Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd.

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 OPTRONIC TECHNOLOGIES, INC, 8 Case No. 5:16-cv-06370-EJD Plaintiff, 9 ORDER GRANTING PLAINTIFF’S v. MOTION FOR EQUITABLE RELIEF 10 AND JUDGMENT ON UCL CLAIM NINGBO SUNNY ELECTRONIC CO., 1] LTD., et al., Re: Dkt. No. 582 a 2 Defendants. □□ 13 Pursuant to 15 U.S.C. § 26, Cal Bus. and Prof. Code § 17200, and Federal Rules of Civil

14 || Procedure 54(b) and 58(b)(2)(B), Plaintiff Optronic Technologies, Inc. (“Plaintiff or “Orion’’) 3 15 || moves this Court for equitable relief and judgment on its claim arising under California’s Unfair O16 || Competition Law (“UCL”). The Court took the matter under submission for decision without oral

17 || argument pursuant to Civil Local Rule 7-1(b). For the reasons below, Plaintiffs motion is

18 || GRANTED. 19 I. Background 20 The basic facts and procedural history underlying this case are well known to the Court 21 and the parties. The Court recounts only the pertinent background here. 22 On November 26, 2019, and after a six-week jury trial, the jury returned a verdict for 23 Plaintiff and against defendants Ningbo Sunny Electronic Co., LTD (“Ningbo Sunny” or, for the 24 || purposes of this motion, “Defendant”), Sunny Optics, Inc. (“Sunny Optics”), and Meade 25 || Instruments, Corp. (“Meade”) on all claims. Dkt. No. 501. The jury found that the defendants had 26 || conspired to fix prices or credit terms in violation of the Sherman Act Section 1 (Claim 1), had 27 CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 conspired to allocate the market for telescopes in violation of the Sherman Act Section 1 (Claim 2 || 2), had attempted to monopolize the market in violation of the Sherman Act Section 2 (Claim 3), 3 || had conspired to monopolize the market in violation of the Sherman Act Section 2 (Claim 4), and 4 || that the acquisition of Meade by Ningbo Sunny and Sunny Optics harmed competition in violation 5 of the Clayton Act Section 7 (Claim 5). /bid. The jury found that Orion suffered $14 million in 6 || damages for each of the Sherman Act claims and $16.8 million for the Clayton Act Claim. Jbid. 7 After the verdict, Sunny Optics and Meade entered bankruptcy and the litigation was 8 stayed as to them. Dkt. Nos. 511,512. On December 5, 2019, the Court entered a partial 9 || judgment against Ningbo Sunny on Plaintiff's damages claims awarding Plaintiff $50,400,000 in 10 || accordance with the verdict’s award of $16,800,000 as trebled pursuant to 15 U.S.C. §15(a). Dkt. 11 || No. 518. On February 21, 2020, Plaintiff filed a motion for equitable relief and judgment on its 12 || UCL claim. Dkt. No. 583 (“Motion”). Defendant opposes the motion. Dkt. No. 596 13 (“Opposition”). 14 On April 3, 2020, the Court partially granted Defendant’s Motion to Alter or Amend 3 15 || Judgment (Dkt. No. 534) and simultaneously granted Plaintiff's Motion for Attorneys’ Fees and a 16 || Costs (Dkt. No. 558). On the same day, the Court issued an Amended Partial Judgment (Dkt. No. 5 17 || 630), which amended the damages to $52,030,371.73 plus post-judgment interest, in accordance S 18 || with the post-trial motions. The Court denied Ningbo Sunny’s Renewed Motion for Judgment as 19 || a Matter of Law (Dkt. No. 556) and Motion for a New Trial (Dkt. No. 557). The Court now 20 || considers Plaintiff's motion for a permanent injunction and its request for judgment on the 21 remaining UCL claim. 22 II. Discussion 23 A. Plaintiff’s Request For a Permanent Injunction Under Section 16 24 Under Section 16 of the Clayton Act, courts have the power to grant injunctive relief for 25 || violations of the antitrust laws. 15 U.S.C. § 26 (authorizing “[a|ny person . . . [to] have injunctive 26 || relief... against threatened loss or damage by a violation of the antitrust laws ... when and under a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 || the same conditions and principles as injunctive relief against threatened conduct that will cause 2 || loss or damage is granted by courts of equity”). Where a violation of law has already been 3 || established, injunctive relief should be granted if “there exists some cognizable danger of recurrent 4 || violation.” Fed. Trade Comm’n v. Qualcomm Inc., 411 F. Supp. 3d 658, 812 (N.D. Cal. 2019) 5 (granting injunctive relief under the FTC Act after the court found violations of the FTC and 6 Sherman Acts) (citing United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953). 