Amnesty Applicant Not Ordered to Identify Itself, Assist in Private Antitrust Suit

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The federal district court in San Francisco will not require a company that was granted conditional leniency under the Department of Justice Antitrust Division corporate leniency program to identify itself to, and cooperate with, plaintiffs in a private antitrust action, alleging a conspiracy to fix prices in the thin film transistor-liquid crystal display (TFT-LCD) industry.

The plaintiffs—direct purchasers of TFTLCD panels—sought a motion to compel the amnesty applicant to comply with the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (ACPERA) or forfeit any rights under the Act.

The ACPERA (CCH Trade Regulation Reporter ¶27,750) limits the liability in a private antitrust action of a successful amnesty applicant that has cooperated with the government’s investigation and prosecution of the underlying conspiracy. The amnesty applicant’s liability might be limited to actual damages, instead of the usual treble damages.

Grant of Conditional Leniency

The Justice Department confirmed that it granted conditional leniency to an applicant, and that the applicant satisfied its obligations under the leniency agreement to fully cooperate with the government in its investigation into the TFT-LCD price fixing conspiracy.

Several corporations and individuals were successfully prosecuted for their roles in the conspiracy. The Justice Department, however, argued that the ACPERA did not authorize the court to grant the plaintiffs’ requested relief.

The court sided with the Justice Department and Samsung, the company identified by the plaintiffs as the amnesty applicant. While the court agreed that an amnesty applicant’s cooperation was most valuable early in the litigation, it concluded that the language of ACPERA suggested that the court’s assessment of an amnesty applicant’s cooperation occurred at the time of imposing judgment or otherwise determining liability and damages. Therefore, the amnesty applicant’s conduct would not be considered until the amnesty applicant sought to limit liability under ACPERA later in the suit.

Sunsetting of Provisions

The decision is probably the first to consider a federal district court’s authority under the ACPERA to compel an amnesty applicant to cooperate with private antitrust plaintiffs. It comes as the provisions in the 2004 law that provide amnesty applicants with an opportunity to avoid treble damages are about to sunset. According to the law, the provisions cease to have effect 5 years after the date of enactment. The law was enacted on June 22, 2004.

The American Bar Association Section of Antitrust Law has called on leaders in the House and Senate Judiciary Committees to extend these provisions. It has also suggested that Congress evaluate the efficacy of the detrebling provisions.

The May 19 decision is In re TFT-LCD (Flat Panel) Antitrust Litigation, 2009-1 Trade Cases ¶76,626.