U.S. District Judge James Donato, Northern District of California
U.S. District Judge James Donato, Northern District of California (Diego M. Radzinschi / The National Law Journal)

SAN FRANCISCO — A pair of district court rulings handed down Friday on the scope of U.S. antitrust law reinforce plaintiffs lawyers’ ability to sue foreign companies over claims that they fixed prices, even when the transactions at issue took place overseas.

The decisions by U.S. District Judges James Donato and Jon Tigar of the Northern District of California in separate cartel cases both affirm that foreign companies are liable under U.S. law when the goods at issue are shipped to the U.S. The judges rejected arguments that foreign companies could avoid the grip of U.S. antitrust law by billing sales to a middle man before selling the goods into U.S. commerce.

“It is sufficient that a conspiring defendant negotiated to set the price of a good that was imported into the United States, even if that good was sold by another conspirator or imported by someone else,” Tigar wrote in his ruling in a case against makers of cathode ray tubes.

Donato’s ruling in separate litigation involving capacitor manufacturers in Japan and other parts of East Asia embraced the same principle. He also rebuffed defense arguments that transactions that take place completely outside the United States—without the good in question necessarily ever reaching U.S. shores—are outside the reach of U.S. law.

But Donato left unclear what set of facts would have to be present in order to sue over those types of sales, and interpreted previous case law as leaving only a “small opening” for such claims to survive.

Both rulings focused on the scope of the Foreign Trade Antitrust Improvements Act, or FTAIA, a 1982 statute intended to limit companies’ liability for price-fixing claims that did not affect the U.S. market. Although positive developments for the plaintiffs in those cases, they are unlikely to tilt the playing field in favor of the antitrust plaintiffs bar more broadly, attorneys on both sides said.

“These two thoughtful decisions certainly add to the judicial interpretation of the FTAIA, but do not create any new claims for plaintiffs that did not already exist,” said Bruce Simon of the plaintiffs firm Pearson, Simon & Warshaw. Simon noted that both decisions relied heavily on circuit precedent, including an opinion by the U.S. Court of Appeals for the Ninth Circuit in the LCD antitrust case.

The plaintiffs in the capacitors case did not make off with a total win. Donato held open the door to claims related to the sale of goods that never reached the U.S., saying that the defense position that they could never be covered went “too far.”

But he also rejected the “global pricing” theory that the plaintiffs had advanced. Plaintiffs have argued that the defendants attempted to charge a single price for specific capacitors across the world market, and that pumping up prices in the U.S. market furthered that scheme.

“The problem with this theory is that it is analytically indistinguishable from similar theories that have already failed in court, most critically in the Ninth Circuit,” Donato wrote.The antitrust claims of foreign purchasers who were invoiced and received their capacitors abroad “are not barred as a matter of law, but they may not allege a claim on the basis of a global pricing theory,” wrote Donato, who litigated antitrust cases as a partner at Shearman & Sterling before becoming a judge in 2014.

Donato’s ruling had been highly anticipated in the capacitors litigation. The defendant companies have contended that at least 95 percent of the transactions relied on by the plaintiffs in the 2014 suit fall outside the scope of U.S. law.

The judge’s decision puts that figure in doubt. However, it also puts the ball back in plaintiffs’ court to determine just how broad a net they can cast. Joseph Saveri, an attorney representing direct purchasers of capacitors in that case, did not respond to a request for comment on Monday.

Tigar’s ruling comes at a comparatively late stage in the litigation initiated in 2007 over cathode ray tubes, a component used in older television sets. His order denied a motion to dismiss antitrust claims by a group of companies who are directly suing manufacturers as opt-out plaintiffs.

SAN FRANCISCO — A pair of district court rulings handed down Friday on the scope of U.S. antitrust law reinforce plaintiffs lawyers’ ability to sue foreign companies over claims that they fixed prices, even when the transactions at issue took place overseas.

The decisions by U.S. District Judges James Donato and Jon Tigar of the Northern District of California in separate cartel cases both affirm that foreign companies are liable under U.S. law when the goods at issue are shipped to the U.S. The judges rejected arguments that foreign companies could avoid the grip of U.S. antitrust law by billing sales to a middle man before selling the goods into U.S. commerce.

“It is sufficient that a conspiring defendant negotiated to set the price of a good that was imported into the United States, even if that good was sold by another conspirator or imported by someone else,” Tigar wrote in his ruling in a case against makers of cathode ray tubes.

Donato’s ruling in separate litigation involving capacitor manufacturers in Japan and other parts of East Asia embraced the same principle. He also rebuffed defense arguments that transactions that take place completely outside the United States—without the good in question necessarily ever reaching U.S. shores—are outside the reach of U.S. law.

But Donato left unclear what set of facts would have to be present in order to sue over those types of sales, and interpreted previous case law as leaving only a “small opening” for such claims to survive.

Both rulings focused on the scope of the Foreign Trade Antitrust Improvements Act, or FTAIA, a 1982 statute intended to limit companies’ liability for price-fixing claims that did not affect the U.S. market. Although positive developments for the plaintiffs in those cases, they are unlikely to tilt the playing field in favor of the antitrust plaintiffs bar more broadly, attorneys on both sides said.

“These two thoughtful decisions certainly add to the judicial interpretation of the FTAIA, but do not create any new claims for plaintiffs that did not already exist,” said Bruce Simon of the plaintiffs firm Pearson, Simon & Warshaw. Simon noted that both decisions relied heavily on circuit precedent, including an opinion by the U.S. Court of Appeals for the Ninth Circuit in the LCD antitrust case.

The plaintiffs in the capacitors case did not make off with a total win. Donato held open the door to claims related to the sale of goods that never reached the U.S., saying that the defense position that they could never be covered went “too far.”

But he also rejected the “global pricing” theory that the plaintiffs had advanced. Plaintiffs have argued that the defendants attempted to charge a single price for specific capacitors across the world market, and that pumping up prices in the U.S. market furthered that scheme.

“The problem with this theory is that it is analytically indistinguishable from similar theories that have already failed in court, most critically in the Ninth Circuit,” Donato wrote.The antitrust claims of foreign purchasers who were invoiced and received their capacitors abroad “are not barred as a matter of law, but they may not allege a claim on the basis of a global pricing theory,” wrote Donato, who litigated antitrust cases as a partner at Shearman & Sterling before becoming a judge in 2014.

Donato’s ruling had been highly anticipated in the capacitors litigation. The defendant companies have contended that at least 95 percent of the transactions relied on by the plaintiffs in the 2014 suit fall outside the scope of U.S. law.

The judge’s decision puts that figure in doubt. However, it also puts the ball back in plaintiffs’ court to determine just how broad a net they can cast. Joseph Saveri, an attorney representing direct purchasers of capacitors in that case, did not respond to a request for comment on Monday.

Tigar’s ruling comes at a comparatively late stage in the litigation initiated in 2007 over cathode ray tubes, a component used in older television sets. His order denied a motion to dismiss antitrust claims by a group of companies who are directly suing manufacturers as opt-out plaintiffs.