BIG STAKES ANTITRUST TRIAL: IN RE CAPACITORS ANTITRUST LITIGATION

Edited by Anupama K. Reddy¹

PANELISTS

• For the Plaintiffs: Joseph R. Saveri, Joseph Saveri Law Firm, LLP; and Anupama K. Reddy, Google LLC
• For the Defendants: Roberto Finzi, Paul, Weiss, Rifkind, Wharton & Carrison LLP; and Bonnie Lau, Morrison & Foerster LLP
• Moderator: Elizabeth Castillo, Cotchett, Pitre & McCarthy LLP

I. INTRODUCTION & OVERVIEW

In the In re Capacitors Antitrust Litigation trial, a class of direct purchasers brought suit against 23 capacitor manufactures under Section 1 of the Sherman Act. Plaintiffs alleged that defendants participated in a 13-year-long conspiracy to fix the prices of aluminum, film, and tantalum capacitors.

Antitrust cases rarely go to trial. But this one did, and not once, but twice! This case was first tried before Judge James Donato and a Northern California jury in March 2020. That trial was suspended due to the COVID-19 pandemic two weeks into the plaintiffs’ presentation of evidence. The judge declared mistrial in the summer of 2020. The case was then retried by the same trial team, before a different jury, in November 2021. Going into the second trial, the plaintiffs had already secured settlements ($435 million) that exceeded the single damages figure ($427 million) calculated by the plaintiffs’ expert.

This panel explored plaintiffs’ motivations behind trying the case for treble damages despite enforcement challenges in Japan, and defendants’ motivations behind defending the case despite having eight guilty pleas stacked against them. The panelists also touched upon settlement strategies and presentation of expert evidence, and left the audience with trial tips.

Joseph R. Saveri is the founder of the Joseph Saveri Law Firm. Joseph Saveri served as lead trial counsel for the direct purchaser plaintiffs. Anupama Reddy is currently Associate Competition Counsel at Google and was formerly an attorney at the Joseph Saveri Law Firm. Mr. Saveri and Ms. Reddy represented the direct purchaser plaintiffs.

Bonnie Lau is a partner at Morrison & Foerster LLP, and Roberto Finzi is a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP. Mr. Finzi and Ms. Lau represented Japanese capacitor manufacturer defendants Nippon Chemi-Con and Matsuo Electric, respectively.

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Elizabeth Castillo is a partner at Cotchett, Pitre & McCarthy, LLP. Her practice focuses on complex litigation, specifically antitrust class actions, including representing end-payor plaintiffs in In Re Automotive Parts Antitrust Litigation.

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II. HISTORICAL AND LEGAL CONTEXT

MS. CASTILLO: Good afternoon, and welcome to the Big Stakes Antitrust Panel: In Re Capacitors Antitrust Litigation, which the parties tried not once but twice during the COVID-19 pandemic to a jury before the Honorable James Donato in the Northern District of California.

The direct purchasers’ trial against 10 capacitor manufacturers took place first in March 2020. Due to the pandemic, the court suspended trial proceedings that same month and later declared a mistrial. Several defendants settled right before or during the first trial.

A new trial against the last three remaining defendants took place in December 2021. The direct purchasers settled with Matsuo three days into the second trial, and with Nippon Chemi-Con and its U.S. subsidiary right before closing statements. The direct purchasers ultimately settled with 19 defendant groups for over $600 million.

With that background, we’ll begin with the lightning round to get some trial highlights, then move to Q and A for an in-depth discussion, and finish with never-before-heard closing statements that the parties would have given had the second trial progressed further.

So turning to the lightning round. Panelists, please limit your answers to less than 30 seconds.

Bonnie, what was your favorite moment at trial?

MS. LAU: My favorite moment during trial was during opening statements. Joe had used a trial exhibit photo and he cropped it to focus on three gentlemen, insinuating that this was a price-fixing meeting and that an American company, AVX, had participated in.

So during my opening I threw up the same slide but I zoomed out to show the entire photo and I said to the jury: Class counsel hasn’t shown you the full picture, and what the full picture revealed was this is just a global industry conference meeting. There were a dozen people milling around in the background, there was a photographer, and so it clearly demonstrated that this was not some secret price-fixing gathering.

And when that moment occurred, there was a pretty audible gasp from the jury. So that’s my favorite, most memorable moment.

MS. CASTILLO: Joe, what was the most challenging part of trial?

MR. SAVERI: I think the most challenging part was getting the case tried a second time when, after the first trial, we had basically put all our cards on the table and put our case on, which gave the other side a pretty good view about what our case was.

MS. CASTILLO: Anu, what was the most fun part of trial for you?

MS. REDDY: For me, I think the most fun part was I felt like I was really on a team. I almost felt like I was in a band or a Broadway troupe or something because every day we would get ready, plan everything, and then come back and debrief on how the plan went. I really loved that. I loved that I felt like I belonged to something big.

MS. CASTILLO: I’m sorry, I forgot to give the disclaimer for Anu.

MS. REDDY: Yes.

MS. CASTILLO: The views she expresses here today are not Google’s, they are her own.

MS. REDDY: I’m new to this.

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MR. SAVERI: The same is true of me. None of my views should be ascribed to Google.

MS. CASTILLO: All right. Roberto, what was the most unexpected part about trial for you?