7 In general, “[t]o obtain permanent injunctive relief, a plaintiff must show (1) that it has 8 suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are 9 || inadequate to compensate for that injury; (3) that, considering the balance of hardships between 10 || the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would 11 not be disserved by a permanent injunction.” California ex rel. Lockyer v. U.S. Dep’t of Agric., 12 || 575 F.3d 999, 1019-20 (9th Cir. 2009) (internal quotations and citations omitted). 13 These four elements apply when considering relief under Section 16 of the Clayton Act. 14 || The Supreme Court has stated that Section 16, “which was enacted by the Congress to make 3 15 available equitable remedies previously denied private parties, invokes traditional principles of a 16 || equity.” Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 131 (1969); 15 U.S.C. § 5 17 || 26 (injunctive relief is authorized “when and under the same conditions and principles as S 18 injunctive relief... is granted by courts of equity”). The traditional principles of equity call for 19 || the four-step analysis above. eBay Inc., v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006) 20 || (“According to well-established principles of equity, a plaintiff seeking a permanent injunction 21 must satisfy a four-factor test before a court may grant such relief.”). 22 “The party seeking an injunction ‘has the general burden of establishing the elements 23 || necessary’ to obtain relief.” BladeRoom Grp. Ltd. v. Emerson Elec. Co., No. 5:15-CV-01370- 24 || EJD, 2019 WL 1117537, at *2 (N.D. Cal. Mar. 11, 2019) (citing Klein v. City of San Clemente, 25 584 F.3d 1196, 1201 (9th Cir. 2009)). Ultimately, “[t]he decision to grant or 26 || deny permanent injunctive relief is an act of equitable discretion by the district court.” eBay, Inc., a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 547 USS. at 391. 2 i. Irreparable Injury and Inadequacy of Monetary Damages 3 The first two elements are significantly interrelated. “Irreparable harm may be established 4 || where there is the fact of an injury, such as that arising from a breach of contract, but where there 5 is an inability to ascertain the amount of damage.” DVD Copy Control Ass’n, Inc., 176 Cal. App. 6 || 4th at 722. “In other words, to say that the harm is irreparable is simply another way of saying 7 || that pecuniary compensation would not afford adequate relief or that it would be extremely 8 difficult to ascertain the amount that would afford appropriate relief.” /bid. Therefore, the Court 9 || considers the first two elements together. 10 Plaintiff raises three arguments regarding irreparable harm. First, Plaintiff argues that it “is 11 suffering from irreparable and non-compensable harm because Defendant is engaged in a 2 judgment avoidance scheme.” Mot. at 12. Defendant argues that Plaintiffs allegations regarding 13 Defendant’s post-judgment conduct are irrelevant to the injunctive relief Plaintiff seeks under 14 Section 16. Opp. at 6-8. The Court agrees that the equitable relief to which Plaintiff is entitled 3 15 || under Section 16 is not meant to provide a remedy for Defendant’s post-judgment misconduct. a 16 || A permanent injunction cannot be ordered merely because the requesting party did not receive the 5 17 || full extent of the legal relief it sought. See BladeRoom Grp. Ltd., No. 15-cv-01370, 2019 WL S 18 1117537, at *3. To the extent that Defendant’s post-judgment misconduct demonstrates an 19 || unwillingness to cease its anti-competitive behavior, however, such misconduct offers evidence 20 || that the legal violations established at trial are ongoing or likely to recur. These allegations thus 21 || weigh in favor of finding a threat of irreparable injury. 