics and Acer Display Technology 6 ("ADT"). During the time period covered by this Complaint, said defendant (either itself, or 7 through one of its predecessors prior to the merger) manufactured, marketed, sold and/or 8 distributed LCD panels directly and/or indirectly to customers in California Unipac Optoelectronics, a former Taiwanese LCD panel manufacturer and an affiliate 10 ofunited Microelectronics Corp., was founded in November ADT, a former Taiwanese 11 LCD panel manufacturer and an affiliate of the Acer Group, was founded in August Quanta Display, Inc., ("QI)I"), a former Taiwanese LCD panel manufacturer and a subsidiary of 13 Quanta Computer Inc., was founded in Ju:ly 1999 and was merged into defendant AU Optronips 14 Corporation in October Defendant AU Optronics Corporation Arllerica, Inc., is a wholly owned and 16 controlled subsidiary of defendant AU Optronics Corporation, with its corporate headquarters at Cypresswood Drive, Suite 241, Houston, Texas and facilities located in San Diego and 18 Cupertino, California. During the time period covered by this Complaint, defendant AU 19 Optronics Corporation America, Inc., manufactured, marketed, so~d and/or distributed LCD 20 panels directly and/or indirectly to customers in California Defendants AU Optronics Corporation and AU Optronics Corporation America, Inc., 22 are referred to collectively herein as "AU Optronics." Defendant Chimd Innolux Corporation has its principal place of business located at 24 No. 160 Kesyue Rd., Chu-Nan Site, Hsinchu Science Park Chu-Nan, Miao-Li, Taiwan. 25 Defendant Chimei Innolux Corporation was formed on March 18,2010 by a merger of Chi Mei 26. Optoelectronics Corp., Innolux Display Corp., and TPO Displays Corp., through exchanges of 27 shares. Innolux Display Corp., the surviving company of the merger, renamed itself "Chimei. Innolux Corporation." TPQ and Chi Mei were dissolved after the merger. During the time period 6

7 1 covered by this Complaint, defendant Chimei Innolux Corporation (either itself, or through one of 2 its predecessors prior to the merger) manufactured, marketed, sold and/or distributed LCD panels 3 directly and/or indirectly to customers in California Chi Mei Optoelectronics Corporation was a former manufacturer of LCD panels, with 5 its global headquarters at No.3, Sec. 1, Huanshi Rd., Southern Taiwan Science Park, Sinshih 6 Township, Tainan County, Taiwan. Innolux Display Corp. was a former manufacturer of 7 LCD panels, with its principal place ofbusiness located at No. 160 Kesyue Rd., Chu-Nan Site, 8 Hsinchu Science Park Chu-Nan, Miao-Li, Taiwan Defendant Chi Mei Optoelectronics USA, Inc., f/k/a International Display 10 Technology USA, Inc., is a wholly owned and controlled subsidiary ofchi Mei Corporation, with 11 its corporate headquarters at 101 Metro.Drive Suite 510, San Jose, California During the 12 time period ~overed by this Complaint, said defendant manufactured, marketed, sold and/or 13 distributed LCD panels directly and/or indirectly to customers in California Defendant CMO Japan Co., Ltd., f/k/a International Display Technology, Ltd., is a 15 subsidiary of Chi Mei Corporation, with its principal place ofbusiness located atnansei Yaesu 16 Bldg. 3F, Yaesu, Chuo-Ku, Tokyo , Japan. During the time period covered by 17 this Complaint, said.defendant manufactured, marketed, sold and/or distributed LCD panels 18 directly and/or indirectly to customers in California Defendants Chimei Innolux Corporation, Chi Mei Optoelectronics USA, Inc., and 20 CMO Japan Co.; Ltd. are referred to collectively herein as "Chi Mei." Defendant Epson Imaging Devices Corporation ("EIDC") has its principal place of 22 business at Minami-Yoshikata Tottori-Shi, Tottori-ken Japan. EIDC was 23 originally formed as Sanyo Epson Imaging Devices Corporation on October 1, 2004, as a joint 24 venture co-owned by Seiko Epson Corporation and Sanyo Electric Co., Ltd. As of December, , Sanyo Epson Imaging Devices Corporation became a wholly-owned subsidiary of Seiko 26 Epson Corporation and changed its name to EIDC. During the time period covered by this 27 Complaint, defendant EIDC (either itself, or through one of its predecessors) manufactured, 7

