Antitrust Law Daily Wrap Up, ANTITRUST NEWS: U.S. urges appeals court to affirm AUO manager’s price fixing conviction, (Feb 14, 2014)

By Jeffrey May, J.D.

A former manager at liquid crystal display (LCD) producer AU Optronics Corporation was properly convicted of conspiring to fix prices, according to a Department of Justice brief filed on February 12 with the U.S. Court of Appeals in San Francisco. Shiu Lung (Steven) Leung is appealing his conviction for participating in a conspiracy, involving his former employer—AU Optronics Corporation (AUO)—and colleagues, to fix prices for thin-film transistor-liquid crystal display (TFT-LCD) panels (U.S. v. Leung, No. 13-10242).

Leung—“a key sales executive at AUO from its inception in 2001”—was indicted in June 2010, along with Taiwan-based AUO, its American subsidiary AU Optronics Corporation America (AUOA), and AUO executives. In March 2012, following an eight-week trial, a jury found AUO, AUOA, and AUO’s former president and former executive vice president guilty. However, the initial jury failed to reach a verdict as to Leung. On retrial in December 2012, Leung was found guilty, fined $50,000, and sentenced to 24 months of imprisonment to be followed by three years of supervised release.

Leung appealed his conviction. Leung’s brief raised the same issues that his convicted co-defendants made in an earlier, related appeal from the initial trial, the Justice Department noted. Oral argument on that related appeal was held in October 2013, and a ruling has yet to issue. Leung also raised in his appeal the issue of juror bias and misconduct at his retrial.

Saying that Leung was “at the heart of the conspiracy,” the Justice Department urged the appeals court to uphold his conviction. Leung contended that because the price fixing meetings took place abroad, the entire conspiracy was beyond the Sherman Act’s reach. The government fired back that conspirators cannot shield themselves from the application of the Sherman Act by “merely off-shoring their conspiracy meetings.”

The Foreign Trade Antitrust Improvements Act (FTAIA) provided the defendant no valid defense, the government argued. That statute excepts anticompetitive conduct from the Sherman Act’s application if that conduct involves export or wholly foreign commerce and does not involve or affect U.S. import commerce. Here, the conduct involved import commerce. Moreover, the FTAIA includes an exception for conduct involving export commerce or wholly foreign commerce if it has a “direct, substantial, and reasonably foreseeable effect” on U.S. commerce. The challenged conduct both took place in the United States and substantially harmed U.S. commerce and U.S. purchasers.

The government rejected as “meritless” the defendant’s contentions that: (1) it failed to plead and prove the FTAIA’s import commerce exclusion and effects exception; (2) the Sherman Act did not apply to a conspiracy involving foreign conduct, even if it took place in part in the United States and had effects in the United States; and (3) the defendant should have been allowed to argue to the jury that he was somehow justified in fixing prices to U.S. purchasers because the conspiracy involved some foreign conduct.

Juror misconduct. In his appeal, Leung also raised arguments based on alleged juror misconduct at his retrial. He challenged the district court’s refusal to consider a juror’s declaration that some other jurors discussed evidence, and expressed views on guilt, prior to the close of evidence at his retrial. According to the Justice Department, the district court properly disregarded the defendant’s motion introducing the affidavit. The government contended that the defendant contrived an issue of juror bias and misconduct by submitting a juror affidavit four months after he was found guilty.

His motion introducing that affidavit was untimely, and regardless, Federal Rule of Evidence 606(b) barred the district court from considering it, in the government’s view. Evidence 606(b) bars testimony of jurors “as to any matter or statement occurring during the course of the jury’s deliberations or to the effect of anything upon that or any other juror’s mind or emotions as influencing the juror to assent to or dissent from the verdict or indictment or concerning the juror’s mental processes in connection therewith.”

The appeal is No. 13-10242.

Attorneys: Adam D. Chandler for Department of Justice.

Companies: AU Optronics Corp.

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