22 Plaintiff next argues that Defendant’s violations of antitrust laws have caused structural 23 || harm to the U.S telescope market and that such injury will become irreparable if Defendant 24 || intentionally puts Meade out of business. Defendant does not directly address this argument. The 25 || Court agrees with Plaintiff that Defendant’s decision to forego profit by refusing to supply 26 || products to its own wholly-owned subsidiary evidences Defendant’s intent to unlawfully restrain a CASE NO.: 5:16-CV-06370-EJD 28 |} ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 competition. Verizon Commce’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 409 2 || (2004) (“The unilateral termination of a voluntary (and thus presumably profitable) course of 3 dealing suggest[s| a willingness to forsake short-term profits to achieve an anticompetitive end.”) 4 || (quoting Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 6018, 610-11 (1985) 5 (emphasis in original). The jury found that Defendant’s acquisition of Meade created a reasonable 6 || likelihood of substantially lessening competition or creating a monopoly, and the Court finds that 7 || eliminating Meade as a competitor entirely would achieve a similar result by over-concentrating 8 || the telescope market. Such an injury to the market would be irreparable. 9 Defendant argues that this potential injury to Plaintiff and to the market is merely 10 || speculative. To support a permanent injunction under Section 16, however, it is enough to show 1] “threatened loss or damage by a violation of the antitrust laws” if injunctive relief is not granted. 12 15 U.S.C. § 26; Zenith Radio Corp., 395 U.S. at 130 (“section 16. . . authorizes injunctive relief 13 || upon the demonstration of ‘threatened’ injury. That remedy is characteristically available even 14 || though the plaintiff has not yet suffered actual injury.”). In any event, the jury expressly found 3 15 || that Plaintiff did suffer actual injury here. See, e.g., Verdict Form, Dkt. No. 501 at 5. The jury’s a 16 || verdict and the evidence on which it was based are sufficient to demonstrate that the threat of 5 17 || irreparable injury to the market is more than speculative. S 18 Finally, Plaintiff argues that “[i]f the structural problems caused by Defendant go 19 || uncorrected, Orion faces the danger of losing its business.” Mot. at 12. Defendant contends that 20 || Plaintiff has not shown that it actually risks losing its business, and that the loss of Plaintiff's 21 business would be a “purely monetary injury.” Opp. at 8 (citing Colorado River Indian Tribes v. 22 Town of Parker, 776 F.2d 846, 850-51 (9th Cir. 1985). 23 The Court finds that Plaintiff has shown sufficient evidence that its business would be 24 threatened with extinction in the absence of injunctive relief. At trial, Orion presented evidence, 25 || without objection from Defendant, that if Defendant continues its anticompetitive conduct, Orion 26 || would go out of business. See, e.g., Trial Tr. at 1771:21-23 (Q. And do you have any concerns a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 about what will happen to Orion in the event that you don’t receive that relief? A. They’re going 2 || to kill us.); id. at 2499:24-2500:2 (discussing Defendant’s lack of objection to evidence of 3 || Plaintiffs financial distress). This evidence is sufficient to show that Plaintiff faces the threat of 4 || going out of business. See hiQ Labs, Inc. v. LinkedIn Corp., 938 F.3d 985, 993 (9th Cir. 2019) 5 || (finding “ample support” for the asserting that the survival of the plaintiff's business was 6 || threatened absent an injunction, where the plaintiff's CEO made statements that without injunctive 7 || relief, the business would have to “lay off most if not all its employees, and shutter its 8 operations.”). 