8 ' I marketed, sold and/or distributed LCD panels directly and/or indirectly to customers in California. 21. Defendant Epson Electronics America, Inc., ("Epson America") is a California corporation with its principal place ofbusiness at 2580 Orchard Parkway, San Jose, California Epson America is a wholly-owned and controlled subsidiary of Seiko Epson Corporation. During the time period covered by this Complaint, defendant Epson America manufactured, marketed, sold and/or distributed LCD panels directly and/or indir~ctly to customers in California. 22. Defendant HannStar Display Corporation ("HannStar") has its headquarters at 26th floor, No. 1, Songzhi Road, Xinyi District, Taipei 110) Taiwan, R.O.C. During the time period covered by this Complaint, said defendant manufactured, marketed, sold and/or distributed LCD panels directly and/or indirectly to customers in California. 23. Defendant Hitachi, Ltd., has its headquarters at 6-6 Marunouchi 1-chome, Chiyodaku, Tokyo, , Japan. During the time period covered by this Complaint, said defendant manufactured, marketed, sold and/or distri~uted LCD panels directly and/or indirectly to customers in California. 24. Defendant Hitachi Displays, Ltd., has its principal place of business at AKS Bldg.. SF, 6-2 Kanda Neribei-cho 3,Chiyoda-ku,Tokyo, , Japan. During the time period covered by this Complaint, said defendant manufactured, marketed, sold and/or distributed LCD panels directly and/or indirectly to. customers in California. 25. Defendant Hitachi Electronic Devices (USA), Inc., a wholly owned and controlled subsidiary of defendant Hitachi, Ltd., has its principal place of business at Hurricane Shoals Road, Ste. D-100, Lawrenceville, GA During the time period covered by this Complaint, defendant Hitachi Electronic Devices (USA), Inc., manufactured, marketed, sold and/or distributed LCD panels directly and/or indirectly to customers in California. 26. Defendants Hitachi Displays, Ltd., Hitachi America, Ltd., and Hitachi Electronic Devices (USA), Inc., are referred to collectively herein as "Hitachi." 8

9 1 27. Defendant Hydis Tecluiologies Co., Ltd., f/k/a BOE Hydis Technology Co., Ltd., 2 ("Hydis") has its principal place ofbusiness at San 136-1, Ami-ri, Bubal-eub, Icheon-si, 3 Gyeonggido, , Republic of Korea. During the time period covered by.this Complaint, 4 said defendant manufactured, marketed, sold and/or distributed LCD panels directly and/or 5 indirectly to customers in California. 6. Defendant LG Display Co., Ltd., f/k/a LG Phillips LCD Co, Ltd., is a joint venture 7 created in 1999 by Philips Electronics NV and LG LCD, maintains offices in San Jose, 8 California, and has its principal place of business at 20 Yoido-dong, Y outi.gdungpo-gu; Seoul, , Republic of Korea. During the time period covered by this Complaint, said defendant 10 manufactured, marketed, sold and/or distributed LCD panels directly and/or indirectly to 11 customers in California Defendant LG Display America, Inc. f/k/a LGD LCD America, Inc., has its principal 13 place ofbti,siness at 150 East Brokaw Rd., San Jose, CA During the time period covered 14 by this Complaint, said defendant manufactured, marketed, sold and/or distributed LCD panels 15 directly and/or indirectly to customers in California Defendants LG Display Co., Ltd., and LG Display America, Inc., are referred to 17. collectively herein as "LGD." Defendant Samsung Electronics Co., Ltd., has its principal place ofbusiness at 19 Samsung Electronics Bldg., , Seocho 2-dong, Seocho-gu, Seoul , Republic of 20 Korea. During the time period covered by this Complaint, said defendant manufactured, 21 marketed, sold and/or distributed LCD panels directly and/or indirectly to customers in 22 California Defendant Samsung Semiconductor, Inc., is a wholly~owned and controlled 24 subsidiary or defendant Samsung Electronics Co., Ltd., with its principal place of business at North First Street, San Jose, California During the time period covered by this 26 Complaint, defendant Samsung Semiconductor, Inc., manufactured, marketed, sold and/or 27 distributed LCD panels directly and/or indirectly to customers in California.. 9