MR. FINZI: For us it was—and I think you mentioned this in the introduction—when three days into trial our co-defendant, the last remaining co-defendant, settled the case and there was an announcement that morning. We hadn’t, for reasons I understand, we didn’t have any notice of that.

But we had planned, much as Anu says; you know, you go in there with a game plan, who is going to cross this witness, who is going to put on this direct, who is going to argue this, that, and the other, and we had charted it all out with, you know, some precision and then all of a sudden you find out that, hey, you know, half the team is gone. And so you’ve got to pick up some other crosses and arguments and rethink certain aspects of the presentation to the jury. So that was quite a surprise.

We managed to roll with it and Morrison Foerster and Bonnie, to their credit, were very helpful in terms of—you know, to the extent they could—in helping us out, but that was quite a shock.

MS. CASTILLO: Joe, can you tell us when Judge Donato was at his finest?

MR. SAVERI: Well, I think he was at his finest when he—well, he just really demonstrated I think a lot of attention and care for the jury. I think he demonstrated that he cares very deeply about the jury and the jury process, and so seeing him exhibit that and handle that I think was really admirable.

MS. CASTILLO: Bonnie, when was Judge Donato at his fiercest?

MS. LAU: He was pretty terrifying and fierce at the moment that he struck part of the plaintiffs’ expert’s testimony, Hal Singer.

MS. CASTILLO: Can’t wait to hear more.

Roberto, what was the best part about trying a case during the pandemic?

MR. FINZI: I think two things, really.

I guess in the lightning round you should do one only but I’ll speak quickly.

One was what Anu said, the sense of being part of a team. In the courtroom generally there was less people because of COVID. We felt like even with your adversaries, you were part of a team and you were doing something, and even with the jury.

So that kind of sense of mission and cocoon-like feeling was actually a positive one.

MS. CASTILLO: And finally, Anu, what was the worst part about settling the case when you did?

MS. REDDY: I think it was a great outcome for the class, but I remember when Joe called and he told our team that we settled, I was 99 percent happy but like one percent sad that I didn’t get to cross-examine the defense economist that I was supposed to cross-examine. The cross kept getting pushed out for some or the other reason, like there was a flood or something else happened, and I kept preparing and preparing and preparing for that moment and then we settled.

MS. LAU: Kind of the theme of both trials.

MS. REDDY: Yes.

MS. CASTILLO: Thanks for the quick highlights. Let’s go to the Q and A portion, and first I’d like to talk about going to trial.

III. TRIAL AND SETTLEMENT STRATEGIES

MS. CASTILLO: This question is for Joe. Antitrust cases almost never go to trial. What do you believe created the perfect storm here to make it happen?

MR. SAVERI: A few things. I think, one, there was a very strong liability case.

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Second, you know, I’m really proud of our team, particularly Anu, Chris Young, Steve Williams. I mean, we were really—we had the courage, I think, to take a case like this to trial.

And I think part of it is just having the fortitude and the passion for that and being committed to the jury trial process. I think the other thing that was important was that we had a pretty rapid schedule for a case like this. It did take seven years, I guess, but that was actually pretty fast, given two of those were during the pandemic.

And then I think ultimately it had to do with the fact that we didn’t want to settle for single damages. You know, we wanted more and we thought that that was what these were—there was serious wrongdoing, our clients had sustained substantial losses and it was really important for us to get them compensated.

MS. CASTILLO: Roberto, your client, Nippon Chemi-Con, pleaded guilty and paid a $60 million criminal fine for its role in price-fixing electrolytic capacitors. Why try the case?

MR. FINZI: I mean, look, obviously walking in representing a defendant who has already been convicted of the conduct that they’re on trial for isn’t necessarily where you want to be. That being said, we felt like we had an opportunity and we felt like, with all due respect to the plaintiffs, who tried a great case, that they had overreached, and overreached substantially so, and had therefore put us in a position—had given us an argument or an edge that we might not otherwise have. And whereas we were not going to get one ounce of sympathy from the jury because our clients had pled guilty—they had already admitted it, they had sort of confessed, we could not argue that there was no conspiracy—but we had fairness to argue.

And that gave us a leg to stand on, which is to stand up and tell them point-blank, and we did it—I made a point to do it in the first minute of my opening—is to acknowledge my clients’ responsibility, acknowledge their guilt for it, say we stood by it and recognize it, but that doesn’t mean that they get what they ask for, and that they have stretched and taken advantage and asked for damages they did not suffer.

And so I mean when you ask why take this to trial, part of it is there’s not like a great alternative. I mean, we weren’t prepared to pay what the damages were at the time and so we thought that—and truly believed that it was in the client’s interest to defend the case, take it to trial, and keep litigating it.

And so that’s exactly what we did.

MS. CASTILLO: Bonnie, on the same note, were you concerned about going to trial, given that your client Matsuo, a relatively small player that also pled guilty, was potentially subject to joint and several liability and treble damages for a conspiracy that involved not only electrolytic capacitors—which your client pled guilty to—but also film capacitors?

MS. LAU: Certainly. I think I echo a lot of the things that Roberto said, but independent of the risks of trial and the potential outcome, Matsuo had two very unique things working in its favor.

