Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: CRT manufacturers in price-fixing action not compelled to produce a confidential European Commission investigation decision, (Mar 28, 2014)

By Linda O’Brien, J.D., LL.M.

In an action by direct action plaintiffs against cathode ray tube manufacturers for an alleged international price fixing conspiracy, the CRT manufacturers were not compelled to produce, pursuant to a discovery request, a confidential European Commission decision relating to an EC investigation into the alleged price-fixing conspiracy, the federal district court in San Francisco has decided (In re Cathode Ray Tube (CRT) Antitrust Litigation, March 26, 2014, Conti, S.).

Electronic products manufacturers and other direct action plaintiffs (DAPs), elected to opt out of multidistrict class action litigation against cathode ray tube (CRT) manufacturers for an alleged international price fixing conspiracy. The DAPs sought to compel production of a confidential European Commission (EC) decision regarding its investigation of the alleged price-fixing conspiracy. Contending that European Union (EU) law and EC policy prohibited the disclosure of the document, the defendant CRT manufacturers refused to comply with the discovery request. A public version of the EC decision was not published; however, a summary of the decision confirmed that the EC investigation found that the defendant manufacturers participated in price-fixing cartels for CRTs and were fined more than €1.47 billion.

The court found that comity outweighed the need for production of the EC decision. Comity is the recognition one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having regard both to international duty and convenience, and to the rights of its own citizens. Although the EC decision was relevant to the case regarding the international character of the alleged CRT conspiracy, it was undisputed that the decision originated from the EU and not the United States, the court noted.

EU law prohibits the EC from disclosing information acquired or exchanged under the EU’s competition laws. The law also potentially subjects parties who disclose such confidential information to official sanctions. In terms of EC policy, the defendants produced evidence that the Commission objected to the disclosure of the decision on the basis that, although its investigation was over, its leniency program was a cornerstone of its cartel detection and enforcement whose optimal functioning required confidentiality. In this case, under EU law and EC policy, disclosure of the decision would violate foreign law, hinder EC investigations of antitrust cases, and subject the defendants to sanctions. The EC also relies on cooperation from United States law enforcement agencies and that cooperation is an aspect of comity, the court noted.

Additionally, the defendants contended that the decision will be available as soon as the public version is prepared. Since discovery did not close for six months, its publication during that time was likely. The court concluded that a speedy development of a public version of the decision before the close of discovery was an important factor in its determination.

The case is No. C-07-5944-SC.

Attorneys: Bruce Lee Simon (Pearson Simon & Warshaw, LLP) for Crago, Inc. Bryan L. Clobes (Cafferty Clobes Meriwether & Sprengel LLP) for Princeton Display Technologies, Inc. Joel Steven Sanders (Gibson, Dunn & Crutcher LLP) for Chunghwa Picture Tubes, Ltd. Douglas Wald (Arnold & Porter LLP) for LG Electronics, Inc.. Christopher M. Curran (Ford & Harrison LLP) for Samsung SDI Co., Ltd., Toshiba Corp. and Philips Electronics North America Corp. Bernadette Shawan Gillians (Buist Moore Smythe and McGee) for Toshiba America Electronics Components, Inc. A. Paul Victor (Winston & Strawn LLP) for MT Picture Display Co., Ltd. David L. Yohai (Weil, Gotshal & Manges LLP) for Panasonic Corp.

Companies: Crago, Inc; Princeton Display Technologies, Inc.; Chunghwa Picture Tubes, Ltd.; LG Electronics, Inc.; Samsung SDI Co., Ltd.; Toshiba Corp.; Philips Electronics North America Corp.; Toshiba America Electronics Components, Inc.; MT Picture Display Co., Ltd.; Panasonic Corp.

Cases: Antitrust CaliforniaNews