9 The threat to Plaintiffs business is sufficient to establish irreparable harm. Am. Passage 10 || Media Corp. v. Cass Comme’ns, Inc., 750 F.2d 1470, 1474 (9th Cir. 1985) (“The threat of being 1] driven out of business is sufficient to establish irreparable harm.”). “[T]he loss of . . . an ongoing 12 || business representing many years of effort and the livelihood of its . . . owners, constitutes 13 irreparable harm. What plaintiff stands to lose cannot be fully compensated by subsequent 14 || monetary damages.” AiQ Labs, Inc., 938 F.3d at 993 (quoting Roso—Lino Beverage Distributors, 3 15 || Inc. v. Coca—Cola Bottling Co. of New York, Inc., 749 F.2d 124, 125-26 (2d Cir. 1984) (per a 16 || curiam)). Defendant cites Colorado River Indian Tribes to support its argument that the loss of 5 17 || business would be a purely monetary injury. That case is inapposite. In that case, the plaintiff did S 18 || not face the threat of being driven out of business, but rather the threat of loss of income due to a 19 tax increase. Colorado River Indian Tribes, 776 F.2d at 851. 20 ii. Balance of Hardships 21 In determining whether to grant Plaintiffs motion for a permanent injunction, the Court 22 || also considers the balance of the hardships to the parties. Taleffv. Sw. Airlines Co., 828 F. Supp. 23 |} 2d 1118, 1123 (N.D. Cal. 2011), aff'd, 554 F. App’x 598 (9th Cir. 2014). When considering 24 || injunctive relief, “courts ‘must balance the competing claims of injury and must consider the 25 effect on each party of the granting or withholding of the requested relief.’” Winter v. Nat. Res. 26 || Def. Council, Inc., 555 U.S. 7, 24 (2008) (quoting Amoco Prod. Co. v. Gambell, 480 U.S. 531, 542 a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 (1987)). 2 Plaintiff argues that it “will continue to suffer from the effects of Defendant’s continuing 3 || unlawful behavior, as well as the structural damage Defendant inflicted on the U.S. telescope 4 || market, absent the requested relief.” Mot. at 13-14. Plaintiff argues that in contrast, the proposed 5 || injunction would impose no hardship on Defendant. /bid. In fact, the relief requested— 6 || specifically, selling products to Meade and to Plaintiff on non-discriminatory terms—would be 7 || profitable for Defendant. bid. Defendant does not address this factor directly. In arguing that the 8 || proposed injunction is overbroad, however, Defendant argues that the injunction would 9 || significantly burden the “everyday functions of its business.” Opp. at 6. 10 As discussed above, Plaintiff stands to lose its business if Defendant’s misconduct 11 continues. The primary potential burden that Defendant raises is that it would be unable to 12 communicate with one of its customers, Celestron. The Court addresses this concern in Part C 13 || below. In comparison to the potential harm to Plaintiff, the potential burden on Defendant’s 14 || business operations as a result of the injunction ordered herein is slight. Thus, the Court finds that 3 15 || the balance of hardships tilts in favor of Plaintiff. a 16 iii. Public Interest 5 17 “Whereas the balance of equities focuses on the parties, ‘[t]he public interest inquiry 18 || primarily addresses impact on non-parties rather than parties,’ and takes into consideration “the 19 || public consequences in employing the extraordinary remedy of injunction.’” iQ Labs, Inc., 938 20 || F.3d at 1004 (citing Bernhardt v. Los Angeles Cty., 339 F.3d 920, 931-32 (9th Cir. 2003)). “By its 21 very nature, the determination that [a defendant] has violated the Sherman Act and that ‘the 22 || wrongs are ongoing or likely to recur’ is a finding that an injunction is in the public interest 23 || because it will restrain the defendant from further anticompetitive conduct.” Qualcomm Inc., 411 24 || F. Supp. 3d at 813 (citing F.7.C. v. Evans Prod. Co., 775 F.2d 1084, 1087 (9th Cir. 1985)). 25 In this case, the jury found that Defendant violated Sections 1 and 2 of the Sherman Act 26 || and Section 5 of the Clayton Act. As discussed in Part (i) above, Defendant’s refusal to supply a CASE NO.: 5:16-CV-06370-EJD 28 |} ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM _

