Motorola Mobility’s Petition for En Banc Review

This news is a bit dated, but on December 17, 2014 Motorola Mobility petitioned the Seventh Circuit for an en banc hearing of its price-fixing damages case against AU Optronics and other liquid-crystal-display panel makers. On November 26, 2014 a three-judge panel affirmed, on different grounds, its vacated opinion dismissing Motorola Mobility’s suit. In an opinion written by Judge Posner, the panel held that purchases by made overseas by Motorola’s foreign subsidiaries of panels that were incorporated into products subsequently shipped into the United States did not meet the second prong of the FTAIA requirements, that the effect of anticompetitive conduct give rise to an antitrust cause of action. 15 U.S.C. Section 6(a)(2). “Whether or not Motorola was harmed indirectly, the immediate victims of the price-fixing were its foreign subsidiaries.” Motorola Mobility LLC v. AU Optronics Corp., 2014 WL 6678622 (7th Cir. 2014). In its petition for rehearing en banc, Motorola claims:

“This case presents the following two questions of exceptional importance:

A. Is a cartel that fixes the price of component parts to be included in U.S.-bound products immune from all civil damages claims under U.S. antitrust law so long as it first delivers those component parts abroad?

B. Was the panel’s decision to consider this case without a random assignment consistent with the Federal and Local Rules of Appellate Procedure and this Court’s Operating Procedures?”

Supporting Amicus Briefs

Two amicus briefs were filed in support of Motorola Mobility’s request. First, certain legal and economic academics filed a brief essentially arguing that international cartels are already under deterred with inadequate fines and civil penalties and the Seventh Circuit’s opinion will only increase the incentive to cartelize by providing a loophole for foreign cartelists to escape damages. In the brief the professors write: ‘”The panel’s decision asks, ‘are we to presume the inadequacy of the antitrust laws of our foreign allies?’ No presumption is necessary: antitrust penalties toward international cartels are collectively inadequate to deter international cartels.”‘

The American Antitrust Institute also filed an amicus brief in support of Motorola Mobility’s petition. The AIA writes: “Indeed, any international price-fixing cartel that concededly has a direct, substantial and reasonably foreseeable effect on American consumers would be able to avoid Sherman Act damages for products intended for the U.S. market as long as the cartel sells its price-fixed products abroad before the products are imported into the United States.” The brief argues that, if left to stand, the decision would “seriously undermine already inadequate levels of deterrence of international cartels that harm American consumers.”

No Word Yet

There has been no reaction yet from the Seventh Circuit on Motorola Mobility’s petition, but if the petition is denied, it seems certain that Motorola Mobility will seek Supreme Court review.
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