Simpson Thacher & Bartlett LLP scored a remarkable victory for HannStar Display Corp. in the long-running TFT-LCD antitrust litigation involving alleged price-fixing by the world’s largest liquid crystal display, or LCD, manufacturers. Just weeks before trial was set to begin, U.S. District Court Judge Joan B. Gottschall dismissed nearly $3.5 billion of claims brought by Motorola Mobility, Inc. against HannStar and other defendants.
Motorola and its foreign affiliates purchased LCD panels for mobile phones. Judge Gottschall ruled that under the Foreign Trade Antitrust Improvements Act (“FTAIA”), Motorola’s claims based on purchases by its foreign affiliates do not fall under the U.S. antitrust laws. The FTAIA disallows federal antitrust claims based on foreign commerce unless the conduct has a direct effect on U.S. domestic or import commerce.
Judge Gottschall’s ruling marked a stark departure from an earlier decision on the same motion by another court. The U.S. District Court for the Northern District of California, which in its role as the multidistrict litigation court handles pretrial proceedings in the wide-ranging litigation, had ruled that Motorola presented admissible evidence of U.S. ties to meet the “domestic effect” standard.
Once the case was sent back to the U.S. District Court for the Northern District of Illinois for trial, defendants moved to reconsider the California ruling. Judge Gottschall granted the motion, noting that because “the economic consequences of Motorola’s domestic approval of LCD prices were not felt in the U.S. economy, the domestic approval cannot constitute a domestic effect that gives rise to a Sherman Act claim.”
Following the ruling, the trial slated for March 2014 was postponed indefinitely. On February 13, Judge Gottschall certified her January ruling for interlocutory appeal to the U.S. Court of Appeals for the Seventh Circuit. Motorola’s remaining Sherman Act Claim for a mere 1 percent of purchases was stayed pending appeal and all of its state law claims were dismissed with prejudice.
The Simpson Thacher team included Jim Kreissman, Buzz Frahn, Jason Bussey, Elizabeth Gillen, Melissa Schmidt, George Brell, Lee Brand, Caitlyn Chacon and Elizabeth White.