District Court Construes FTAIA to Permit Claims By an Indirect U.S. Purchaser Where the "Intent" of the Conspirators Was To Raise Prices of Component and Finished Products Alike in the U.S.

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

In re: TFT-LCD (Flat Panel) Antitrust Litigation, U.S. District Court for the Northern District of California, September 18, 2014

The issue considered in this long-running antitrust litigation was whether a U.S. reseller of wireless mobile handsets could maintain an action against two phone manufacturers from which it purchased its stock.  Those manufacturers, in turn, had built the telephones with flat screens that they bought outside the U.S., and that were the subject of a price-fixing conspiracy.  They sought to dismiss claims brought under a state consumer protection law.  They argued that the FTAIA was applicable to the state law claim, and that the FTAIA barred the claims because the injury (paying for the price-fixed screens) occurred outside the U.S.

The District Court in San Francisco did not address the unresolved question whether the FTAIA applied to state claims, concluding that its principles would apply to the state claim regardless.  The Court then reviewed a prior appellate decision in the case that had upheld a federal antitrust claim on similar facts.  The Court stated that it was not material that the screens had arrived in the U.S. only indirectly because the "intent" of the conspirators was to raise prices in the U.S., in part through such indirect sales.

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