Palo Alto to launch class-action lawsuit against battery makers

Sony and Panasonic among companies accused of conspiring to fix prices

Palo Alto on Monday became one of California's first public agencies to charge into the legal battle against global companies accused of conspiring to fix prices of lithium-ion batteries.

The City Council agreed in a closed session Monday 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 of 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.

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Like this comment
Posted by Not-Impressed
a resident of Another Palo Alto neighborhood
on May 7, 2013 at 3:43 pm

So, how much money does the City think that it has lost because of this alleged price fixing? Are we talking hundreds of dollars, or hundreds of thousands of dollars?

How is the City going to prove its loss? If it knows now how many batteries it has purchased in the past, why not tell us now?

Another waste of time.

Like this comment
Posted by Craig Laughton
a resident of College Terrace
on May 7, 2013 at 8:30 pm

This appears to be one of those tiresome symbolic green accusations. Why? Because lithium-ion battery technologies are so important to the notion that we can all get along on electric vehicles. The cheaper they are, then the more acceptance. There is very little consideration of how these batteries get recharged, which is a much more important issue than the cost of the batteries.

Once again, Palo Alto city council goes out on a limb, with its own saw to cut it off.

Like this comment
Posted by Lee
a resident of College Terrace
on May 7, 2013 at 10:36 pm

Unless I'm missing something here, the city is devoting resources to pursue a law suit that if ultimately successful, will net the litigating law firms millions in fees from a settlement, and the city will get a check for $5, typical for a class action participant. I'd say the city has too many lawyers on staff if this is what they are doing.

Like this comment
Posted by A Noun Ea Mus
a resident of Professorville
on May 8, 2013 at 11:16 pm

I have it on good authority that this lawsuit is expanding. Also being sued for local price fixing, and added to the this very class action suit, is Leslie Salt Company. There will be a number of lawsuits incoming, listing alphabetically.

First One Up..

A. Salt and Battery

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