United States v. Hsiung, No. 12-10492 (9th Cir. 2014)Annotate this Case
This criminal antitrust case stems from an international conspiracy between Taiwanese and Korean electronics manufacturers to fix prices for TFT-LCDs. Defendants, AUO, a Taiwanese company, and AUOA, AUO's retailer and wholly owned subsidiary (collectively, "the corporate defendants"), and two executives were convicted of conspiracy to fix prices in violation of the Sherman Act, 15 U.S.C. 1 et seq. The court concluded that venue in the Northern District of California was proper; defendants waived their jury instruction challenge regarding the extraterritoriality of the Sherman Act; the price-fixing scheme as alleged and proved is subject to per se analysis under the Sherman Act; the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. 6a, does not limit the power of the federal courts, but rather, it provides substantive elements under the Sherman Act in cases involving nonimport trade with foreign nations; the FTAIA does not apply to defendants' import trade conduct because the government sufficiently pleaded and proved that the conspirators engaged in import commerce with the United States and that the price-fixing conspiracy violated section 1 of the Sherman Act; there was no constructive amendment because the facts in the indictment necessarily supported the domestic effects claim; the evidence offered in support of the import trade theory alone was sufficient to convict defendants of price-fixing in violation of the Sherman Act; the unambiguous language of the Alternative Fine Statute, 18 U.S.C. 3571(d), permitted the district court to impose the $500 million fine based on the gross gains to all the coconspirators; and no statutory authority or precedent supports AUO's interpretation of the Alternative Fine Statute as requiring joint and several liability and imposing a "one recovery" rule. Accordingly, the court affirmed the judgment of the district court.
Court Description: Criminal Law. The panel affirmed the convictions of all defendants, and the sentence of the only defendant to challenge the sentence, in a criminal antitrust case that stems from an international conspiracy between Taiwanese and Korean electronics manufacturers to fix prices for Liquid Crystal Display panels known as TFT-LCDs in violation of the Sherman Act. The panel held that venue in the Northern District of California was proper. The panel held that the defendants waived the argument that an extraterritoriality defense bars their convictions, and held that, viewing the jury instructions as a whole, nothing misled the jury as to its task. The panel held that the district court properly applied a per se analysis under the Sherman Act, rather than the rule of reason, to this horizontal price-fixing scheme. The panel held that the Foreign Trade Antitrust Improvements Act of 1982, 15 U.S.C. § 6a (FTAIA), is not a subject-matter jurisdiction limitation on the power of the federal courts but a component of the merits of a Sherman Act claim involving nonimport trade or commerce with foreign nations. The panel held that the indictment contained the factual allegations necessary to establish that the FTAIA either did not apply or that its requirements were satisfied. The panel explained that import trade does not fall within the FTAIA at all; it falls within the Sherman Act without further clarification or pleading. The panel therefore disagreed with the defendants’ view that the indictment was insufficient because it did not allege import trade under the FTAIA. The panel held that the government sufficiently pleaded and proved that the conspirators engaged in import commerce with the United States and that the price-fixing conspiracy violated § 1 of the Sherman Act. The panel explained that if the government proceeds on a domestic effects theory, which it did here, the government must plead and prove the requirements for the domestic effects exception to the FTAIA, namely that the defendants’ conduct had a “direct, substantial, and reasonably foreseeable effect” on United States commerce. The panel held that the indictment sufficiently alleged such conduct. The panel held that the domestic effects instruction did not result in a constructive amendment of the indictment. Without deciding whether the evidence was sufficient to affirm on the basis of the domestic effects instruction, the panel concluded that the FTAIA did not bar the prosecution because the government sufficiently proved that the defendants engaged in import trade. The panel affirmed a $500 fine imposed on AU Optronics pursuant to the Alternative Fine Statute, 18 U.S.C. § 3571(d). The panel held that § 3571(d) permits the fine to be based on the gross gains to all the coconspirators rather than on the gains to AU Optronics alone. The panel wrote that no statutory authority or precedent supports AU Optronics’ interpretation of the statute as requiring joint and several liability or imposition of a “one recover” rule.
The court issued a subsequent related opinion or order on January 30, 2015.