United States v. Hsiung

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Criminal Law
  • Date Filed: 07-10-2014
  • Case #: 12-10492; 12-10493; 12-10500; 12-10514
  • Judge(s)/Court Below: Circuit Judge McKeown for the Court; Circuit Judge Thomas and District Judge Kendall
  • Full Text Opinion

The Foreign Trade Antitrust Improvements Act under the Sherman Act, 15 U.S.C. §§ 1—7, does not apply to import trade, unless it proximately causes a direct effect on domestic commerce in the United States.

Taiwanese and Korean electronics manufacturers were convicted of conspiracy under the Sherman Act for fixing prices on the technology known as Liquid Crystal Display, or “TFT-LCDs.” On appeal, the Ninth Circuit was faced with a question as to the reach of the Sherman Act, 15 U.S.C. §§ 1—7 because most of the TFT-LCDs were sold internationally, rather than directly to the United States. The panel closely examined an amendment to the Sherman Act known as the Foreign Trade Antitrust Improvements Act (“FTAIA”). The FTAIA removes “(1) export activities and (2) other commercial activities taking place abroad, unless those activities adversely affect domestic commerce, imports to the United States, or exporting activities of one engaged in such activities in the United States . . .” from the reach of the Sherman Act. The panel held that the FTAIA does not affect import trade. The TFT-LCDs constituted import trade and, thus, fell outside the FTAIA. However, the panel found the appellants’ conduct satisfies the exception to the FTAIA because it had a direct effect on domestic commerce. The panel held, “[c]onduct has a ‘direct’ effect . . . ‘if it follows as an immediate consequence of the defendant’s activity.’” Further, the panel refused to adopt a but-for causation standard for the FTAIA exception and instead adopted a proximate causation standard. Finally, the panel ruled on the Alternative Fine Statute, 18 U.S.C. § 3571(d), and whether the “gross gains” term in the statute refers to only each individual defendant or the conspiracy as a whole. The panel held a fine under the statute could be based on the conspiracy as a whole because there is no statutory authority or other precedent to suggest joint and several liability under the statute. AFFIRMED.

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