District Court Calls for Briefing on Question Whether FTAIA Applies to State-Law Antitrust Claims

The World in U.S. Courts: Summer 2014 - Sherman Act/Antitrust/Foreign Trade Antitrust Improvements Act (FTAIA)

Proview Technology Inc. v. Optronics Corp., U.S. District Court for the Northern District of California, April 18, 2014

Plaintiff Proview Technology was an “indirect purchaser” of thin film transistor liquid crystal display (TFT-LCD) panels alleged to have been the subject of price-fixing by numerous defendants. Thus, Proview did not purchase the panels directly from the defendants. Rather, it purchased finished products in the U.S. from original equipment manufacturers (OEMs) outside the U.S. with which it was affiliated that did buy panels directly from the defendants. Proview brought Sherman Act claims and also claims under the Cartwright Act (California’s antitrust statute) based on its alleged overpayments.

Proview’s federal antitrust claims were dismissed because it was an “indirect purchaser” and therefore did not have standing to sue under the Sherman Act; an exception to this principle for situations where a direct and a related indirect purchaser essentially represent a single economic entity were found by the U.S. District Court in San Francisco not to have been adequately alleged.

The defendants also argued that Proview’s federal claims would be barred by the FTAIA because of a failure to allege a “direct, substantial, and reasonably foreseeable” effect on U.S. commerce, and in such case that Proview’s state law “indirect purchaser” claims would likewise have to be barred, as state antitrust jurisdiction could not exceed the scope of federal Sherman Act claims. The Proview plaintiffs responded that the FTAIA applied only to federal claims and that, in any event, its indirect purchaser claims were based on its status as a California business making purchases in California, and so the FTAIA was inapplicable by its own terms.

The Court requested briefing on the foregoing questions, declining to address at this juncture the question whether and to what extent the FTAIA would be found to preclude state antitrust claims based on facts that (it assumed for present purposes) might not support a claim under federal law.

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