Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Wireless carrier’s damages claims in TFT-LCD price-fixing action can proceed, (Sep 22, 2014)

By Linda O’Brien, J.D., LL.M.

The federal district court in San Francisco has refused to dismiss a wireless carrier’s damages claims under the Florida Deceptive and Unfair Trade Practices Act in a class action against manufacturers of thin-film transistor liquid crystal display panels for conspiring to fix prices. Contrary to the manufacturers’ claims, their importation and sale of thin-film transistor liquid display panels was not protected by the Foreign Trade Antitrust Improvements Act (FTAIA), the court held (In re TFT-LCD (Flat Panel) Antitrust Litigation, September 18, 2014, Illston, S.).

Wireless telecommunications service provider TracFone purchased wireless handsets for resale to customers from electronic manufacturers Motorola and Nokia that had purchased thin-film transistor liquid crystal display panels (TFT-LCDs) from manufacturers and incorporated them into their handsets. TracFone filed suit against manufacturer AU Optronics Corporation and its subsidiary, AU Optronics Corporation America, for their role in a conspiracy to fix the prices of thin-film transistor liquid crystal display panels (TFT-LCDs) that were incorporated into LCD products sold throughout the United States. TracFone alleged that AU and other manufacturers conspired to fix, raise, and maintain the prices for LCD panels in violation of the Sherman Act and the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). AU moved for summary judgment on the grounds that the Foreign Trade Antitrust Improvements Act (FTAIA) precluded TracFone’s damages claims.

The court found that the FTAIA did not preclude TracFone’s damages claims because the defendants’ conduct constituted import trade. The FTAIA precluded the application of the Sherman Act to conduct involving trade or commerce unless certain exceptions applied. The court noted the Ninth Circuit decision, U.S. v. Hsiung, 758 F. 3rd 1074 (2014), examined the applicability of the FTAIA in the context of the current multi-district litigation. In the Hsiung case, the Ninth Circuit ruled that the FTAIA excluded import trade from its scope and that the transactions between foreign TFT-LCD producers and U.S. purchasers clearly fell within the definition of “import trade.”

The defendants’ conduct fell outside of the scope of the FTAIA because the intent of the conspiracy was to suppress competition and set prices that would impact pricing in the U.S. In rejecting the defendants’ argument that they did not import the particular panels that form the basis of TracFone’s claims, the court concluded that TracFone’s purchases did not determine whether the FTAIA applied, rather it was the defendants’ conduct that constituted import trade.

The case is No. C 10-3205 SI (MDL No. 1827).

Attorneys: David Bedford Esau (Carlton Fields Jorden Burt) for TracFone Wireless, Inc. Kevin C. McCann (Paul Hastings Janofsky & Walker LLP) for LG Display Co. Ltd., and LG Display America, Inc.

Companies: TracFone Wireless, Inc.; LG Display Co. Ltd.; LG Display America, Inc.

Cases: Antitrust StateUnfairTradePractices CaliforniaNews