May 21,  2024 Chinese state-owned enterprise Irico Group Corporation and its subsidiary Irico Display Devices Co. face a potential default judgment for more than $2.4 billion in a long-running price-fixing lawsuit brought by classes of American purchasers of cathode ray tubes. 

Special Master Vaughn R. Walker, appointed by U.S. District Judge Jon S. Tigar, recommended the default judgment as a sanction for discovery misconduct. The Special Master’s report and recommendation found that Irico’s misconduct over the course of the litigation showed “contempt for th[e] court,” “defied the basic responsibilities of a civil litigant in the United States,” and reflected a “malign strategy” under which “evidence . . . grew stale” and “Irico’s own witnesses . . . disappeared.”  The report included a litany of specific examples including failures to preserve and spoliation of both electronic and physical evidence, false representations to the court, an appeal that delayed the litigation for a year, and failures to produce key witnesses.  It concluded that no sanction less than a default judgment would suffice as a remedy.

Judge Tigar will now consider whether to adopt the Special Master’s report and recommendation.  If that occurs, Irico will be required to pay plaintiffs’ attorneys’ fees, and the court will determine the total damages due.

The direct purchaser class of plaintiffs is represented by R. Alexander Saveri, Geoffrey C. Rushing, Matthew D. Heaphy and David Y. Hwu of Saveri & Saveri Inc.; Steven F. Benz, Gregory G. Rapawy, and Robert C. Klipper of Kellogg Hansen Todd Figel & Frederick PLLC.  The indirect purchaser class of plaintiffs is represented by Mario N. Alioto and Lauren C. Capurro of Trump Alioto Trump & Prescott LLP; and Joseph W. Cotchett, Adam J. Zapala, James Gerard Beebe Dallal, and Imtiaz A. Siddiqui of Cotchett Pitre & McCarthy LLP.

The case is In re Cathode Ray Tube (CRT) Antitrust Litigation, MDL No. 1917, No. 4:07-cv-05944, in the U.S. District Court for the Northern District of California.