White & Case's Defense of Toshiba Wins Global Competition Review's Litigation of the Year Award 2015
White & Case's Global Antitrust Practice's defense of Toshiba Corporation against Motorola in the ongoing multibillion-dollar TFT-LCD litigations won the "Litigation of the Year—Cartel Defense" award from Global Competition Review (GCR) at the annual GCR 2015 Awards dinner. The case has been closely watched due to the broad implications regarding the foreign reach of US antitrust law, particularly for companies that manufacture and sell components overseas that may be used in finished products sold in the United States. The award was based on more than 3,000 votes by GCR readers and was given for "creative, strategic and innovative litigation on behalf of a defendant." GCR is the premier publication for global antitrust and competition issues.
The US Court of Appeals for the Seventh Circuit rejected Motorola's view that it could recover under the US Sherman Act for alleged overcharges on more than over US$5 billion worth of LCD purchases made by its overseas subsidiaries. The appeals court affirmed a lower court ruling under the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA) dismissing 99 percent of Motorola's Sherman Act claims against Toshiba. The Court dispensed with Motorola's claims regarding its foreign subsidiaries' purchases of LCD panels later incorporated into mobile phones sold abroad, with the Court stating that neither the mobile phones nor their panel components ever became part of domestic US commerce. As to Motorola's claims based on its foreign subsidiaries' purchases of LCD panels later incorporated into mobile phones sold in the United States, the Court concluded that Motorola wrongly argued that those purchases were import commerce: Motorola, not defendants, imported those panels into the United States.
The Court also held that Motorola could not establish that these purchases satisfied an exception to the FTAIA because the alleged "cartel-engendered price increase…occurred entirely in foreign commerce." The Court remarked that Motorola's attempts to "enormously increase the global reach of the Sherman Act" revealed that it was "oblivious" to the foreign relations concerns caused by rampant extraterritorial application of US law, a primary concern motivating the FTAIA.