One is that Japanese law does not enforce punitive damage awards; and then the second is Matsuo is an exclusively Japanese company, with no assets located in the United States. The Supreme Court of Japan has held twice, in 1977 and 2021, that punitive damages awards are not enforceable in Japanese civil courts and that’s because the civil tort process in Japan doesn’t seek to deter or punish, it’s focused exclusively on essentially single damages.

So we felt we had a pretty strong case that any award against us would not be enforceable in Japan or collectable against Matsuo, and so it actually was quite an easy decision for us to roll the dice and go to trial here, and it helped actually relieve a little bit of the pressure of going into such a high stakes trial.

MR. FINZI: The other thing to keep in mind—and everybody here who tries cases knows this—is that

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you can lose a trial and still come out better than the settlement demand.

I mean, it’s not—I think people forget that a lot and people say, oh, I have no case, I’m done on liability, I’ve got to cave. The reality is—and my experience has shown this time and time again—I’ve practiced primarily in the criminal world where, you know, if the prosecutor makes me an offer of 10 years imprisonment and I say no and I go to trial and lose but my client gets five years, I’ve won.

So the kind of binary looking at it like, oh, why go to trial? You may lose, is it’s just all about the outcomes and it’s all about how do you maximize what might otherwise be a bad outcome?

MS. CASTILLO: Anu, next question is for you.

So you began working on Capacitors in 2019 and the parties had been litigating the case for over five years at that point. How did you get up to speed on the hundreds of depos and the thousands of exhibits and prepare yourself for a trial the following year in 2020?

MS. REDDY: Liz actually shared all these questions with us before, so I have a prepared response for this. So three reasons, really broadly.

One was, you know, when I came to the firm, the firm already had a lot of really good associates and they had put in a lot of work in organizing this huge case and I feel like I went back to those resources several times to come up to speed.

The second thing was I would basically camp outside Joe’s and Steve’s offices and, you know, I’d have a list of questions in my notebook and I’d just run through them every day and I’d get the origin story on a lot of things and that was super helpful.

The third thing is, because of the speed at which trial went, I could only focus on like one fire drill at a time. So if I had one problem, I would just really learn everything I needed to learn to solve that one problem and accumulate a little puddle of knowledge and then the puddles kept aggregating and I eventually knew enough.

MS. CASTILLO: Let’s talk about trial strategy.

Joe, people have told me you’re a pro when it comes to knowing when to keep litigating and when to settle. Can you share your expertise in this and tell me how much of this is gut feeling?

MR. SAVERI: I don’t know how much of it is gut feeling and how much I’ve just kind of developed and internalized over the years. You know, I have a couple observations about this.

I think in a multi-defendant case there are kind of two groups. I think there are what we call the pilgrims, they are the early settlers, and there are those who are going to be in there for a long haul, and being able to kind of identify parties or lawyers who appreciate the value of engagement on an early settlement is a really important thing.

You know, and then I think the other thing is to be willing to mediate and to be involved in ADR efforts whenever those are available, and we used I think four different mediators in the case, which was really important.

And look, at the end I think part of it had to be being willing to push the case all the way to trial, and I think that maximized the value of the case.

So I mean those are really three main points.

MS. CASTILLO: Roberto, the pandemic halted the first trial and the defendants then asked the court to declare a mistrial. Why not request the court to resume the first trial?

MR. FINZI: So we actually thought about that a lot and the way the first trial was interrupted—this just shows how things went during the pandemic, how all of us had no idea what was going to happen—when the judge suspended it the first time, he’s like, oh, we’ll be back in 10 days. Everything here will blow over and, you know, don’t cancel your hotel rooms

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and we’ll start again right away, and so some of it was based on how long is this delay going to be.

We were also at some point reluctant to move for the mistrial because we felt like we had gotten some good rulings Bonnie alluded to on a plaintiffs’ expert and the judge had stricken some testimony.

Ultimately, though, the idea of having a jury that had sat for months and maybe even at some point, you know, a year or more with the plaintiffs’ case—because when the mistrial was called, it was I think the day before or the day after plaintiffs had rested, and so we found ourself in a situation where the jury had heard and seen the plaintiffs’ evidence, then taken, you know, a long break, and we were just a little concerned that a year later they would have made up their minds already and wouldn’t have the open mind needed to hear our case.

So we went back and forth on that and discussed with the remaining defendants, two of us still at the time, and then ultimately just made that strategic decision, but it wasn’t an obvious one.

MS. CASTILLO: Bonnie, shortly before the first trial, six of the 10 remaining defendants settled and a week into the first trial, another defendant settled, leaving three defendants to try the case. This probably wasn’t a good situation for the last three defendants, so how did this impact your preparation for trial?

MS. LAU: Yeah, it was tough.

It certainly impacted my team’s ability to sleep that week and I do want to just shout out the MoFo team and thank everybody for their incredible hard work during what were some very, very tough, long, sleepless nights.

In terms of strategy, Roberto alluded to this in his lightning round answer, it was just extraordinarily fast, how quickly defendants settled out and it was every other day. So I think we must have rejiggered and restructured our opening statements three or four times that weekend. There were a flurry of witnesses that had to be reassigned.

But the one thing that I do want to say—and I see some of our co-settling defendants out in the audience—is just, you know, how amazing the defense bar is. People were extraordinarily fantastic, supportive.

Even though they dropped out, they didn’t like jet off to a desert island and enjoy their cocktail. They stayed, they pitched in, they pretty seamlessly transitioned existing work product and draft examination outlines, and that really helped us through what was a very challenging situation.