10 I Defendant Samsung Electronics America, Inc., ("Samsung America") is a wholly- 2 owned and controlled subsidiary of defendant Samsung Electronics Company, Ltd., with its 3 principal place ofbusiness at 105 Challenger Road, Ridgefield Park, New Jersey. During the 4 time period covered by this Complaint, defendant Samsung America manufactured, marketed, 5 sold and/or distributed LCD panels directly and/or indirectly to customers in California Defendants Samsung Electronics Co., Ltd., SamsungElectronics America, Inc., and 7 SamsU:ng Semiconductor, Inc., are referred to collectively herein as "Samsung." Defendant Sharp Corporation has its principal place of business at Nagaike- 9 cho, Abeno-ku, Osaka , Japan. During the time period covered by this Complaint, said 10 defendant manufactured, marketed, sold and/or distributed LCD panels directly and/or indirectly 11 to customers in California Defendant Sharp Electronics Corporation is a wholly-owned and controlled 13 subsidiary of defendant Sharp Corporation, with its principal place of business at Sharp Plaza, 14 Mahwah, New Jersey, During the time period covered by this Complaint, defendant 15 Sharp Electronics Corporation manufactured, marketed, sold and/or distributed LCD panels 16 directly and/or indirectly to customers in California Defendants Sharp Corporation and Sharp Electronics Corporation are referred to 18 collectively herein as "Sharp." Defendant Toshiba Corporation has its principal place of business at 1-1, Shibaura 1-20 chome, Minato-ku, Tokyo, , Japan. During the time period covered by this Complaint, 21 said defendant manufactured, marketed, sold and/or distributed LCD panels directly and/or 22 indirectly to customers in California Defendant Toshiba Mobile Display Co., Ltd., is a wholly owned and controlled 24 subsidiary of defendant Toshiba Corporation, with its principal place of business at 1-9-2, Hatara-. 25 cho, Fukaya-shi, Saitama, , Japan. Prior to May 29, 2009, Toshiba Mobile Display Co., 26 Ltd., was known as Toshiba Matsushita Display Technology Co., Ltd., and was jointly owned by 27 defendant Toshiba Corporation and Panasonic Corporation. During the time period covered by. this Complaint, defendant Toshiba Mobile Display Co., Ltd:, (either itself, or through one.of its 10. I

11 ; i predecessors) manufactured, marketed, sold and/or distributed LCD panels directly and/or indirectly to customers in California. 40. Defendant Toshiba America Electronics Components, Inc., is a wholly owned and controlled subsidiary of defendant Toshiba Corporation, with its corporate headquarters at MacArthur Blvd., Ste. 400, Irvine, California During the time period covered by this Complaint, defendant Toshiba America Electronics Components, Inc., manufactured, marketed, sold and/or distributed LCD panels directly and/or indirectly to customers in California. 41. Defendant Toshiba America Information Systems, Inc., is a California corporation, with its principal place ofbusiness at 9740 Irvine Boulevard, Irvine, California Defendant Toshiba America Information Systems, Inc. is a wholly-owned and controlled subsidiary of Toshiba America, Inc. During the time period covered by this Complaint, defendant Toshiba America Information Systems, Inc., manufactured, marketed, sold and/or distributed LCD pal).els directly and/or indirectly to customers in California. 42. Defendants Toshiba Corporation, Toshiba Mobile Display Co., Ltd., Toshiba America Electronics Components, Inc., and Toshiba America Information Systems, Inc., are referred.to collectively herein as 'itoshiba." 43. Wherever in this Complaint a family of defendant-corporate entities is referred to by a common name, it shall be understood that Plaintiffs are alleging that one or more officers or employees of one or more of the named related Defendant companies participated in the illegal acts alleged herein on behalf of all of the related corporate family entities. 44. Defendants are also liable for acts done in furtherance of the alleged conspiracy by companies they acquired through mergers or acquisitions. 45. Plaintiffs are ignorant of the true names or capacities of the defendants sued herein as. DOES 1 through 100. Each of the fictitiously named defendants is responsible in some manner for the occurrences herein alleged, and Plaintiffs' damages as herein alleged were proximately caused by those defendants. 11 i

12 C. Co-Conspirators 46. Various persons and entities, some of whose identities are unknown to Plaintiffs at this time, participated as co-conspirators in the violations alleged herein and performed acts and made statements in furtherance thereof. These co-conspirators include, but are not limited to, the companies listed in the following paragraphs. Once the identities of additionctl presently unknown co-conspirators are ascertained, Plaintiffs will seek leave of court to add them as named defendants herein. These co-conspirators include, but are not limited to, the companies listed in the following paragraphs. 47. Co-conspirator Chunghwa Picture Tubes, Ltd., ("Chunghwa") has its global headquarters at 1127 Hopin Rd., Padeh City, Taoyuan, Taiwan. During the time period covered by this Complaint, said co-conspirator manufactured, marketed, sold and/or distributed LCD panels directly and/or indirectly to customers in California. 48. Co-conspirator Mitsubishi Electric Corporation has its principal place of business at 14 Tokyo Building 2-7-3, Marunouchi, Chiyoda-ku, Tokyo , Japan. During the time period 15 covered' by this Complaint, Mitsubishi Electric Corporation manufactured, marketed, sold and/or 16 distributed LCD panels directly and/or indirectly to customers in California Co-conspirator Mitsubishi Electric & Electronics USA, Inc., is a wholly owned 18 subsidiary of co-conspirator Mitsubishi Electric Corporation, with its principal place of business 19 at 5665 Plaza Drive, Cypress, California During the time period covered by this 20. Complaint, Mitsubishi Electric & Electronics USA, Inc., manufactured, marketed, sold and/or 21 distributed LCD panels directly and/or indirectly to customers in California The acts charged in this Complaint have been done by Defendants and their co- 23 conspirators, or were authorized, ordered, or done by their respective officers, agents, employees, 24 or representatives while actively engaged in the management of each Defendants' business or 25 affairs Each of the Defendants named herein acted as the agent or joint venturer of or for the 27 other Defendants with respect to the acts, violations and common course of conduct alleged 12

