Wednesday, February 09, 2011

U.S. Price Fixing Charges Against LCD Maker Held Adequate

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

The federal district court in San Francisco has refused to dismiss an indictment against Taiwan-based AU Optronics Corporation and nine Taiwanese individuals for participating in an alleged conspiracy to fix the prices of thin-film transistor liquid crystal display (TFT-LCD) panels.

According to the indictment, the conspiracy drove up prices of TFT-LCDs for use in notebook computers, desktop computer monitors, and televisions in the United States and elsewhere.

Rule of Reason?

The defendants argued that criminal Sherman Act violations based entirely on foreign conduct were subject to rule of reason analysis and that the government had to allege and prove that the defendants acted with the knowledge that their conduct would likely cause anticompetitive effects in the United States. As a result, the defendants argued that the government's indictment was insufficient as pleaded.

However, because price fixing was generally considered a per se violation of the antitrust laws, the indictment was not dismissed on the ground that the government failed to allege that the defendants acted with the knowledge that the challenged conduct would likely cause anticompetitive effects in the United States. When per se violations are alleged, the government need not prove a defendant’s intent to produce anticompetitive effects, the court ruled.

Bill of Particulars

The court also denied the defendants' motion for a bill of particulars. The indictment adequately advised the defendants of the charges against them, and the defendants sought extremely detailed evidence to which they were not entitled through a bill of particulars.

The indictment set forth the dates of the conspiracy and the specific time periods each of the defendants were alleged to have participated in it, a description of the type of antitrust conspiracy charged and the specific types of TFT-LCDs covered by the indictment, a description of the goals of the conspiracy, as well as a detailed description of the means and methods by which those goals were to be accomplished.

In addition, the discovery provided to the defendants obviated the need for a bill of particulars. While the discovery was voluminous, the government provided it in a fashion designed to help the defendants prepare their defense. Moreover, the individual defendants had stated to the court that they were familiar with the allegations against them.

The January 28 decision is United States v. Chen, 2011-1 Trade Cases ¶77,322.

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