No. 14-8003 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE SEVENTH CIRCUIT 

____________________ 

MOTOROLA MOBILITY LLC,

Plaintiff-Appellant, 

v. 

AU OPTRONICS CORP., et al., 

Defendants-Appellees. 

____________________ 

On Interlocutory Appeal from an Order of the

United States District Court for the Northern District of Illinois 

Case No. 09-cv-6610 (The Honorable Joan B. Gottschall) 

____________________ 

BRIEF FOR THE UNITED STATES AND THE FEDERAL TRADE COMMISSION AS 

AMICI CURIAE IN SUPPORT OF NEITHER PARTY

____________________ 

MARY E. MCLEOD

Principal Deputy Legal Adviser 

U.S. Department of State 

Washington, D.C. 20520 

KELLY R. WELSH

General Counsel 

U.S. Department of Commerce 

Washington, D.C. 20230 

DAVID C. SHONKA

Acting General Counsel 

MARK S. HEGEDUS

Attorney 

Office of the General Counsel 

Federal Trade Commission 

Washington, D.C. 20580 

WILLIAM J. BAER

Assistant Attorney General 

BRENT SNYDER

Deputy Assistant Attorney General 

KRISTEN C. LIMARZI

JAMES J. FREDRICKS 

NICKOLAI G. LEVIN

Attorneys 

U.S. Department of Justice 

Washington, D.C. 20530-0001 

(202) 514-2886 

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TABLE OF CONTENTS 

TABLE OF AUTHORITIES ................................................................................................. ii 

STATEMENT OF INTEREST .............................................................................................. 1 

STATEMENT OF ISSUE PRESENTED ............................................................................... 1 

STATEMENT ....................................................................................................................... 1 

SUMMARY OF ARGUMENT ...............................................................................................5 

ARGUMENT ........................................................................................................................ 7 

I. Section 6a Excludes from Its Coverage Conduct Involving Import Commerce 

Leaving that Conduct Fully Subject to U.S. Antitrust Law ........................................... 7 

II. Section 6a Leaves the Sherman Act Applicable to Conduct that Harms U.S. 

Commerce for Claims Properly Redressing that Harm .............................................. 11 

A. Fixing a Component’s Price Can Directly, Substantially, and Reasonably 

Foreseeably Affect Commerce in Component-Incorporating Products .............. 11 

B. The Effect on U.S. Commerce Does Not Give Rise to Damages Claims by 

Motorola’s Foreign Affiliates But Could Give Rise to Damages Claims by the 

First Purchaser in Affected U.S. Commerce ........................................................ 20 

CONCLUSION .................................................................................................................. 24 

CERTIFICATE OF COMPLIANCE ................................................................................... 25 

CERTIFICATE OF SERVICE ............................................................................................ 26 

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ii 

TABLE OF AUTHORITIES 

FEDERAL CASES 

Animal Science Products, Inc. v. China Minmetals Corp., 

654 F.3d 462 (3d Cir. 2011) ...................................................................................... 8, 9 

Associated General Contractors of California, Inc. v. California State 

Council of Carpenters, 459 U.S. 519 (1983) .................................................... 14, 17, 21 

Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982) .............................................. 14 

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977) ................................ 21 

California v. ARC America Corp., 490 U.S. 93 (1989) .................................................... 22 

CDX Liquidating Trust v. Venrock Associates, 640 F.3d 209 (7th Cir. 2011) ................. 15 

CSX Transportation, Inc. v. McBride, 131 S. Ct. 2630 (2011) .................................... 14, 15 

Empagran S.A. v. F. Hoffmann-LaRoche, Ltd., 417 F.3d 1267 (D.C. Cir. 2005) ............. 21 

F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004)...................... passim

Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993) ..................................... 19 

Illinois v. Ampress Brick Co., 536 F.2d 1163 (7th Cir. 1976) ...................................... 16, 17 

Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) ....................................................... passim 

In re Ductile Iron Pipe Fittings (DIPF) Indirect Purchaser Antitrust 

Litigation, No. 12-169, 2013 WL 5503308 (D.N.J. Oct. 2, 2013) .............................. 17 

In re Dynamic Random Access Memory (DRAM) Antitrust Litigation, 

 546 F.3d 981 (9th Cir. 2008) ...................................................................................... 21 

In re Flash Memory Antitrust Litigation, 643 F. Supp. 2d 1133 (N.D. Cal. 2009) .......... 17 