1 Meade is likely to cause over-concentration of the telescope market. Injunctive relief is necessary 2 || to protect the market from over-concentration by preventing Defendant from further violating 3 antitrust laws. The Court, therefore, finds that it is in the public interest to issue an injunction 4 || prohibiting Defendant from engaging in conduct previously found to violate the law. 5 || See California v. American Stores Co., 495 U.S. 271, 284 (1990) (“We have recognized when 6 || construing § 16 that it was enacted not merely to provide private relief, but . . . to serve as well the 7 || high purpose of enforcing the antitrust laws.”). 8 Because the Court finds that Plaintiff has established the prerequisites for injunctive relief, 9 || the Court concludes that a permanent injunction is warranted under Section 16 of the Clayton Act. 10 B. Plaintiff’s Request for Entry of Judgment On UCL Claim 11 Plaintiffs third cause of action in its amended complaint alleges that Defendant violated 2 California’s Unfair Competition Law (“UCL”). First Am. Compl. ff 139-141. Before trial, the 13 || parties agreed that the claim would not be tried before the jury and that the Court should rule on 14 || the claim following the jury verdict. Joint Pretrial Conference Statement, Dkt. No. 331, at 20-21 3 15 (“The parties agree that Orion’s claim under [the UCL] is an equitable claim that should be tried to a 16 || the bench and not the jury. The parties also agree that the Court should rule on Orion’s UCL 5 17 || claim after the jury has returned its verdict.”). Plaintiff now seeks judgment and relief on this S 18 claim. Defendant did not raise any arguments in opposition. 19 “The UCL broadly prohibits ‘any unlawful, unfair or fraudulent business act or practice.’” 20 || Alvarez v. Chevron Corp., 656 F.3d 925, 933 (9th Cir. 2011); quoting Cal. Bus. & Prof. Code 21 § 17200). “By proscribing any unlawful business practice, [the UCL] borrows violations of other 22 || laws and treats them as unlawful practices that the unfair competition law makes independently 23 actionable.” Cel—Tech Commce’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 180 24 || (1999) (citation and internal quotation marks omitted). Thus, the “unlawful” prong of the statute 25 || prohibits “anything that can properly be called a business practice and that at the same time is 26 || forbidden by law.” Jbid. a CASE NO.: 5:16-CV-06370-EJD 28 |} ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 “(I|[n a case where legal claims are tried by a jury and equitable claims are tried by a judge, 2 || and the claims are “based on the same facts,’ in deciding the equitable claims ‘the Seventh 3 || Amendment requires the trial judge to follow the jury’s implicit or explicit factual 4 || determinations.” Los Angeles Police Protective League v. Gates, 995 F.2d 1469, 1473 (9th Cir. 5 1993) (quoting Miller v. Fairchild Indus., 885 F.2d 498, 507 (9th Cir. 1989), cert. denied, 494 6 || U.S. 1056 (1990)). The jury in this case concluded that Defendant violated the Sherman Act 7 Sections | and 2 as well as the Clayton Act Section 7. The jury’s findings as to Defendant’s 8 || violations of law are sufficient to demonstrate that Defendant’s conduct was “unlawful” under the 9 || UCL. Planned Parenthood Fed’n of Am., Inc. v. Ctr. for Med. Progress, 214 F. Supp. 3d 808, 836 10 || (ND. Cal. 2016) (“[B]ecause I conclude that plaintiffs have adequately alleged violations of other 11 federal and state laws, plaintiffs have adequately pleaded the basis for an unlawful UCL claim.”) aff'd, 890 F.3d 828 (9th Cir. 2018), amended, 897 F.3d 1224 (9th Cir. 2018), and aff'd, 735 F. 13 || App’x 241 (9th Cir. 2018). 14 Plaintiff has adequately proven its UCL claim and the Court will enter judgment in favor 3 15 of Plaintiff. The UCL empowers a court to issue injunctions for violations of the UCL. Cal. Bus. a 16 || & Prof. Code § 17203. The standard for injunctive relief under the UCL is less demanding than 5 17 || the standard under Section 16. See Haas Automation, Inc. v. Denny, No. 12-cv-4779 (CBM), S 18 || 2014 WL 2966989, at *9 (C.D. Cal. Jul. 1, 2014) (stating that under the UCL, plaintiff need only 19 || show “the elements of a cause of action involving the wrongful act sought to be enjoined and... 20 || the grounds for equitable relief, such as, inadequacy of the remedy at law.”’) (quoting City of S. 21 Pasadena v. Dep't of Transp., 29 Cal. App. 4th 1280, 1293 (1994)). The Court finds that 22 || injunctive relief is warranted under the UCL for the reasons discussed in Part A above. 