As reported in the April 2014 of Orrick's Antitrust and Competition Newsletter, on March 27, 2014, the 7th U.S. Circuit Court of Appeals affirmed a district court decision that Motorola's price-fixing claims based on purchases that its non-U.S. affiliates made from non-U.S. defendants were barred under the Foreign Trade Antitrust Improvement Act (FTAIA). Motorola Mobility LLC v. AU Optronics Corp. et al., 746 F.3d 842 (7th Cir. 2014). The 7th Circuit issued its decision based solely on the petition for review and without full briefing on the merits or a hearing.
That denial, which surprised many, has since turned into an unusual series of orders from the 7th Circuit, which might be attributed to the complexity and difficulty of analyzing and applying the FTAIA in light of international comity concerns. On April 24, 2014, Motorola submitted a petition for rehearing en banc, which was supported by a joint brief filed by the U.S. Department of Justice and the U.S. Federal Trade Commission, a brief filed by several economists, and a brief filed by the American Antitrust Institute. On May 1, 2014, the 7th Circuit issued a short order inviting the U.S. Departments of Commerce and State to file briefs as amici curiae. On May 20, the U.S. Solicitor General informed the court that the United States had explained its position in the DOJ/FTC's brief, and suggested that the conduct Motorola alleged was "substantially the same unlawful conduct as gave rise to" criminal prosecutions by the United States.
This did not satisfy the 7th Circuit. Two days later that court issued a terse statement ordering the Solicitor General to explain which government officials had been consulted, the nature of the consultation, and the meaning of the Solicitor General's comment that the DOJ/FTC's brief "reflects the views of the United States." But the next day, upon further reflection, the 7th Circuit rescinded the Order. On June 2, the court issued a more complete statement, requesting that the Solicitor General submit a brief to address the international comity issues addressed in the district court's opinion. The court noted that three foreign antitrust enforcement agencies have submitted amicus briefs or letters opposing en banc review: Korea's Fair Trade Commission; Japan's Ministry of Economy, Trade and Industry; and Taiwan's Ministry of Economic Affairs. Although 7th Circuit was clear that it was simply requesting a brief, it emphasized that doing so "will be helpful not only to the court, but also the credibility of the amicus curiae brief filed with [the Solicitor General's] approval by the FTC and the antitrust division."
Motorola's appeal to the 7th Circuit is a leading case regarding the scope and applicability of the FTAIA, as demonstrated by the three amicus briefs by foreign governments, the DOJ/FTC brief, and the court's shifting requests that the United States provide yet further input in light of international comity concerns. The briefing and the 7th Circuit's actions are being watched with great interest and are critical for anyone handling cases in which the FTAIA is an issue.
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