In re Graphics Processing Units Antitrust Litigation, 

540 F. Supp. 2d 1085 (N.D. Cal. 2007) ....................................................................... 17 

In re Monosodium Glutamate (MSG) Antitrust Litigation, 

477 F.3d 535 (8th Cir. 2007) ....................................................................................... 21 

In re Refrigerant Compressors Antitrust Litigation, 

No. 2:09-md-02042, 2013 WL 1431756 (E.D. Mich. Apr. 9, 2013) ........................... 17 

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iii 

In re TFT-LCD (Flat Panel) Antitrust Litigation, 

586 F. Supp. 2d 1109 (N.D. Cal. 2008) ....................................................................... 17 

In re TFT-LCD (Flat Panel) Antitrust Litigation, 

822 F. Supp. 2d 953 (N.D. Cal. 2011) .......................................................................... 15 

In re Warfarin Sodium Antitrust Litigation, 214 F.3d 395 (3d Cir. 2000) ..................... 17 

In re Western Liquid Asphalt Cases, 487 F.2d 191 (9th Cir. 1973) .................................. 16 

Kansas v. UtiliCorp United, Inc., 497 U.S. 199 (1990) .................................................... 23 

Keogh v. Chicago & Northwestern Railway Co., 260 U.S. 156 (1922) ............................ 21 

Kruman v. Christie's International PLC, 284 F.3d 384 (2d Cir. 2002) ........................... 10 

Lexmark International, Inc. v. Static Control Components, Inc., 

134 S. Ct. 1377 (2014) .................................................................................................. 14 

Lotes Co. v. Hon Hai Precision Industry Co., 753 F.3d 395 (2d Cir. 2014) ............. passim

Metallgesellschaft AG v. Sumitomo Corp. of America, 

325 F.3d 836 (7th Cir. 2003) ...................................................................................... 15 

Mid-West Paper Products Co., v. Continental Group, Inc., 

596 F.2d 573 (3d Cir. 1979) ......................................................................................... 17 

Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012) (en banc) ............. passim

Paroline v. United States, 134 S. Ct. 1710 (2014) ................................................... 13, 14, 15 

Pfizer, Inc. v. Government of India, 434 U.S. 308 (1978) .................................................. 7 

Reiter v. Sonotone Corp., 442 U.S. 330 (1979) ................................................................. 21 

Turicentro, S.A. v. American Airlines Inc., 303 F.3d 293 (3d Cir. 2002) ..................... 4, 8 

United Phosphorus, Ltd. v. Angus Chemical Co., 

322 F.3d 942 (7th Cir. 2003) (en banc) ...................................................................... 18 

United States v. Borden Co., 347 U.S. 514 (1954) ............................................................ 23 

United States v. Hsiung, __ F.3d __, Nos. 12-10492, 12-10493, 12-10500, 

12-10514, 2014 WL 3361084 (9th Cir. July 10, 2014), petitions for 

reh'g filed (Aug. 25, 2014) ....................................................................................... 9, 11 

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iv 

United States v. Leija-Sanchez, 602 F.3d 797 (7th Cir. 2010)......................................... 20 

United States v. LSL Biotechnologies, 379 F.3d 672 (9th Cir. 2004) ............................... 13 

U.S. Gypsum Co. v. Indiana Gas Co., 350 F.3d 623 (7th Cir. 2003) .............................. 22 

 STATUTES AND RULES

15 U.S.C.: 

§ 1 ...................................................................................................................................... 2 

§ 4 ...................................................................................................................................... 2 

§ 6a ............................................................................................................................ passim

§ 15 ...................................................................................................................................... 2 

§ 16(a) ................................................................................................................................ 12 

§ 26 ...................................................................................................................................... 2 

§ 45(a)(3) ...... ................................................................................................................... 1, 2

Federal Rule of Appellate Procedure 29(a) ......................................................................... 1 

Pub. L. No. 97-290, § 102(b), 96 Stat. 1233 (1982) ........................................................... 2 

 MISCELLANEOUS 

1B Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law (4th ed. 2013)....................18 

H.R. Rep. No. 97-686 (1982), reprinted in 1982 U.S.C.C.A.N. 2487 .............................7, 8 

 

Joseph P. Griffin, Extraterritoriality in U.S. and EU Antitrust 

Enforcement, 67 Antitrust L.J. 159 (1999) ................................................................ 20 

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STATEMENT OF INTEREST 

The United States and the Federal Trade Commission enforce the federal antitrust 

laws and have a strong interest in the correct interpretation of the Foreign Trade 

Antitrust Improvements Act of 1982 (FTAIA), which added Section 6a to the Sherman 

Act, 15 U.S.C. § 6a. Section 6a makes the Sherman Act’s other sections inapplicable to 

conduct involving export or wholly foreign commerce except when that conduct has a 

“direct, substantial, and reasonably foreseeable effect” on certain U.S. commerce and 

that effect “gives rise to a claim.” The FTAIA also added Section 5(a)(3) to the FTC Act, 

15 U.S.C. § 45(a)(3), which closely parallels Section 6a. 

The government previously submitted an amicus brief urging the panel to vacate its 

decision and, at the Court’s request, a supplemental amicus brief addressing this case’s 

potential impact on U.S. foreign relations. This amicus brief is submitted pursuant to 

Federal Rule of Appellate Procedure 29(a). 

