Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Wis.: Taiwanese sheet metal manufacturer’s motion to recuse federal judge rejected, (Dec 18, 2015)

By Greg Hammond, J.D.

The federal district court in Milwaukee rejected a Taiwanese aftermarket sheet metal manufacturer’s motion to recuse the district court judge, which was based on the disclosure of privileged information about its settlement position and valuation of the case by the manufacturer’s former law firm. In denying the motion, the court determined that—even if the manufacturer’s law firm disclosed privileged information and even if that rendered the information extrajudicial—no reasonable, well-informed observer would perceive a significant risk of impartiality given the facts and circumstances of the case (Fond Du Lac Bumper Exchange, Inc. v. Jui Li Enterprise Co., Ltd., December 16, 2015, Adelman, L.).

Purchasers of aftermarket sheet metal products filed suit against manufacturer Jui Li Enterprise Co., Ltd., alleging the company fixed the prices of aftermarket sheet metal products and engaged in other anticompetitive conduct causing the prices of products sold in the United States to increase significantly. Five months after the court granted Latham & Watkins’ motion to withdraw as Jui Li’s counsel, Jui Li moved to recuse the judge.

Source of information. The court first determined that the source of the information to which Jui Li objects was not extrajudicial. In particular, the court reasoned that it was proper to inquire about Jui Li’s disagreements with Latham, including its disagreements regarding the value of the case and settlement because Latham had explained that the irreconcilable differences that it referenced in its motion to withdraw involved those issues. Unless those matters were brought up, the court had no way of knowing whether irreconcilable differences actually existed. The court also rejected Jui Li’s arguments that Latham improperly disclosed privileged information during conferences because there was no authority for the proposition that an attorney’s disclosure of privileged information during a proper judicial proceeding rendered the proceeding extrajudicial.

Reasonable observer. The court next found that no reasonable, well-informed observer would conclude that the court’s opinion of Jui Li was influenced by Latham’s allegedly improper statements. Rather, the court noted that it made clear it did not care about Jui Li’s settlement position or valuation of the case, but was concerned about the efforts Jui Li was making to retain a new lawyer and how long it might take for Jui Li to do so. Jui Li’s representatives’ statements suggested that they failed to grasp the seriousness of the case or the importance of finding a new attorney, according to the court. Therefore, it concluded that a reasonable observer with this knowledge would conclude that the court’s concern about Jui Li’s participation in the case was not based on Latham’s statements that Jui Li claims were improper and therefore extrajudicial.

Lastly, the court found that the allegedly improper information that Latham disclosed—Jui Li’s settlement strategy and valuation of the case—did not go to the merits of the case, which involved liability under federal and state antitrust laws. Consequently, the court concluded that a reasonable, well-informed observer would not regard the court’s receipt of this information as affecting its ability to fairly judge the merits of the case.

The case is No. 09-cv-0852.

Attorneys: Andrew M. Purdy (Joseph Saveri Law Firm) and Christopher M. Burke (Scott + Scott LLP) for Fond Du Lac Bumper Exchange Inc. Christopher M. Burke (Scott + Scott LLP) for Roberts Wholesale Body Parts Inc. Alfredo A. Bismonte (Beck Bismonte & Finley LLP) for Jui Li Enterprise Co Ltd. Cindy D. Hinkle (Buchanan Ingersoll & Rooney PC) for Auto Parts Industrial Ltd.

Companies: Fond Du Lac Bumper Exchange Inc.; Roberts Wholesale Body Parts Inc.; Jui Li Enterprise Co Ltd.; Tong Yang Industry Co. Ltd.; Taiwan Kai Yih Industrial Co. Ltd.; Auto Parts Industrial Ltd.

Cases: Antitrust WisconsinNews