The other component that I think was very challenging—and we confronted this in particular in the second trial—is as the defendants settled, we had these different components of the defense story that demonstrated the plaintiffs’ overreach, right?

So we wanted to tell the story of film capacitor manufacturers, which was separate from aluminum and tantalum. We wanted to tell the story of American companies. And so when AVX settled, it’s not that we couldn’t pick up that story, but we lost kind of the perspective of being able to tell it through the American company that had never attended any of the industry meetings in Japan, and that was exceptionally challenging.

MS. CASTILLO: Anu, given Judge Donato’s concerns about the lack of diversity in the practice of law, it must have been refreshing for him and the jury to see and hear from you. What were the advantages and also the disadvantages of being diverse at trial?

MS. REDDY: Let me start with some advantages, all right? Lawyers are quite boring, so am I, so I think it’s difficult for jurors to really pay attention while you’re presenting a really complicated case to them and I think when you have diverse people in the room, from a presentation point of view, it brings in a different cadence, a different style. It is a show, after all, right? And it’s a better show for the jury when you have different people in the show.

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And that diversity also brings with it different points of view and different worldly experiences, which affects the strategy and it affects how you really choose to present the case.

Being different also points the spotlight on you, so it’s a little bit of pressure when you’re different. Personally, when I was in the courtroom, I felt like, oh, I’m so tall, I’m so different, like everyone was watching me. So I felt like I had to be like on guard all the time and there wasn’t that much room for me to, you know, make mistakes. So I think that’s a disadvantage when you’re a diverse person in a courtroom.

MS. CASTILLO: I kind of want to float this question to Bonnie as well. Bonnie, I know you had a trial team that was diverse, from partner to the paralegal level. Was this strategic or just coincidence?

MS. LAU: It’s absolutely strategic. I think everybody who knows me knows, you know, I work on a lot of diversity issues in our profession and so when I select my teams, it’s really important to me that we have a variety of perspectives. I think everybody’s familiar with the research that shows when you have that diversity of opinions, you tend to come up with more creative ideas and hopefully arrive at better solutions.

And I think the other thing that I would say too is that, you know, look at our shifting population demographics. We are becoming increasingly diverse. Our jury pools are really diverse. And I think it helps us connect with a broader swath of jurors, when you have a really broad team that brings all sorts of shapes, sizes, perspectives to the table.

The other thing that I just wanted to say is I really am thankful to Judge Donato and the N.D. Cal. bench because they’ve really made diversity such a priority.

We’ve had that standing order now for years that encourages young attorneys to have speaking opportunities. If anybody is young in this audience and doesn’t know about it, go ask for this opportunity.

And, you know, one thing that I’ve heard from my female attorney friends who are across the v. is that there’s not as much accountability on the plaintiffs’ side, right? On the defense side we have clients who have a diversity imperative.

And so it’s actually been really nice to see Judge Donato and other judges in N.D. Cal. push back when the slate of proposed lead counsel is too homogenous.

And then lastly, just a pitch. Everybody please join ABA Women.Connected and Diversity.Advanced. It would be great to have as many advocates and allies as possible, as we try to continue to shift the needle on this.

MS. CASTILLO: That was overreaching. This is a CLA event, Bonnie.

MS. LAU: And thank you to GSI for spotlighting the next diversity panel. I think that’s such a critically important part of the conversation.

I’m sorry to meld organizations here.

MR. SAVERI: Let me just jump in on this.

You know, I do think the plaintiffs’ bar really has done a good job, so to the extent that there’s people on the other side of the v. kind of saying, well, the plaintiffs don’t do a good enough job or we can do better, I think this trial in itself shows what the plaintiffs’ bar has done and how seriously we take this.

I think the mission of our firm, among other things, is to train the next generation of antitrust lawyers. I mean we are all so fortunate to be practicing in this area in this state and we take the obligation to train the next generation very, very seriously and part of that is to being able to provide opportunities for all sorts of people from all sorts of background.

So I really do think we do a good job at that, and this trial in particular demonstrates that.

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MR. FINZI: Also, to build on that, I thought some of the happiest moments during the trial were when one of the young lawyers for either side was able to do their first examination or first cross-examination or first substantive argument before the court.

I remember those moments of after court that day going over and shaking somebody’s hand and saying, you know, hey, great job and welcome and congratulations, and it brought me back to the mentors I had that gave me my first opportunities. I feel like this "pay it forward" mentality in the bar of giving young people an opportunity to get up and do their first thing and make their first mistake or hit their first home run is a great thing about our profession and one that I’m personally proud of.

MR. SAVERI: Yeah and you know, when you try these cases, there are a lot of different personalities and you get to know everybody very well. What Roberto said is absolutely true, and I think one of the remarkable things about it is that I think that that was true regardless of what side of the v. you were on, and while we were very fierce adversaries, I think we were, as a group, generally supportive of those opportunities for everybody, and I certainly felt that and I know it was reciprocated.

MS. CASTILLO: This is a perfect segue into my next question and the next topic, which is experts.

IV. PRESENTATION OF EXPERT EVIDENCE AT TRIAL

MS. CASTI LLO: Anu, this is for you. So you examined the class’s technical expert, Adam Fontecchio, and were slated to cross-examine defendants’ economist Laila Haider.