13 J 1 1 herein. Each Defendant that is a wholly-owned subsidiary of a foreign parent is the United States 2 agent for its parent company, unless indicated otherwise V. N.A.TUREOFTRADEANDCOMMERCE A. LCD Panels. LCD is a type of display technology utilized in products including TV s, computer 6 monitors, laptops, mobile phones, digital cameras, and numerou~ other electronic products. LCD 7 panels are the dominant form of display screen in the TV, computer monitor, and laptop 8 industries. Computer monitors now comprise approximately 50% of revenues for the large LCD 9 products market, with TVs and laptop computers accounting for approximately 27% and 21% of 10 revenues, respectively. All other LCD products combined accounted for between 2-5% of LCD 11 panel revenues during the relevant time period LCD technology offers benefits over both traditional cathode-ray tube ("CRT") 13 technology and the other flat screen technology, commonly called "plasma." LCD is thin and 14 light and uses low power. Thus, unlike CRTs, which are heavy and bulky, LCD panels can fit into 15 a laptop and permit mobility. Because a CRT is so bulky, CRTs have never been used in laptop 16 computers. For TVs and monitors, LCD panels use less space than traditional CRT technology; 17 they can be mounted on a wall because of their lightwe~ght, and offer superior viewing angles The other flat panel technology, plasma, is not practical for use in laptops. Because 19 plasma has a high power requirement, it "runs hot" and cannot be operated by battery power. In 20 addition, bec~use of problems calied "bum-in" and the. fragility of the plasma panel itself, plasma 21 has not been used in the laptop market. Thus, normally only LCD panels are used to make 22 laptops LCD technology dominates the flat panel market. It has virtually 100% market share 24 for laptops and flat panel computer monitors, and at least 80% market share for flat panel TVs B. Manufacturing An LCD Panel. The technology behind LCDs is not new. In the 1950s and 1960s, RCA Corporation 27 researched whether liquid crystals could be.the basis for lightweight, low-power display technology. In the 1970s, after RCA discontinued its efforts, Japanese companies took the lead in 13.

14 1 commercializing liquid crystal technology. These efforts resulted in monochrome calculators and 2 watches. By the early 1990s, liquid crystal technology was introduced in notebook computers and 3 small, low-resolution TVs. In the mid-1990s, the technology advanced further with the 4 development of LCDs LCDs use liquid crystal to control the passage of light. More specifically, an LCD 6 panel is made of a layer of liquid crystal sandwiched between two glass sheets. The front glass 7 sheet is fitted with a color filter, while the back glass substrate has transistors fabricated on it. 8 When voltage is applied to a transistor, the liquid crystal is bent, allowing light to pass through to 9 form a pixel. The front glass sheet contains a color filter, which gives each pixel its own color. 1 0 The combination of these pixels in different colors forms the image on the panel There are significant manufacturing and technological barriers to entry in the LCD 12 products market. A state-of-the-art fabrication plant (called 11 fabs 11 in the industry) can cost 13 upwards of $2 billion, and changing technology requires constant investments in research and 14 development. The most expensive material used to make an LCD panel is the glass. In industry.. 15 language, glass sizes advance in what are called II generations. II These generation sizes have 16 developed at a rapid pace, continuing to expand in size Since 2000, glass substrate size for LCD panels has approximately doubled every years. Large-generation glass offers great economies of scale. Larger sheets allow display 19.manufacturers to produce larger panel sizes from a single substrate more efficiently Today's eighth generation glass substrates have about four times the surface area of 21 fourth generation substrates, which means they yield more (and larger) LCD panels. For instance, 22 one eighth generation substrate can produce the panels needed for fifteen LCD TV s. Larger 23 sheets of glass reduce manufacturing costs. For example, panel costs were approximately 24 $20/inch for fourth generation fabs, falling to $1 0/inch for fifth generation fabs, and then falling 25 another 80% to the eighth generation There have been at least eight generations of LCD fabs, each requiring significant 27 new investment. Because building a new fabrication line or retrofitting the old line is very expensive, and because the glass is nearly all sourced from the same supplier (Corning 14 First Amended Complaint for Damages and Injunctive. Relief Based on Cartwright Act, Unfair Competition, and Unjust Enrichment

