Antitrust Law Daily Wrap Up, ANTITRUST—Wash. Ct. App.: Washington can maintain price fixing suit against LG Display in state court, (May 8, 2014)

By Jeffrey May, J.D.

A Washington court may properly exercise personal jurisdiction over Korean company LG Display Co. Ltd. and its California-based subsidiary LG Display America Inc. in a price fixing action brought by the state, a state appellate court has ruled. Because Washington's exercise of jurisdiction over LG Display met constitutional requirements, a trial court's dismissal of the state's action was reversed. In addition, an award of attorney fees to LG Display was reversed, and the case was remanded for further proceedings (Washington v. AU Optronics Corp., May 5, 2014, Leach, J.).

The State of Washington is one of about 20 states suing manufacturers of liquid crystal display (LCD) panels, including LG Display, for participating in a worldwide conspiracy to fix the prices of LCDs. The state is seeking to recover for harms to Washington consumers who were allegedly forced to pay higher prices for LCD products as a result of the price fixing. LCD panels are used in computer monitors and notebooks, televisions, mobile phones, and other electronic devices.

In its complaint, the state claimed specific jurisdiction existed over LG Display, which has no offices or employees in the state, under the long-arm provision of the Consumer Protection Act. In addition, it alleged that venue was proper in Washington's King County—where the suit was filed—because, among other things, “a significant portion of the acts giving rise to this action occurred in King County; the Defendants and their co- conspirators [sic] activities were intended to, and did have a substantial and foreseeable effect on U.S. and Washington State trade or commerce; the conspiracy affected the prices of LCD panels and LCD products purchased in Washington; and all Defendants knew or expected that products containing their LCD panels would be sold in the U.S. and into Washington.” During the course of the price fixing conspiracy, LG Display purportedly “knew or expected that products containing their LCD panels would be sold in the U.S. and into Washington.”

“LG Display's alleged conduct plus a large volume of expected and actual sales established sufficient minimum contacts for a Washington court to exercise specific jurisdiction over it,” the court concluded. “[T]he pattern of sales of products containing LG Display's LCD panels establishes a relationship between LG Display, Washington, and this litigation, such that it is fair, in light of LG Display's contacts with Washington, to subject LG Display to suit here.”

As was required to satisfy due process, the state showed that the cause of action arose from LG Display's indirect sales to Washington consumers. Although LG Display argued that consumers purchased LCD products from independent third parties, the company's admitted price manipulation allegedly inflated the price paid for those purchases, in the court's view.

Moreover, LG Display failed to show that the exercise of personal jurisdiction would be unreasonable. “LG Display allegedly solicited Washington business and derived substantial profits indirectly from Washington consumers as a result of its illegal actions, and no alternative forum exists for Washington consumers,” the court noted. It was also pointed out that LG Display representatives traveled to Washington numerous times for business meetings and to perform market research. “[R]equiring LG Display to appear and defend in Washington does not offend traditional notions of fair play and substantial justice,” the court concluded.

Attorney fees. An award of attorney fees to LG Display was reversed because LG Display was no longer a prevailing party. The appellate court did not elaborate further.

The case is No. 69318-2-1.

Attorneys: Jonathan A. Mark for State of Washington. Michael K. Vaska (Foster Pepper PLLC) for respondents.

Companies: LG Display Co. Ltd.; LG Display America Inc.

Cases: Antitrust WashingtonNews