Posted by : Matthew Wild | On : September 18, 2008

The Ninth Circuit affirmed dismissal of foreigner purchasers’ Section 1 claims against DRAM manufacturers for price-fixing.  In re Dynamic Random Access Memory (DRAM) Antitrust Litig., No. 06-15636, 2008 WL 3522419 (9th Cir. Aug. 14, 2008).  The plaintiffs alleged that they purchased DRAM abroad at supra-competitive prices due to defendants’ price fixing activities.  The only link between the effect on U.S. commerce and plaintiffs’ injuries was that in order for the cartel to be successful, defendants had to fix prices in the U.S. and abroad.  Constitent with the many courts that have visited this issue since the Supreme Court’s decision in F. Hoffman-La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004), the Ninth Circuit held that such allegations were insufficient to bring plaintiffs’ claims within the “domestic injury” exception to the Foreign Trade Antitrust Improvement Act.  That statute excludes “conduct that causes only foreign injury” from the reach of the U.S. antitrust laws.  Id. at 158.  Judge Noonan’s concurring opinion is particularly interesting as he has explains that the decision is nothing more than a policy choice by “Congress and the Supreme Court that the economic interests of consumers outside the United States are normally not something American law is intended to protect.”  As Judge Noonan observes, “[w]e reach this vanishing point not from guidance in words like ‘proximate’ or ‘direct’ but from a strong sense that the protection of consumers in another country is normally the business of that country.  Location, not logic, keeps [plaintiff’s] claim out of court.”



Posted by : Matthew Wild | On : March 15, 2008

In March 2008, the Antitrust division (Criminal Section) lost two price-fixing cases. On March 7, 2008, after an 11-day trial, Judge Phyllis Hamilton of the United States District Court for the Northern District of California declared a mistrial in United States v. Swanson because of a hung jury (which voted 10-2 for acquittal). The Antitrust Division has decided not to re-try Swanson. Charles Swanson, a former U.S. executive of Hynix Semiconductor, was the only defendant to go to trial in the cartel prosecutions of DRAM manufacturers. Four corporations (Samsung, Hynix, Infineon and Elpida Memory) and 16 individuals pleaded guilty. Fines exceeded $730 million and individual prison sentences ranged from 3 to 10 months. John Barthko of Barthko Zankel Tarrant & Miller represented Swanson. On March 12, 2008, the U.K. House of Lords declined to extradite Ian Norris, the former CEO of Morgan Crucible who the Antitrust Division (Criminal Section) had indicted for price-fixing in connection with electrical carbon cartel. Price-fixing was not a crime in the U.K. at the time that Norris was indicted and, therefore, Norris was not subject to extradition for the offense. To avoid that obstacle, the Antitrust Division also charged Norris with obstruction of justice and sought his extradition on that charge. Norris is subject to further proceedings and potential extradition on the obstruction charge. He was represented by Lawrence Byrne (Linklaters LLP) in the United States and Alistair Graham (White & Case LLP) in the U.K. This is the fourth recent blow to the Antitrust Division’s Criminal Section. On November 30, 2007, the United States District Court for the District of Delaware dismissed a price-fixing indictment against Stolt-Nielsen holding that the Antitrust Division breached its amnesty agreement. See United States v. Stolt-Nielsen S.A., 524 F. Supp. 2d 609 (E.D. Penn 2007). Solt was represented by Mark Gidley and Chris Curran (White & Case LLP). On July 19, 2007, Stora Enso North America was acquitted of price-fixing in the United States District Court for the District of Connecticut. The jury returned its verdict in less than two hours.