15 1 Incorporated) LCD panel manufacturers use standard sizes for their products. Thus, for the major 2 input cost, each has the same supplier. A fab line that works with one size glass cannot switch 3 over to another size without substantial retrofitting Because fabrication plants are most efficient when they cut standard sizes for panels, 5 different manufacturers with different generation fabs seek to make only the most efficient size 6 panels for that fab. For example, a fab that makes 730 mm x 920 mm (a 4th generation fab) glass 7 sheets can cut that sheet to make exactly six 17" LCD panels. A fab that uses 680mm x 880mm 8 glass can cut exactly six 15" panels from that glass. But different generation fabs inefficiently 9 yield non-standard LCD panel sizes, with the rest of the glass as waste. Thus, when Defendants 10 need other panel sizes not efficiently made by their fabs, they cross-purchase from each other. For 11 example, Defendant LGD supplies certain size panels to other Defendants, and, in turn, buys 12 other size panels from Chunghwa, Chi Mei, and AU Optronics. HannStar and Churighwa have an 13 agreement whereby Chunghwa supplies 17" panels to HannStar, and HannStar supplies 19" 14 panels to Chunghwa. Samsunghas a joint venture with Sony to supply each other with LCD 15 panels, but Samsung also purchases panels from AU Optronics and HannStar. HannStar makes 16 panels for Hitachi. Chunghwa makes panels for AU Optronics; and Chi Mei makes panels for 17 Sharp and Toshiba, as well as Sanyo These cross-licensing and cross-purchasing agreements provide opportunities for 19 collusion and coordination among members, as well as a means of checking, agreeing on, and 20 controlling prices and output, not only a priori, but aho a posteriori in order to detect cheating on 21 agreements to limit output and fix prices. ~titrust risk is also particularly acute when there are 22 cooperative efforts to develop, design, implement, and license certain technologies, as exist in the 23 LCD products market There is a gteat deal of cross-licensing and there are many cooperative arrangements 25 in the LCD products market, all of which create additional opportunities for collusive activity. 26 The various joint ventures, cross licenses, and other cooperative arrangements among the 27 Defendants have provided a means of implementing and policing the agreements to fix prices and 15

16 1 limit output for LCD panels that Defendants and co-conspirators have entered into at numerous 2 meetings described hereafter These combinations are between significantly large rivals and not trivial. The effects 4 of these combinations substanti;:tlly lessen competition and/or tend to create an unlawful 5 combination, and were used as part and parcel of the conspiracy alleged herein and in furtherance 6 of it. 7 C. Market Size And Structure For LCD Panels And LCD Products The market for LCD panels is huge. Manufacturers produced approximately million LCDs for TVs in 2006, and flat-panel sales- most of those using LCD technology- 10 reached approximately $US 88 billion in 2006 and $US 100 billion ~n The market for the manufacture and sale of LCD panels is conducive to the type of 12 collusive activity alleged herein. During the time period covered by this Complaint, Defendants 13 and their co-: conspirators collectively controlled a significant share of the market for LCD panels, 14 both globally and in the United States. Specifically, the top six companies (Samstmg, LGD, Chi 15 Mei, AU Optronics, Sharp and Chunghwa) as of2009 controlled in excess of80% ofthe LCD 16 panels market The LCD panels industry has experienced significant consolidation during the time 18 period covered by this Complaint, as reflected by: AU Optronics' acquisition ofqdi; the creation 19 in 2001 of AU Optronics itself through the merger of Acer Display and Unipac Electronics; 20 Fujitsu Limited's transfer of its LCD business to Sharp in 2005; the merger of the LCD operations 21 of Toshiba and Matsushita into one entity; Defendant Toshiba Matsushita Display Co., Ltd., in ; and the joint venture for the production of LCD panels for TV s by Hitachi, Toshiba, and. 23 Matsushita in A number of the Defendants, co-conspirators, and/or their corporate parents or 25 subsidiaries, including Samsung, Hitachi, Epson, Sharp, LGD, Chunghwa, Chi Mei, AU 26 Optronics, and Toshiba, have either been indicted, pled guilty to, or are currently being 27 investigated by the USDOJ, for entering into one or more price-fixing agreements in other closely-related industries similar to that alleged herein. Such industries include dynamic random 16.