How did you get this starring role, as a young attorney?

MS. REDDY: How? I’m not sure.

It is kind of being in the right place at the right time, but in some ways I think Joe and Steve might be able to answer the "how" better than I can.

But I think in terms of like the job I did on trial in the beginning, it was very heavy on expert work. While doing that, I developed a lot of relationships with all of the experts on the case. I had a big role in drafting all of the scripts and prepping the experts, designing the focus groups, and even impersonating Dr. Haider for one focus group that we did. I basically pretended to be Dr. Haider in front of the jury. And all of that really helped me engage with the expert material quite deeply.

So although at the point that I got these tasks I didn’t have the skill set I needed to really do the cross or do the direct, I felt like the firm, and Joe and Steve particularly, thought I could get there within the time frame that we had and that’s probably why I got those tasks.

MS. CASTILLO: Staying on the topic of experts, Roberto, the class claimed $427 million in damages.

Judge Donato struck testimony by your client’s expert witness that damages do not exceed $66 million.

Can you elaborate on what happened, and anything you would have done differently?

MR. FINZI: Yeah, it was actually tricky and interesting—to me at least—on a couple of different levels. We had made a very deliberate choice to not present a damages number of our own and that the theory we were going with was they have not proved their damages.

They had overreached. Their damages model included—and, you know, we’ll come to this in the mock summations, you know, the sale of every single capacitor made by every single defendant for every single product, and that was just way overblown.

And that raised the question then to us, we’re like, well, should we be presenting an alternative? If we’re saying that their $427 million number is wrong, what is the right number? And we made a kind of studied decision, mostly because of trebling of damages, that we did not want to present a number of our own.

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Now interestingly enough, plaintiffs didn’t present an alternative either, and the way we looked at their model at least was that the jury wasn’t going to be able to say, okay, I buy that there’s a conspiracy but I want to back out the part that film capacitors were involved, and how do I do that? What formula is there that allows me to back out the film capacitors?

Or what allows me to back out—if I find that the American companies weren’t part of this conspiracy, how do I back that out?

And so to some extent we felt like that uncertainty was going to be an advantage, in that it put the the plaintiffs to a sort of all or nothing. You either persuade them that the number is $427 million or they run a risk of finding the damages weren’t proven with sufficient specificity.

So it’s in that context that this issue came up.

We also had the problem that we didn’t want our expert to buy into the plaintiffs’ methodology and so again, if you’re proposing a number of your own, you’re sort of saying, yeah, well, I can accept this part of the methodology.

You know, the way it came out, we were ultimately happy with the way it came out. The judge struck it. I wouldn’t have, but not sure it really mattered at the end. We were very happy with how that testimony went.

Now it’s easy to say that because she ended up not getting crossed, so we would have seen how the cross went, but it ended very fortuitously on a Thursday afternoon or a Friday where we weren’t sitting over the weekend and the judge didn’t correct that part of it or didn’t grant the motion to strike until after the weekend, and so we were happy with how the jury was left on the last day of trial.

And then, you know, we settled over the weekend and so the cross never happened.

MS. CASTILLO: Joe, before the second trial against the last three defendants, the last had reached settlements of around $440 million, which was more than the $427 million that the class’s damages, the experts testified, was the overcharge incurred.

How much were you asking the jury to award and how did you intend to persuade the jurors to do so?

MR. SAVERI: Well, our single damage number was $427 million and the jury didn’t have any evidence of the settlements, so we were going to prove that number and we had very strong expert testimony to support that.

You know, frankly we felt like the issue of setoffs and enforceability was an issue, but we felt comfortable with the idea that it’s a happy problem to solve if you have an over-billion-dollar judgment and we would take it one step at a time.

MS. CASTILLO: Bonnie, during a break on the third day of the second trial and just before your partner was going to cross-examine the class’s damages expert Jim McClave, plaintiffs informed the court that they had settled with your client, Matsuo.

Can you tell us what happened during the cross-examination of Hal Singer during the first trial and how you think that impacted the strategy and timing of the settlement with your client in the second trial?

MS. LAU: Sure. So as background, Judge Donato had issued a Daubert ruling prohibiting Singer from relying upon DOJ/FTC guidelines in his qualitative analysis, so he used a corporate test from the guidelines in order to characterize certain defense communications as "suspect."

So after Singer testified on direct at the first trial, my partner, David Cross, raised with the court that he believed Singer’s testimony was based on these excluded guidelines and therefore, violated the court’s Daubert ruling.

And so this prompted Judge Donato to cross-examine Singer directly on the stand and he admitted that he did rely on the guidelines and, you know, this is that fierce moment that I was describing. Judge Donato exploded. He immediately

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struck Singer’s testimony and instructed the jury to disregard it.

And then later in the day he invited the defendants to brief, actually striking all of Singer’s testimony because he said, quote, the tentacles of that analysis pervaded all of Singer’s opinions, such that Judge Donato just couldn’t engage in a surgical strike here.

But unfortunately, that occurred on March 12, 2020. So even though the parties had a crazy flurry of emergency briefing over the weekend, San Francisco shut down the following Monday so the court never ruled on it, and of course we ended up in a mistrial.

But then fast forward two years to the second trial, I think plaintiffs didn’t want MoFo anywhere near one of their experts again and so, you know, we were in discussions, those accelerated, and we reached a resolution shortly before David was about to cross-examine McClave.