23 C. The Scope of the Injunction 24 The Supreme Court instructs “that a remedies decree in an antitrust case must seek 25 || to ‘unfetter a market from anticompetitive conduct,’ to ‘terminate the illegal monopoly, deny to 26 || the defendant the fruits of its statutory violation, and ensure that there remain no practices likely to a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 result in monopolization in the future.’” United States v. Microsoft Corp., 253 F.3d 34, 103 (D.C. 2 |} Cir. 2001) (quoting Ford Motor Co. v. United States, 405 U.S. 562, 577 (1972), and United States 3 v. United Shoe Mach. Corp., 391 U.S. 244, 250 (1968)); see also United States v. U.S. Gypsum 4 Co., 340 U.S. 76, 88 (1950) (an antitrust remedy must, “so far as practicable, cure the ill effects of 5 || the illegal conduct, and assure the public freedom from its continuance”). Thus, it is “entirely 6 || appropriate” for a court to order an injunction “beyond a simple proscription against the precise 7 || conduct previously pursued.” Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 698 8 (1978). The relevant question is “whether the relief represents a reasonable method of eliminating 9 || the consequences of the illegal conduct.” /bid.; accord Fed. Trade Comm’n vy. Grant Connect, 10 |} LLC, 763 F.3d 1094, 1105 (9th Cir. 2014). 1] District courts are “clothed with large discretion to fit the decree to the special needs of the 12 || individual case.” Ford, 405 U.S. at 573 (internal quotations omitted); see also Zenith Radio 13 Corp., 395 U.S. at 131 (1969) (“Section 16 should be construed and applied . . . with the 14 || knowledge that the remedy it affords, like other equitable remedies, is flexible and capable of nice 3 15 ‘adjustment and reconciliation between the public interest and private needs as well as between a 16 || competing private claims.’”) (quoting Hecht Co. v. Bowles, 321 U.S. 321, 329-330 (1944)); 5 17 California ex rel. Lockyer, 575 F.3d at 1020 (“In determining the scope of an injunction, a district S 18 court has broad latitude, and it must balance the equities between the parties and give due regard 19 || to the public interest.”) (quoting Geertson Seed Farms v. Johanns, 570 F.3d 1130, 1136 (9th 20 |} Cir.2009)). 21 Plaintiff requests an order requiring Defendant to: 22 1. Supply Meade at non-discriminatory (i.e., most-favored-customer) terms for five 23 years; 24 2. Supply Orion at non-discriminatory terms for five years; 25 3. Refrain from communicating with Synta about the prices of telescopes and 26 accessories; a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 4. Refrain from sharing customer information with Synta, including but not limited to 2 statistics about which products Defendant’s customers are buying, how much 3 Defendant is charging for those products, and the volume of purchases from 4 Defendant; 5 5. Refrain from communicating with Synta about which products Defendant and 6 Synta will manufacture; and 7 6. Refrain from participating in any internal meetings or strategy sessions in which 8 any representative from a competitor, including David Shen or any employee of 9 Synta, is in attendance. 10 || Mot. at 10. The Court considers each request in turn. 11 Plaintiff requests that Defendant be ordered to supply both Meade and Orion at non- 12 || discriminatory terms for a period of five years. Defendant argues that the Court may not impose 13 an injunction forcing it to do business with any entity or dictate the terms of any business 14 || transaction. Opp. at 4. Defendant cites Verizon Communications Inc. v. Law Offices of Curtis V. 3 15 Trinko, LLP (“Trinko”’) in support of this argument. 