17 I access memory ("DRAM") computer chips, static random access memory ("SRAM") computer chips, CRTs, and NAND chips or flash memory ("Flash"). The DRAM, SRAM, and Flash industries are oligopoly industries dominated by many of the same Defendants as in the LCD panel industry, which has a similar oligopoly structure. The Defendants' entry ipto express pricefixing agreements in other computer electronics markets demonstrates that the oligopoly structure of those industries has not in itselfbeen sufficient to achieve price uniformity and output controls, but that agreement among the market participants has been required to achieve price uniformity and output controls. Such evidence tends to exclude the possibility that price uniformity in the LCD panel industry, which is similar to the DRAM, SRAM, CRT and Flash industries and includes some of the same Defendants, is merely a result of normal market forces rather than express agreement. 70. Direct purchasers buy LCD panels-in order to include them as components in TVs, computer monitors, laptops, and other electronic products. The largest direct purchasers of LCD panels are computer OEMs such as Dell, HP, Apple, and Gateway. Significantly, a number of the Defendants are also computer and/or TV OEMs, such as Toshiba and Samsung (computers) and Samsung, Hitachi, and Toshiba.(TVs) LCD panels have no independent utility, and have value only as components of other products, such as TVs, computer monitors, and laptops. The demand for LCD panels thus directly derives from the demand for such products.. The market for LCD pariels and the market for the products into which they are placed are inextricably linked and intertwined, because the LCD panel market exists to serve the LCD products markets. The market for LCD panels and the markets for the products in which LCD panels are placed are, in effect, inseparable in that one would not exist without the other. 72. Plaintiffs have participated in the market for LCD panels through purchases of products containing such panels. The Defendants' unlawful conspiracy has inflated the prices at which Plaintiffs and other purchasers have bought products made with LCD panels, and Plaintiffs have been injured thereby and paid supracompetitive prices for LCD panels contained in such products. 17 -i

18 1 73. Consumers, including Plaintiffs, are injured by paying supracompetitive prices for 2 products containing LCD panels, and are further injured to the extent they are unable to purchase 3 products containing LCD panels due to the supracompetitive pricing caused.by Defendants' 4 unlawful conduct VI. VIOLATIONS ALLEGED Beginning at a date as yet unknown to the Plaintiffs, but at least as early as January 1, and continuing thereafter up to and including December 11, 2006 at a minimum, Defendants 8 and their co-conspirators agreed, combined, and conspired to raise, maintain, and stabilize at 9 artificial levels the prices at which LCD panels have been sold directly and indirectly in the 10 United States and the State of California Defendants, through their officers, directors and employees, effectuated a contract, 12 combination, trust, or conspiracy between themselves and their co-conspirators by, among other 13 things: 14 a. Participating in meetings and conversations to discuss the prices and supply of 15 LCD panels in the United States; 16 b. Agreeing to fix the prices and limit the supply of LCD panels sold in the United 17 States in a manner that deprived direct and indirect purchasers of free and open competition; 18 c. Issuing price announcements and quotations in accordance with. the agreements 19 reached; 20 d. Selling LCD panels to various customers in the United States and the State of 21 California at fixed, non-competitive prices; and 22 e. Invoicing customers in the United States and the State of California at the agreed- 23 upon fixed prices for LCD panels and transmitting such invoices via U.S. mail and other interstate 24 means of delivery A. Defendants' Agreements To Set Prices And Limit Production The LCD panel conspiracy alleged hereinwas effectuated through a combination of 27 group and bilateral discussions that took place in Japan, South Korea, Taiwan, and the United States. In the early years, beginning in at least 1996, representc~.tives of the Japanese Defendants 18

19 1 Hitachi, Sharp and Toshiba met and agreed to fix prices for LCD panels generally, as well as to 2 specific OEMs; they also agreed to limit the amount of LCD panels each would produce In the early years, when the conspiracy was principally limited to the Japanese 4 Defendants, bilateral discussions were the preferred method of communication. As more 5 manufacturers entered the conspiracy, however, group meetings became more prevalent As LCD production in Korea began to increase and become more sophisticated, the 7 Japanese Defendants expanded their meetings to include their Korean competitors, including 8 Defendants LGD and Samsung, both of which also agreed to fix prices and control supply. At or 9 about this same time, the Japanese Defendants began to partner with those Defendants located in 10 Taiwan to trade technology and collaborate on supply. Japanese engineers were lent to Taiwanese 11 firms, and Taiwanese output was shipped to Japan. In 2001, the Korean Defendants convinced 12 Taiwanese LCD panel manufacturers, including AU Optronics, Chi Mei, Chunghwa, and 13 HannStar, to join the conspiracy to fix prices and control supply. Defendants' conspiracy included 14 agreements on the prices at which certain Defendants would sell LCD panels and products to their. 15 own corporate subsidiaries and affiliates that manufactured LCD panel containing products, 16 thereby ensuring that LCD panel prices remained the same as between Defendants and their OEM 17 customers, preventing any price competition on LCD products to consumers "Crystal Meetings" In ~arly 2001, high-level employees of at least two large manufacturers of LCD 20 panels met in person and agreed to engage in periodic meetings to exchange sensitive competitive 21 information and to fix the price of LCD panels and limit their production. From early through at least 2006, officials from Samsung, AU Optronics, Chunghwa, Chi Mei, HannStar, 23 LGD, and Sharp, met periodically in Taiwa.rl to discuss and reach agreements on LCD panel 24 prices, price increases, production, and production capacity, and did in fact reach agreements 25 increasing, maintaining, and/or fixing LCD panel prices and limiting their production. The group 26 meetings these Defendants participated in were called "Crystal Meetings." These Defendants 27 attended multiple meetings with one or more of the other Defendants during this period. The 19 I I

