The City Council agreed in a closed session Monday, May 6, to have the city serve as a representative for various cities and public entities in a class-action lawsuit against Sony, Panasonic, Hitachi, LG Chem, Samsung and SANYO. The companies are facing numerous legal challenges relating to price fixing in California and New Jersey, though the vast majority of lawsuits are from private individuals seeking to represent the broader consumer base.
The electronics giants are alleged to have fixed prices of rechargeable lithium-ion batteries between 2001 and 2011. The batteries are commonly used in electric products such as laptop computers, smartphones and GPS devices. According to a statement from City Attorney Molly Stump, the city has purchased many such devices, including the Toughbook laptops used by police officers in the field.
According to Stump, Palo Alto's case will be consolidated with many others brought against the companies in the U.S. District Court, Northern District of California. The companies are also facing at least 10 lawsuits in New Jersey, with the plaintiffs in most cases being individuals and law firms.
Stump said that the only California public agency that to her knowledge has joined the battle thus far is City College of San Francisco. The council decided to initiate the class-action suit to both recover funds from the companies and to send a signal about fairness in the marketplace, Stump said.
Though according to Stump the sum recovered probably won't be too large, the bigger issue is the "principle of making sure that we are standing up for the city's recovery when we have been overcharged, when we can do so in a very efficient way."
Palo Alto's case will be handled by the law firms of Renne Sloan Holtzman & Sakai LLP and Green & Noblin PC. Green & Noblin has already filed a class-action suit against the battery manufacturers, alleging price fixing, according to the company's website.
The firms will work on a contingent-fee basis with the city not paying any legal fees or incurring other costs, according to Stump.
"We don't have any out-of-pocket costs to pursue this recovery," Stump said.
Another reason the council decided to join the legal challenge has to do with its general view that the famously high-tech city should be a leader in promoting the free-market economy, Stump said. The city recognizes that Silicon Valley's "wonderful technology and innovation marketplace" works well when companies play by the rules.
She said she expects the council's decision to bolster the efforts of other plaintiffs seeking recovery from the electronic companies.
"It gives the plaintiffs' group a stronger voice and says that there is harm to public entities as well as to individuals who have purchased one of these devices," Stump said.