MR. SAVERI: From our perspective, that didn’t matter at all.

V. TRYING THE CASE DURING COVID-19

MS. CASTILLO: I want to talk about the pandemic, since it was a big part of both trials.

Roberto, I know you prepared for this trial at least twice, and probably more times, given there was some uncertainty about when the court would hold a new trial. Can you tell us how you handled preparing for a moving target, and managing expectations with your client?

MR. FINZI: It’s to some extent—and I don’t know if it was Anu who said it before—this is like a live show and so things are going to happen all the time and you’ve got to be prepared and you kind of go into this knowing I’m not going to be able to script it and nothing’s going to happen exactly on the day you think it’s going to happen and according to the schedule you think it’s going to happen.

That being said, you don’t necessarily plan for pandemics like this, and where it became most complicated, I think for all of us, is that we had—more than half of the witnesses were in Japan and had to come from Japan, and travel from Japan became very on again/off again.

Very complicated. There were different rules on how long people had to quarantine.

There were questions about whether or not party representatives could come over. Questions about whether or not people could testify from Japan or whether people could testify remotely or whether people could testify from other places in Asia remotely, and so we were constantly dealing with a constantly changing landscape, and it was frustrating.

It was frustrating to make a decision on day one, only to find out, you know, five days later that the rules of travel had changed and therefore the witness could be here and therefore your motion was moot.

But, you know, I think in a bigger scale, you’ve just got to roll with it and make the best decisions you can, based on the information you have and proceed that way.

It was—more than the client for us—it was keeping the team motivated and keeping the team safe. Most of our team was in from New York, they were away from home, they were away from their families, it was early in the pandemic, so we didn’t know what this meant.

At some point people were worried, you know, am I going to be locked into California, away from my home for 10 days or a month? What’s going to happen?

So it definitely presented challenges.

MS. CASTILLO: Joe, you tried this case twice.

Were there any efficiencies gained or lessons learned from the first trial that you then applied to the second trial?

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MR. SAVERI: Yeah, yes.

First of all, I think that when we started the first trial, we thought that we didn’t have enough time to get in all the evidence that mattered or we needed, and we learned from the first trial that we could do it quickly and we could probably do it even more quickly and so we were very comfortable with that.

I also think we realized the first week of trial was very important and so our initial week was an introductory expert, liability evidence, and we closed the first week with our damage expert.

And so I think that, you know, frequently in these cases—and I don’t know if it’s conceit or how much we fall in love with our experts—but we think that these cases are largely about expert analysis and antitrust economics.

You know, ultimately this was about a story, and we realized that if we could tell our story quickly and efficiently in the first week, we would have all the kind of benefits of being the first mover, and especially being able to have that story kind of tied up with a bow when the jury went home for the first weekend, I thought was very important to us.

The other thing I would say is we did a fair amount of focus group testing and I think one of the things we realized is that we could do a lot of that and do it remotely via Zoom and we learned to be very efficient about that.

MS. CASTILLO: Bonnie, the courtroom parties had an innovative jury selection process that allowed the jury to be empaneled quickly, despite COVID concerns and the significant number of juror no-shows before the second trial. Can you talk about this process and whether it should be here to stay?

MS. LAU: Sure. So in advance of the second trial, Judge Donato required all of our prospective jurors to complete a pretty thorough written questionnaire. It screened for vaccination status, COVID, hardship, and then asked all of your basic voir dire questions.

And then a couple days before the first day of trial, we met over Zoom with the court. We reviewed all the written questionnaires together and it helped us prescreen and excuse a handful of the prospective jurors.

This, I think, contributed to a lot of efficiency the first day. I want to say we were closer to two hours the second time around, whereas the first time jury selection took us the better part of a half-day.

And I at least—I welcome the group’s thoughts—would welcome continuing that process into the future, even after pandemic concerns recede.

I thought that it gave the jurors a real opportunity to provide unvarnished, more fulsome answers to the questions than they might have delivered on the spot in the courtroom, and better helped us assess the jurors that we thought might be favorable to our case.

MS. CASTILLO: Anu, you told me that it felt like you were preparing for trial for two years straight.

MS. REDDY: I was.

MS. CASTILLO: Can you share with us how you kept your morale up, especially during the pandemic?

MS. REDDY: So I know Roberto just highlighted a lot of the difficulties that came with the pandemic, and I’m sensitive to that and I understand that, but for me personally, the pandemic saved me.

I was at home and I was able to channel my productivity, have "on time," "off time," really be present in my life, rather than just coming back at the end of the day and watching my life. I think that helped with my mental health.

And also there are obvious answers like exercise, eat healthy, get two dogs, I think those are all important things.

MS. CASTILLO: So I want to thank the panelists for answering these questions about the trial and now I want to give them an opportunity to present the

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closing statements that they would have given, had trial proceeded.

VI. MOCK CLOSING STATEMENTS

MS. CASTILLO: So Joe, you have six minutes.

MR. SAVERI: So one of the big differences, of course, is we had more than six minutes.

MR. FINZI: Not much more than six minutes.

MR. SAVERI: But after you hear this, guys, you’re not getting any of your money back, just so we’re clear about that.

MR. SAVERI: Good afternoon.

On behalf of Mr. Kryzwinski, Mr. Lubman, their companies, and the 1,763 other purchasers of capacitors in the United States, I want to thank you.

