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In re Graphics Processing Units Antitrust Litig.

United States District Court for the Northern District of California

September 27, 2007, Decided; September 27, 2007, Filed

No. C 06-07417 WHA, MDL No. 1826

Opinion

 [*1013]  PRETRIAL ORDER NO. 5

ORDER GRANTING IN PART AND DENYING IN PART MOTIONS TO DISMISS

INTRODUCTION

In this multi-district antitrust proceeding, all defendants have moved to dismiss the direct purchasers' complaint as well as the indirect purchasers' complaint. One of the prominent issues presented is the proper application of the recent decision in Bell Atlantic Corp. v. Twombly,     U.S.    , 127 S. Ct. 1955, 167 L. Ed. 2d 929 (May 21, 2007). The motions are GRANTED IN PART AND DENIED IN PART for the reasons stated below.

STATEMENT

Taking all well-pled facts as true, the complaints establish the following. Defendants are producers of graphics processing units, or GPUs, used in many types of consumer electronics. Defendant Nvidia Corporation, a Delaware corporation, has its headquarters in Santa Clara (DPC P 17). 1 Defendant ATI Technologies, Inc., is a business entity  [**15] organized under the laws of Canada (id. at P 18). Defendant Advanced Micro Devices, Inc., a Delaware corporation, has its principal place of business in Sunnyvale (id. at P 19). On July 24, 2006, AMD and ATI announced a plan for AMD to acquire ATI. The deal closed on October 25, 2006 (ibid.). The acquisition was financed through approximately two billion dollars in debt, as well as 56 million shares of AMD stock (ibid.). Direct and indirect purchasers allege that AMD assumed ATI's existing liabilities pursuant to the acquisition and, as a result, AMD is liable for ATI's conduct (ibid., IPC P 41).

Direct-purchaser plaintiffs are individuals and businesses who allege that they purchased GPUs directly from defendants or their co-conspirators (DPC PP 12-15). Indirect-purchaser plaintiffs, in contrast, allege that they purchased defendants' GPUs indirectly, i.e., through intermediaries, with some of them alleging that they purchased the graphics card itself, while others allege that they purchased computers containing  [**16] defendants' products (IPC PP 10-38). Indirect purchaser plaintiffs reside in the following states: Michigan, Florida, California, New York, South Dakota, Minnesota, Arizona, Wisconsin, Kansas, Washington D.C., Oregon, Vermont, and New Mexico (ibid.).

GPUs are dedicated graphics-rendering devices for computers, workstations, servers, game consoles, and mobile devices such as personal digital assistants and cellular phones (DPC P 8). GPUs process and display computer graphics, including graphics for three-dimensional and video applications (id. at P 9). Defendants sell GPUs to original equipment manufacturers, original design manufacturers, and directly through retail channels. Plaintiffs allege that even when incorporated into computers, a GPU is a physically discrete component that does not undergo any significant alterations (IPC P 49). It can be physically unplugged from the computer's motherboard (ibid.).

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527 F. Supp. 2d 1011 *; 2007 U.S. Dist. LEXIS 76601 **; 2007-2 Trade Cas. (CCH) P75,955

IN RE GRAPHICS PROCESSING UNITS ANTITRUST LITIGATION; This Order Relates To: ALL ACTIONS

Prior History: In re Graphics Processing Units Antitrust Litig., 2007 U.S. Dist. LEXIS 57982 (N.D. Cal., July 24, 2007)

CORE TERMS

antitrust, conspiracy, indirect, attended, acquisition, Technology, announced, nationwide, graphics, cards, consumer, discovery, conclusory, consumer-protection, enrichment, deceptive, conspire, unfair, unjust, unprecedented, state-law, consolidated, electronics, retail, unconscionable, certification, price-fixing, competitors, entities, Finance

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Dismissal, Involuntary Dismissals, Failure to State Claims, Antitrust & Trade Law, Sherman Act, Claims, Pleadings, Complaints, Requirements for Complaint, Heightened Pleading Requirements, Fraud Claims, Monopolies & Monopolization, Conspiracy to Monopolize, State Regulation, Preliminary Considerations, Federal & State Interrelationships, General Overview, Pleading & Practice, Regulated Practices, Private Actions, Prioritizing Resources & Organization for Intellectual Property Act, Standing, Class Actions, Prerequisites for Class Action, Adequacy of Representation, Justiciability, Settlements, Settlement Agreements, Special Proceedings, Judicial Discretion, Contracts Law, Remedies, Equitable Relief, Quantum Meruit, Defenses, Unconscionability, Consumer Protection, Deceptive & Unfair Trade Practices, Price Fixing & Restraints of Trade, Mergers & Acquisitions Law, Liabilities & Rights of Successors, Business & Corporate Law, Corporations