Antitrust Law Daily Wrap Up, ANTITRUST—NDCal: Class Counsel in CRT Price Fixing Action Not Compelled to Provide Documents to Third Party, (Jan 22, 2013)

By Jeffrey May, J.D.

Saveri & Saveri, Inc., class counsel for direct purchaser plaintiffs in a price fixing action against cathode ray tube (CRT) manufacturers and suppliers, was not required to turn over documents produced by the defendants to electronics products manufacturer Sharp Corporation, the federal district in San Francisco has decided (In re: Cathode Ray Tube (CRT) Antitrust Litigation, January 17, 2013, Conti, S.).

Sharp, which was pursuing a similar antitrust case in South Korea involving only Korean CRT manufacturers and suppliers, and only CRT sales taking place outside the United States, requested a subpoena from the federal district court to obtain documents from the law firm under 28 U.S.C. § 1782. The statute permits district courts to order production of documents or other materials to foreign tribunals. Sharp believed that information relevant to its Korean litigation could be found in the requested materials. However, Sharp failed to show that its request was warranted.

The law firm objected to Sharp's subpoena and, along with the defendants, moved to quash it. Sharp moved to compel compliance, and a Special Master heard the arguments. The Special Master recommended that the motion to quash be granted and that Sharp's motion to compel be denied. Rejecting Sharp's assertions that the Special Master abused his discretion, the district court adopted the Special Master's Report and Recommendation.

There are four factors to be considered when deciding whether to grant § 1782 applications: (1) whether the person from whom discovery is sought is a participant in the foreign proceeding; (2) the nature of the foreign tribunal, the character of the foreign proceedings, and the receptivity of the foreign government to receiving United States federal-court judicial assistance; (3) whether the § 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of that country or the United States; and (4) whether the requests are unduly intrusive or burdensome.

The Special Master did not err in finding that the first factor weighed against § 1782 assistance. The Special Master found that, despite the law firm’s non-party status, Sharp was actually seeking information about the defendants, some of whom were subject to Korean discovery rules as parties to the Korean litigation. The Special Master further found that Sharp had not availed itself of the discovery options available to it in Korea.

With respect to the second factor, the Special Master correctly concluded that the Korean court's receptivity did not warrant § 1782 assistance. Sharp argued that the Special Master improperly imposed a foreign-discoverability rule when considering this factor. However, the Special Master rejected the request because he found that Sharp had not shown that its request was warranted, and because other relevant factors like comity and parity weighed against it.

The court also rejected Sharp's suggestion that the Special Master applied a foreign-discoverability rule in considering the third factor. The Special Master found that Sharp had side-stepped less-than-favorable discovery rules by resorting immediately to § 1782, when Korean discovery was available.

As for the burdensomeness of the § 1782 request, Sharp unsuccessfully argued that the Special Master erred in deciding to reject Sharp's discovery request instead of simply trimming it. Also rejected was Sharp’s assertion that the Special Mater erred in concluding that the burden on the law firm to gather and compile the electronic discovery record would be unacceptable.

Attorneys: Richard Alexander Saveri (Saveri & Saveri, Inc.) for plaintiffs. Colin C. West (Bingham McCutchen LLP) for petitioner Sharp Corp.

Companies: Sharp Corp.

Cases: Antitrust CaliforniaNews