20 1 Crystal price-fixing and output-limitation meetings occurred in Taiwan; other similar meetings 2 took place in South Korea, Japan, and the United States on a regular basis throughout this period The Crystal Meetings were highly organized and followed a set pattern. Meetings 4 among Defendants' high-level executives were called "CEO" or "Top" meetings; those among 5 Defendants' vice presidents and senior sales executives were called "Commercial" or 6 "Operational" meetings "CEO" m eetings opcurred quarterly from approximately 2001 to The purpose 8 and effect of these meetings was to stabilize or raise prices. Each meeting followed the same 9 general pattern, with a rotating designated "chairman" who would use a projector or whiteboard 10 to put up figures relating to the supply, demand, production, and prices of LCD panels for the 11 group to review. Those attending the meetings would take turns sharing information concerning 12 prices, monthly and quarterly LCD fab output, production, and supply, until a consensus was 13 reached concerning the parti9ipants' prices and production levels of LCD panels in the coming 14 months or quarter The structure of "Commercial" meetings was largely the same as "CEO" meetings. 16 These meetings took place more frequently than "CEO" meetings and occurred approximately 17 monthly During all of these meetings, Defendants exchanged infonhation about current and 19 anticipated prices for their LCD panels, and, thereafter, reached agreement concerning the 20 specific prices to be charged in the coining weeks and months for LCD panels. Defendants set 21 these prices in various ways, including, but not limited to, setting "target" prices, "floor" prices, 22 and the price range or differential between different sizes and types of LCD panels During these CEO/Commercial meetings, Defendants also exchanged information 24 about supply, demand, and their production of LCD panels, and, thereafter, often reached 25 agreement concerning the amounts each would produce. Defendants limited the production of 26 LCD panels in various ways, including, but not limited to, line slowdowns, delaying capacity 27 expansion, shifting their production to different-sized panels, and setting target production levels. 20

21 1 85. During these CEO/Commercial meetings, Defendants.also agreed to conceal the fact 2 and substance of the meetings, and took various steps to do so. Top executives and other officials 3 attending these meetings were instructed on more than one occasion to not disclose the fact of 4 these meetings to outsiders, or even to other employees of the Defendants not involved in LCD 5 panel pricing or production. On at least one occasion, top executives at a CEO meeting staggered 6 their arrivals and departures at the meeting site so that they would not be seen in the company of 7 each other coming or going to such meeting The structure of the so-called "working level" meetings was less formal than the CEO 9 or Commercial meetings, and often occurred at restaurants over a meal. The purpose of the 10 "working level" meetings was to exchange information on price, supply and demand, and 11 production information which then would be transmitted up the corporate reporting chain to those 12 individuals with pricing authority which facilitated implantation of the conspiracy and effectuated 13 the agreements made at the CEO and at the Commercial meetings In approximately the summer of 2006, when they began to have concerns about 15 antitrust issues, Defendants discontinued the working-level meetings in favor of one-on-one 16 meetings to exchange pricing and supply information. The meetings were coordinated so that on 17 the same date, each competitor met one-on-one with the other in a "round robin" set of meetings 18 until all competitors had met with each other. These "round robin" meetings took place until at 19 least November or December of2006. The information obtained at these meetings was 20 transmitted tip the corporate reporting chain to permit the Defendants to maintain their price- 21 fixing and production-limitation agreement Bilateral Discussions During the Crystal Meetings, Defendants also agreed to engage in bilateral 24 communications with those Defendants not attending these meetings. Certain Defendants were 25 "assigned" other Defendants not in attendance and agreed to and did in fact communicate with 26 non-attending Defendants to synchronize the price and production limitations agreed to at the 27 Crystal Meetings. For example, HannStar contacted Hitachi to relay the agreed-upon prices and production limitations. Subsequently, the Japanese Defendants implemente~ the agreed-upon 21.

