Idaho high court rejects Micron price-fixing claim

July 16, 2009 By REBECCA BOONE , Associated Press Writer

(AP) -- The Idaho Supreme Court has refused to revive a lawsuit brought by a shareholder who claimed Micron Technology's top officials were taking part in a price-fixing scheme.

In its unanimous ruling handed down Thursday, the high court agreed with 4th District Judge Darla Williamson and said the shareholder, Scott Orrock, failed to first demand to Micron's board members fix the problem, which is required for a derivative lawsuit.

Barry Kaplan, the attorney who represents the board of the Boise-based major producer of computer chips, could not be immediately reached for comment Thursday. Neither could Marc Umeda, the attorney who represented Orrock in the case.

A derivative lawsuit allows shareholders to sue executives or board members over claims that their actions harmed the company as a whole. Orrock's lawsuit alleged that Micron President, Chairman and CEO Steven Appleton and several members of the board participated in a price-fixing scheme starting in 2000. He also claimed that the board failed to correct the behavior or hold anyone responsible for years.

During oral arguments last month, Kaplan argued that Orrock failed to show the board did not act in good faith. Kaplan also said the board fully cooperated with a U.S. Justice Department investigation into price-fixing allegations.

The Justice Department was investigating whether chip companies conspired to manipulate the number of DRAM chips released to market to inflate prices. Micron was granted immunity by the department, and the investigation resulted in fines of more than $730 million and guilty pleas from four companies - Co., Elpida Memory Inc., Infineon Technologies AG and Inc.

Orrock's attorney, Marc Umeda, told the Supreme Court that Orrock should be exempt from the rule requiring that a demand first be made to the board because he knew such a demand would be futile. Orrock maintained that the board members knew or should have known that the price-fixing was occurring and that they chose not to investigate or try to stop it.

The high court sided with the board.

"Accepting all the facts alleged as true, Orrock insufficiently pled that demand on a majority of the Board at Micron would be futile," Justice Warren Jones wrote for the court. "There are insufficient facts which tend to show that a majority of other board members had knowledge of any DRAM price-fixing among DRAM manufacturers as reported in the news sources, that any of the board members consciously disregarded any of the 'red flags,' or that the board members failed to investigate or take remedial action."

Besides Appleton, six current and former board members were named in the lawsuit: James Bagley, Robert Lothrop, Gordon C. Smith, William P. Weber, Thomas T. Nicholson and Don J. Simplot. Wilber Stover Jr., Micron's former chief financial officer, and Michael Sadler, former vice president of worldwide sales, also were named as defendants.

Sadler is now the executive vice president of Inotera Memories Inc., a joint venture of Micron and Nanya Technology Corp. of Taiwan.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Samsung admits chip price-fixing

Related Stories

Samsung admits chip price-fixing

October 14, 2005

Samsung has agreed to pay a huge fine after admitting in federal court that it was part of a conspiracy to fix the price of semiconductor chips.

Legal fears halt intelligent design move

January 23, 2006

A local school board member in Pennsylvania who is an intelligent design advocate says this is not the right time to introduce ID into classrooms.

Is a friendly board a better board?

August 24, 2006

Research by UQ Business School's Professor Renée Adams suggests that increasing the independence of boards may not be so good for shareholders. Professor Adams and co-author Daniel Ferreira found that boards emphasising ...

Debate on ethics of tobacco funding

July 19, 2007

University of California officials said they will discuss in September whether it will accept additional research funding from the tobacco industry.

Recommended for you

Team creates functional ultrathin solar cells

August 27, 2015

(Phys.org)—A team of researchers with Johannes Kepler University Linz in Austria has developed an ultrathin solar cell for use in lightweight and flexible applications. In their paper published in the journal Nature Materials, ...

Magnetic fields provide a new way to communicate wirelessly

September 1, 2015

Electrical engineers at the University of California, San Diego demonstrated a new wireless communication technique that works by sending magnetic signals through the human body. The new technology could offer a lower power ...

Smart home heating and cooling

August 28, 2015

Smart temperature-control devices—such as thermostats that learn and adjust to pre-programmed temperatures—are poised to increase comfort and save energy in homes.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.