We’ve covered a lot of territory in the last two weeks and I just wanted to say how grateful we are for your time and your attention. We’ve done our best to organize and present our case in the time we’ve had.

For over 12 years, the defendants illegally conspired to reduce, eliminate, and prevent competition. They agreed with one another that they would raise prices when they could, and when the market was forcing prices down, they agreed to slow it down.

In doing so, the defendants broke the law and caused the plaintiffs to pay higher prices than they otherwise would have. Now, during the opening, the defendants said and we heard them say, "Well, we own it," but after hearing the evidence the last two weeks, what did they do? They didn’t own it, they ran away from it.

You didn’t hear one defense witness say they did it; that they violated the antitrust law, that there was a conspiracy, that they joined it, that it occurred in the United States and indeed here in California.

We didn’t hear them say that they took the money that did not belong to them. We didn’t hear them say they were willing to give any of that money back, even though they pled guilty to participating in the conspiracy. Did you hear any indication of remorse or apology for what they did?

Now, there are four main points to this lawsuit. First, that there was a price-fixing conspiracy; second, that the defendants participated in the conspiracy; third, that the conspiracy caused plaintiffs’ damage; and fourth, how much are those damages.

[Referring to slide presentation.] So here’s a chart which shows the 22 companies involved in the conspiracy, and as I said when I spoke to you two weeks ago, the evidence of the conspiracy is different for each of the 22 companies.

And as we saw, there was no meeting involving all 22 defendants. Some of the defendants went to some meetings and not to others. Some had clandestine meetings in coffee shops or bars. Some stayed out all night drinking. Some played golf. Some talked on the telephone. Some by email. And some had private conversations we will never know about because they deny they occurred or they destroyed the evidence.

And I was waiting for someone who was actually involved in the conspiracy to come in, but you didn’t see one. Did that occur to you? Where were Mr. Okubo or Mr. Kakizaki? You saw them in the openings.

Has it occurred to you that you did not hear from one person who was actually involved in the decision-making? Not one of the presidents, not one of the directors, group managers, sales managers, or any of the persons who attended the meetings for Chemi-Con, or in fact any of the companies involved in the conspiracy.

Instead we heard from Mr. Inoue who, at the time of the conspiracy, was a very young man, a low-level employee. And he said everything he testified about at the trial, he learned from one of the lawyers sitting here today. The lawyer for UCC.

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Now, defendants said that the conspiracy did not involve film capacitors but we learned that the companies that manufactured film capacitors also met and exchanged information regularly.

Remember Ishigami? He was a participant in dozens and dozens of film meetings and he testified that he regularly met with competitors before the film meetings to confirm pricing information that each were quoting to certain customers. He testified about specific conversations with Shinyei. He also testified that he met severally with Panasonic, Okaya, Hitachi, Toshin Koygo, Chemi-Con, and Nitsuko. And Ishigami testified that when he was at the meetings, he made notes and he first denied that there was any discussion at all of pricing, but what did he say when we confronted him with the documents? He admitted that he falsified documents.

He concealed what they were doing.

And as we also learned from Ishigami, he was aware the electrolytic manufacturers were having group meetings at the same time.

Now you heard a lot about direct and circumstantial evidence. Well, when we talk about circumstantial evidence, one pretty good example are all the efforts taken to conceal the conspiracy, to cover their tracks. We have seen dozens of examples of these. If one is not doing something wrong, if one is guilt-free and not involved in a price-fixing conspiracy, there’s nothing to hide, there’s nothing to conceal. And when someone makes such a blatant effort many, many times, that is strong, very strong evidence of a conspiracy.

And we have examples from every defendant. They tried to hide the truth and they tried to hide the truth from this court and they tried to hide it from you and my clients. They tried to hide it from you.

MS. CASTILLO: Thank you. All right. Bonnie.

MS. LAU: And I’ll just caveat this, that we settled on day three, so this is based on how I would have put the case in.

Good afternoon. My name is Bonnie Lau, and along with my colleagues at Morrison & Foerster, I represent defendant Matsuo Electric Co., Ltd.

Thank you so much for your time and patience during this trial.

On day one of this case, class counsel promised to prove to you a 12-year sweeping global conspiracy that encompassed 22 defendants, three capacitor types, and he claimed injured 1,800 businesses in the United States, where they suffered higher charges for every single capacitor that they purchased.

But the evidence at trial has shown that that sweeping conspiracy never happened. It’s not what Matsuo participated in and it’s not what Matsuo pleaded to.

Instead, as you heard from Matsuo’s former employee Satoshi Okubo, he admitted that on the limited occasions where a price-fixing agreement was reached, it was a narrow agreement with a specific customer, a specific product, and primarily in Japan.

He expressed remorse for what he did, but he also explained that this purported conspiracy is not nearly as broad as class counsel would have you believe.

It did not include any film capacitors, it certainly didn’t include all capacitors, and it didn’t include 1,800 U.S. customers.

In fact, as Mr. Okubo explained to you, the sweeping conspiracy that plaintiffs would have you believe is simply not feasible because of the significant variations in capacitor type, size, use, specification, customer, and product. In fact, not a single witness during this entire two-week trial testified to the sweeping conspiracy. Not even the witnesses that were cooperating with the plaintiffs.

