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From Antitrust Law Daily, January 8, 2016

Taiwanese TFT-LCD manufacturer’s conduct was within reach of Sherman Act

By Greg Hammond, J.D.

In an action in which a Taiwanese TFT-LCD panel and/or finished products manufacturer was found liable for participating in a conspiracy to fix the prices of TFT-LCD panels, the manufacturer’s conduct was within the reach of the Sherman Act because it was found to have had a direct, substantial, and reasonably foreseeable effect on import commerce, the U.S. Court of Appeals in San Francisco has concluded. An order entered by the federal district court in San Francisco, denying the manufacturer’s post-trial motion for judgment as a matter of law, was consequently affirmed (In re TFT-LCD Flat Panel Antitrust Litigation, January 7, 2016, Per Curiam).

Following a jury trial in an action brought by Best Buy Co., Inc. against manufacturers of TFT-LCD panels for conspiring to fix prices, the district court entered a judgment in favor of Best Buy on its claims against Taiwanese TFT-LCD manufacturer HannStar Display Corp. The jury rendered its verdict on September 3, 2013. HannStar appealed the district court’s order, denying the manufacturer’s post-trial motion for judgment as a matter of law, and Best Buy cross-appealed.

Import commerce. The appellate court affirmed the lower court’s denial of HannStar’s motion for judgment as a matter of law, noting that the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA) permits the Sherman Act to reach conduct with a “direct, substantial, and reasonably foreseeable effect” on “trade or commerce which is not trade or commerce with foreign nations, or on import trade or import commerce with foreign nations.”

Specifically, the appellate court read the special verdict form, which the jury completed, to include a finding that HannStar’s foreign conduct had a direct, substantial, and reasonably foreseeable effect on import commerce. The jury found that HannStar participated in a conspiracy involving “TFT-LCD panels and/or finished products…imported into the United States,” and that this conspiracy “produced substantial intended effects in the United States.” Moreover, the jury’s findings were supported by substantial evidence, including testimony of a Best Buy executive and economic expert, and plea agreements and supporting documents from earlier criminal proceedings against HannStar and its co-conspirators.

Antitrust injury. The appeals court also rejected HannStar’s argument that the judgment should be set aside because the Best Buy entities did not present individualized evidence of antitrust injury-in-fact. The court concluded that, although the trial evidence of injury and damages did not distinguish between the parent corporation and its subsidiaries, any error attributable to the failure to apportion injury and damages was harmless. Specifically, the antitrust injury experienced by the subsidiaries was necessarily experienced by the parent, and the apportionment of injury among the Best Buy entities did not affect the amount or availability of relief, the appellate court concluded.

Best Buy cross appeal. Best Buy’s cross appeal was also unavailing. The appellate court concluded that the lower court did not (1) err in permitting HannStar to assert a pass-through defense to Best Buy’s indirect purchaser claim under Minnesota law or (2) improperly consider Best Buy’s prior settlements with HannStar’s co-conspirators in awarding attorney fees to Best Buy.

The case is No. 13-17408.

Attorneys: Roman M. Silberfeld (Robins, Kaplan, Miller & Ciresi LLP) for Best Buy Co., Inc., Best Buy Purchasing, LLC and Best Buy Enterprise Service, Inc. Belinda S. Lee (Latham & Watkins LLP) for Hannstar Display Corp.

Companies: Best Buy Co., Inc.; Best Buy Purchasing, LLC; Best Buy Enterprise Service, Inc.; HannStar Display Corp.

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