540 U.S. 398 (2004). In Trinko, the a 16 Supreme Court considered whether the plaintiff had stated a claim under Section 2 of the Sherman 5 17 || Act for refusing to deal with competitors. Trinko did not address whether and to what extent a S 18 || mandatory injunction may be appropriate to remedy an actual violation of law. 19 Tn cases that did involve injunctive relief, the Supreme Court has repeatedly “upheld 20 || injunctions issued pursuant to § 16 regardless of whether they were mandatory or prohibitory in 21 character.” American Stores Co., 495 U.S. at 283-84 (1990) (affirming district court’s power to 22 || grant divestiture by requiring defendant to sell certain assets); see also Zenith Radio Corp., 395 23 || US. at 129-33 (reinstating injunction that required defendants to withdraw from patent 24 || pools); Silver v. New York Stock Exchange, 373 U.S. 341, 345, 365 (1963) (reinstating judgment 25 for defendants in suit to compel installation of wire services); Pacific Coast Agricultural Export 26 || Ass’n v. Sunkist Growers, Inc., 526 F.2d 1196, 1200-01, 1208-09 (9th Cir.1975) (affirming an a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 injunction enjoining defendant from “refusing to sell [products] to any qualified exporters” and 2 || providing a formula for determining the price of those products), cert. denied, 425 U.S. 959 3 || (1976). 4 Defendant also argues that the word “non-discriminatory” renders the relief impermissibly 5 || vague and that enforcement of such a term would require extensive oversight by the Court. Opp. 6 |} at2. As Plaintiff points out, the Ninth Circuit expressly approved an injunction using the term 7 || “non-discriminatory” in Jmage Tech. Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195 (9th Cir. 8 1997) (explaining that “requiring nondiscriminatory pricing” was necessary to end the defendant’s 9 || monopoly). Plaintiff specifies that the term “non-discriminatory” means that “Defendant should 10 || only be able to charge Meade and Orion the same price it charges to Celestron and its other 11 customers.” Reply, Dkt. No. 608, at 7. The Court finds that this explanation gives Defendant 12 || adequate notice of what the Court intends to require. Fed. R. Civ. Proc. 65(d)(1); £. & J. Gallo 13 Winery v. Gallo Cattle Co., 967 F.2d 1280, 1297 (9th Cir. 1992) (“Injunctions are not set aside 14 || under Rule 65(d) unless they are so vague that they have no reasonably specific meaning.”). 3 15 The Court concludes that requiring Defendant to supply Plaintiff and Meade at non- a 16 || discriminatory terms for a period of five years is a reasonable method of remedying the harm to 5 17 || Plaintiff caused by Defendant’s attempted monopolization and of ensuring that Defendant’s S 18 || violations of antitrust law do not recur. See Nat’! Soc’y of Prof’l Eng’rs, 435 US. at 698 (District 19 |) Courts are “empowered to fashion appropriate restraints on [a defendant’s] future activities both to 20 || avoid arecurrence of the violation and to eliminate its consequences.”); see also Bresgal v. 21 Brock, 843 F.2d 1163, 1170-71 (9th Cir. 1987) (“[A]n injunction is not necessarily made over- 22 || broad by extending benefit or protection to persons other than prevailing parties in the lawsuit— 23 even if it is not a class action—if such breadth is necessary to give prevailing parties the relief to 24 || which they are entitled.”). 25 Plaintiff next requests that Defendant be ordered to refrain from communicating with 26 || “Synta” about the prices of telescopes and accessories and about which products Defendant and a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 Synta will manufacture. Similarly, Plaintiff requests that Defendant be ordered to refrain from 2 || sharing customer information with Synta, including information about which products customers 3 || are buying at what price and in what volume. Defendant argues that each of these proposed orders 4 || would impermissibly limit lawful conversations with its customer, Celestron, and force Defendant 5 || to “completely re-alter its business operations.” Opp. at 5. For example, Defendant argues that 6 || prohibiting it from communicating with Synta about the prices of telescopes and accessories 7 || “would effectively mean Defendant can never again conduct business with Celestron.” Opp. at 6. 