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Despite the evidence showing that any conduct here was narrow and specific, plaintiffs are still seeking to be compensated for every single capacitor purchased over 12 years, for $427 million, but I want you to remember nearly 40 percent of these damages are attributable to two American suppliers, AVX and Kemet, who had no participation whatsoever in the industry meetings in Japan.

So Matsuo is here today accepting full responsibility for what it did, but defending where plaintiffs have overreached and sought damages for conduct that is not justified by the evidence that you heard today. Thank you.

MR. FINZI: So when this trial started almost a month ago now, I told you very plainly, very clearly, as bluntly as I could, that the proof would show that my client, NCC, had been involved in an illegal agreement with competitors to fix prices of certain capacitors sold by certain manufacturers to certain class members, and that, ladies and gentlemen, is what the proof has shown.

The proof has shown a conspiracy by certain manufacturers to fix prices of certain products sold to certain class members, but that is not what the plaintiffs here have alleged, and it’s not what they’re asking you to compensate them for.

What they’re asking you to compensate them for is something much, much broader. What they’re asking you to find and what they’re asking you to award them in damages, is based on an impossibly grand conspiracy that involves the sale of every single capacitor sold by 22 different defendants to every single class member over a period of 12 years. Think about it.

You have heard in this case the evidence about how those capacitors differ. How they go from as small as a fingernail and the cost of a penny, to as big as a van and $30,000, and you are to believe that every single one of those capacitors sold by every single defendant for a period of 12 years was the subject of a conspiracy?

That is not what the evidence has shown.

So ladies and gentlemen, look, the plaintiffs are allowed to allege what they allege. That’s how it works in our system. They make a claim, they ask for a certain amount of money. But with that right, with that right to make a claim, comes an obligation, a burden; a burden to prove to you, by a preponderance of the evidence, that they have suffered those damages and on this record, on these facts, with what you have heard, that burden hasn’t been met. Thank you.

MS. CASTILLO: Thank you to our panelists.

VII. TRIAL TIPS

MS. CASTILLO: So I actually didn’t think we would have time for this but we do have a few minutes for everyone to give a few words, so I’m going to call this section "pearls of wisdom." I’m going to ask each person to give a little piece of advice.

So Joe, do you have any advice for appearing in front of Judge Donato?

MR. FINZI: We’re on tape, Joe. You have rights.

MR. SAVERI: I’m kind of looking out. I think one of the things you have to do is be prepared to be flexible, because what you predict is going to happen is predictably not going to be what is going to happen. And so being able to be kind of in the moment, being able to be flexible about that, I think is super important.

I guess the other thing I would say is, you know, there is a real premium on being willing to take bad news and a bad result in stride and being able to move forward because it can be a little bumpy, but those are really the most important things.

MS. CASTILLO: Bonnie, do you have any tips for effective time management during trial?

MS. LAU: Absolutely. I mean, I think it’s really important to tell your story as precisely and

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concisely as possible to the jury. So it’s really important, as Roberto was saying, for us to map out as a team on the defense side, you know, precisely how many minutes are allocated to every particular witness, and to make sure that we are not overlapping and drawing the same facts out of different individuals.

MS. CASTILLO: Anu, do you have any advice for keeping the jury engaged or even awake during trial?

MS. REDDY: I think I kind of talked about this before in a different answer, which is cadence and style are important. So being methodical about every change you introduce in the courtroom can make a huge difference to how much attention they’re paying because the courtroom is so dull, that every change is magnified like multiple times.

And I would say, spend the money on a really good trial technician. It is completely worth it. A smooth presentation goes a long way, in terms of like how your case is presented. It also like shows the judge that you’re respectful of the jury’s time and you want the case to be smooth for the jury.

MS. CASTILLO: And Roberto, any tips you would give to someone trying their first antitrust case, on the eve of trial?

MR. FINZI: Well, it was my first antitrust case. I think people get caught up in antitrust cases because it’s at this intersection of law and economics and statistics and all that. What this case showed me, as much as others have, is that the jury really doesn’t understand the depths of the economics. I don’t understand the depths of these economics.

I’ll be honest with you, I put on experts in these cases where I didn’t fully understand the opinions they had and the theories they had, but what’s important about that is that the jury doesn’t either.

So all you got to do is know it a little bit better than the jury and present it in as simple of terms as possible and in a way that, as somebody said before—I think Joe said—that tells a story rather than proves a bunch of mechanical points.

I really can’t stress that enough.

And then another thing just to end on, because I thought we did actually a pretty good job in this trial—and this is not just for antitrust stuff—is try to be collegial to people.

I think, you know, the whole reputation we’ve gotten as lawyers is bickering with each other and trying to undermine each other. I think jurors pick up on it, I think other younger lawyers pick up on it and members of the team and at the end of the day, this stuff is incredibly important but it’s just about money.

At the end of the day, the relationships and the practice of law and the kind of—not to sound all corny—but the higher calling part of it, and how you’re going to feel about yourself when the trial’s done and when the trial day’s done, that’s going to be more important.

MS. CASTILLO: All right. Thank you, panelists, and we appreciate your time and all the advice you’ve given us.

——–

Notes:

^1. Anupama Reddy is Associate Competition Counsel at Google Inc. She is a member of the California bar and a member of the Executive Committee of the California Lawyers Association Antitrust and Unfair Competition Law Section.

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