22 1 pricing and production limitations that had been conveyed to Hitachi by Hannstar. This is one of 2 the ways in which the Japanese Defendants participated in the conspiracy to fix the prices and 3 limit the production of LCD panels Crystal Meetings were also supplemented by additional bilateral discussions between 5 various Defendants in which they exchanged information about pricing, shipments, and 6 production. As is more fully alleged below, Defendants had bilateral discussions with one another 7 during price negotiations with customers in order to avoid cutting prices and to implement the 8 fixed prices set by Defendants during the Crystal Meetings. These discussions usually took place 9 between sales and marketing employees in the form of telephone calls, s, and instarit 10 messages. The information gained in these communications was then shared with supervisors and 11 taken into account in determining the price to be offered the Defendants' OEM customers Defendants' Participation In Group And Bilateral Discussions AU Optronics, Chi Mei, Chunghwa, HannStai-,. LGD, and Samsung attended multiple 14 CEO, Colilinercial, and working-level meetings, as well as bilateral discussions during the 15 relevant time period. Additionally, Unipac, which merged with Acer Display Technology in to form AU Optronics, and QDI, which merged with AU Optronics in 2006, participated in 17 working-level meetings. At the CEO and Commercial meetings, these Defendants agreed on 18 prices, price increases, and production limits and quotas for LCD panels Defendant Sharp participated in multiple working-level meetings, as well as bilateral 20 discussions with other Defendants, during the relevant time period. Through these discussions, 21 Sharp agreed with the other Defendants and co-conspirators named in this Complaint on prices, 22 price increases, and production. limits and quotas for LCD panels Def~ndant Hitachi participated in muitiple bilateral discussions with Defendants, 24 including HannStar, during the relevant time period. Through these discussions, Hitachi agreed 25 on prices, price increases, and production limits and quotas for LCD panels Defendant Toshiba participated in multiple bilateral discussions with other 27 Defendants, including_ Sharp, during the relevant time period. Through these discussions, Toshiba agreed on prices, price increases, and production limits and quotas for LCD panels. As pleaded. 22. First Amended Complaint for Damages and lnjunctive Relief Based on Cartwright Act, Unfair Competition, and Unjust Enrichment

23 1 below, Defendant Sharp admitted to participating in bilateral meetings, conversations, and 2 communications in Japan and the United States with unnamed co-conspirators during which they 3 fixed the prices of LCD panels sold to Dell for use in computers; panels sold to Apple for use in 4 ipods; and panels sold to Motorola for use in Razr phones during the relevant time period. During 5 this time, Toshiba was one of Sharp's principal competitors in the sale of LCD panels to Dell for 6 use in computers, as well as for panels sold to Apple for use in the ipod. Sharp could not have 7 successfully fixed the prices of LCD panels sold to Dell or Apple unless Toshiba also agreed to 8 fix prices of similar LCD panels at supra-competitive levels to those two OEMs Toshiba also participated in the conspiracy by entering into joint ventures and other 10 arrangements to manufacture or source flat panels with one or more of the Defendants that 11 attended the Crystal Meetings. The purpose and effect of these joint ventures by Toshiba and 12 others was to limit the supply of LCD panels and fix prices of such panels at unreasonably high 13. levels and to aid, abet, notify and facilitate the effectuation of the price-fixing and production- 14 limitation agreements reached at the meetings. During the relevant time period, Toshiba sought 15 and formed strategic partnerships with other LCD manufacturers which allowed it to easily 16 communicate and coordinate prices and production levels with other manufacturers as part of the 1 7 overall conspiracy alleged herein , For instance, Toshiba formed HannStar in January 1998 as a manufacturing joint 19 venture. In 2001, Toshiba, Sharp, Matsushita, and Hitachi formed a joint venture to share basic 20 LCD research costs. In 2001, Toshiba and Matsushita formed a joint venture, Advanced Flat 21 Panel Displays, which merged their LCD operations. In April of2002, Toshiba and Matsushita 22 formed a joint venture, Toshiba Matsushita Display Technology. Co., Ltd., which combined the 23 two companies' LCD development, manufacturing, and sales operations. In 2004, Toshiba, 24 Matsushita, and Hitachi formed a joint venture, IPS Alpha Technology, Ltd., which manufactures 25 and sells LCD panels for TVs. In 2006, Toshiba purchased a 20% stake in LGD's LCD panel 26 manufacturing facility in Poland. And in 2007, Toshiba and Sharp formed a joint venture in 27 which Toshiba agreed to provide 50% of Sharp's chip needs and Sharp agreed to provide 40% of Toshiba's panel needs. The operation and management of these many different joint ventures 23 '