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The governments of South Korea and the United States are clashing over whether an appeals court should resurrect Motorola Mobility Inc.’s price-fixing case against the world’s liquid crystal display (LCD) manufacturers.

The Korea Fair Trade Commission urged the U.S. Court of Appeals for the Seventh Circuit last week not to reconsider a March 27 panel decision that handed victory to eight LCD makers, including South Korea-based Samsung Electronics Co. The KFTC’s May 23 amicus brief puts the South Korean agency at odds with the U.S. Department of Justice, which is supporting Illinois-based Motorola in its bid to have all of the judges on the Seventh Circuit rehear the case.

Reinforcing an argument Samsung and its codefendants have made all along, KFTC argues that reviving Motorola’s case is bad policy. “Plaintiff seeks to apply the U.S. antitrust laws to transactions between non-U.S. companies that took place outside the U.S. and had no direct effect on U.S. commerce,” wrote KFTC’s outside lawyers at the Chicago boutique Katten & Temple. “Application of the U.S. antitrust laws to such transactions, if adopted by this court, is likely to create conflicts with the sovereignty of other countries, including Korea, and will interfere with their antitrust enforcement.”

Regulators around the world began investigating an alleged cartel between Asian LCD makers in 2007, and a raft of class action lawsuits were ultimately consolidated before U.S. District Judge Susan Illston in San Francisco. Motorola, which buys LCDs for use in cellphones, opted out of the class action litigation in order to bring its own suit. The defendants include Samsung, Sharp Corp. and Toshiba Corp., with potential damages once pegged at more than $3 billion.

Motorola’s lawyers at Crowell & Moring had the early advantage, winning a ruling from Illston that the alleged price-fixing conspiracy had a “direct effect” on U.S. commerce and that the case could therefore be heard in the U.S. But the tide turned in the months that followed, after Illston sent the case back to federal court in Chicago for an eventual trial.

Based on a last-ditch motion for reconsideration filed by Samsung’s lawyers at Covington & Burling, U.S. District Judge Joan Gottschall ruled that she doesn’t have jurisdiction over the vast majority of Motorola’s claims. As we explained, that ruling effectively ended the case because the limited damages Motorola could seek would be offset by an earlier $150 million settlement with Seiko Epson Corp.

The Seventh Circuit affirmed Gottschall in March. Judge Richard Posner wrote that Motorola’s approach “would enormously increase the global reach of the Sherman Act, creating friction with many foreign countries.”

In an April 24 brief, attorneys at the Justice Department and the Federal Trade Commission urged the Seventh Circuit to rehear the case en banc. They argued that the court’s narrow view of the Sherman Act’s reach could undermine the ability of U.S. regulators to bring foreign cartel cases.

The Seventh Circuit issued an order on May 22 requiring Solicitor General Donald Verrilli Jr., who authorized the amicus brief, to disclose all the U.S. officials his office has conferred with about the case. As The Wall Street Journal reported, the court appeared skeptical about whether the government’s brief reflected the views of the U.S. Departments of State and Commerce. The Seventh Circuit withdrew the unusual order on Friday.

South Korea isn’t the first foreign government to get involved in the case. At the district court level, Sharp lawyer Kenneth Gallo of Paul, Weiss, Rifkind, Wharton & Garrison helped arrange amicus support from the Japanese Ministry of Economy, Trade and Industry, as we reported when we named Gallo and Samsung counsel Robert Wick of Covington & Burling Litigators of the Week earlier this year.