8 Defendant’s argument hinges on the fact that Plaintiff's proposed order would prevent 9 || Defendant from communicating with Celestron. The Court agrees with Defendant that prohibiting 10 || communications between Defendant and its primary customer, Celestron, would burden lawful 11 conduct unrelated to the underlying offense. See E. & J. Gallo Winery, 967 F.2d at 1297 (courts 2 “must insure that [an injunction] is tailored to eliminate only the specific harm alleged.”). Neither 13 || party clearly defines which of the many entities involved in this case are included when they 14 || reference “Synta.” The Court will order Defendant to refrain from communicating about the 3 15 || topics outlined below with Suzhou Synta Optical Technology Co. Ltd (“Suzhou Synta”) and Synta B 16 || Technology Corp. (“Synta Tech”) only, so as to not unduly restrain Defendant’s communications 5 17 || with Celestron. S 18 The Court also shares Defendant’s concern that the topics about which it would be 19 || prevented from communicating are overbroad. Plaintiff presented evidence at trial that Defendant 20 || engaged in improper communications with certain Synta entities regarding the price of telescopes 21 and accessories, customer information, and planned production, among other topics. 22 || Nevertheless, the Court can also imagine communications between Defendant and its competitors 23 about the price or sale of products that would be entirely lawful. For the sake of clarity, the Court 24 || will enjoin this activity only to the extent it violates, or contributes to a violation of, antitrust laws. 25 Finally, the Court finds Plaintiffs final request—that Defendant refrain from “internal 26 || meetings or strategy sessions in which any representative from a competitor .. . is in a CASE NO.: 5:16-CV-06370-EJD 28 |} ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 attendance” be overbroad. Mot. at 10. While the jury found evidence of a conspiracy 2 || between Defendant and Synta, there was no evidence to suggest that Defendant participated in any 3 conspiracy or unlawful activity with other competitors. The Court finds that Defendant should 4 || only be restrained from communicating with the competitors for which Plaintiff presented 5 evidence of conspiracy. Moreover, as Defendant points out, the relief requested is unclear as to 6 || what constitutes an “internal meeting or strategy session.” Opp. at 6. While Defendant should be 7 || prohibited from discussing internal business strategy with certain competitors, the Court finds that 8 || this result can be achieved by limiting communications instead of meetings. 9 III. Conclusion and Order 10 Based on the foregoing reasons, Plaintiff’s motion for a permanent injunction and 11 || judgment on its UCL claim is GRANTED. Pursuant to Federal Rule of Civil Procedure 65(d), IT 2 IS HEREBY ORDERED as follows: 13 1. Defendant shall supply Meade at non-discriminatory terms for five years; 14 2. Defendant shall supply Orion at non-discriminatory terms for five years; 3 15 3. Defendant shall refrain from communicating with Suzhou Synta and Synta Tech, A 16 about the following, to the extent such communication violates, or contributes to 5 17 the violation of, antitrust laws: S 18 a. the prices of telescopes and accessories; 19 b. customer information, including but not limited to statistics about which 20 products Defendant’s customers are buying, how much Defendant is 21 charging for those products, and the volume of purchases from Defendant; 22 c. which products Defendant or Synta will manufacture; and 23 d. Defendant’s or Synta’s internal business strategy. 24 This Court shall retain jurisdiction over any and all issues arising from or related to the 25 enforcement of this permanent injunction, the implementation of this Order or the interpretation of 26 || this Order. a CASE NO.: 5:16-CV-06370-EJD 28 || ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM

1 Because this Order represents a final resolution of all the claims against Defendant Ningbo 2 Sunny, the Court will enter Final Judgment. The parties are ordered to submit joint status reports 3 every six months regarding the progress of the related bankruptcy proceedings against defendants 4 Sunny Optics and Meade. 5 IT IS SO ORDERED. 6 || Dated: April 9, 2020 7 EDWARD J. DAVILA 8 United States District Judge 9 10 11

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2 18 19 20 21 22 23 24 25 26 27 CASE NO.: 5:16-CV-06370-EJD 28 |} ORDER GRANTING PLAINTIFF’S MOTION FOR EQUITABLE RELIEF AND JUDGMENT ON UCL CLAIM