STATEMENT OF ISSUE PRESENTED 

 Whether the FTAIA bars Motorola’s damages claims for overcharges on price-fixed 

Liquid Crystal Display (LCD) panels delivered to its foreign subsidiaries and 

incorporated into cellphones sold in the United States and elsewhere. 

STATEMENT 

This case involves a global conspiracy to fix the price of LCD panels incorporated 

into cellphones and other devices. It raises questions about the reach of our antitrust 

laws to anticompetitive conduct that involves foreign commerce and harms consumers 

in the United States and elsewhere. 

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1. Section 1 of the Sherman Act is a criminal statute that outlaws agreements “in 

restraint of trade or commerce among the several States, or with foreign nations.” 15 

U.S.C. § 1. This includes conspiracies among competitors to fix prices, which are 

criminally prosecuted as felonies. In addition to criminal prosecutions, the government 

can “institute proceedings in equity to prevent and restrain [Section 1] violations.” Id. 

§ 4. Also, “any person” injured “by reason of” a violation can seek treble damages, id. 

§ 15, and “any person” can seek “injunctive relief . . . against threatened loss or damage 

by a violation,” id. § 26. 

Congress enacted the FTAIA, which added Section 6a to the Sherman Act, with the 

express purpose to “increase United States exports of products and services,” Pub. L. 

No. 97-290, § 102(b), 96 Stat. 1233, 1234. Section 6a provides that: 

Sections 1 to 7 of [the Sherman Act] shall not apply to conduct involving trade or 

commerce (other than import trade or import commerce) with foreign nations 

unless— 

(1) such conduct has a direct, substantial, and reasonably foreseeable effect— 

(A) on trade or commerce which is not trade or commerce with foreign 

nations, or on import trade or import commerce with foreign nations; or 

(B) on export trade or export commerce with foreign nations, of a person 

engaged in such trade or commerce in the United States; and 

(2) such effect gives rise to a claim under the provisions of sections 1 to 7 of this 

title, other than this section. 

15 U.S.C. § 6a; see also 15 U.S.C. § 45(a)(3) (FTAIA addition to FTC Act). 

Section 6a “seeks to make clear to American exporters (and to firms doing business 

abroad) that the Sherman Act does not prevent them from entering into business 

arrangements . . . however anticompetitive, as long as those arrangements adversely 

affect only foreign markets.” F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 

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155, 161 (2004). Congress also sought to ensure that purchasers in the United States 

remained fully protected by the federal antitrust laws. Accordingly, conduct involving 

“[i]mport trade and commerce [is] excluded at the outset from the coverage of the 

FTAIA in the same way that domestic interstate commerce is excluded.” Minn-Chem, 

Inc. v. Agrium, Inc., 683 F.3d 845, 854 (7th Cir. 2012) (en banc). And the FTAIA leaves 

conduct involving export or wholly foreign commerce within the Sherman Act’s reach 

when “the conduct both (1) sufficiently affects American commerce, i.e., it has a ‘direct, 

substantial, and reasonably foreseeable effect’ on American domestic, import or 

(certain) export commerce, and (2) has an effect of a kind that antitrust law considers 

harmful, i.e., the ‘effect’ must ‘giv[e] rise to a [Sherman Act] claim.’” Empagran, 542 

U.S. at 162 (quoting 15 U.S.C. §§ 6a(1), (2)). 

2. Motorola Mobility Inc. (Motorola) sued foreign makers of LCD panels in the 

Northern District of Illinois, alleging that they conspired to fix prices on LCD panels in 

violation of Section 1. The conspiracy allegedly raised prices on LCD panels, and on 

cellphones and other devices incorporating those panels, many of which were 

“specifically destined for sale and use in the United States.” 07-1827 N.D. Cal. Dkt. 1503, 

¶ 133, at 34. 

Motorola sought damages for overcharges based on three categories of price-fixed 

LCD panels: (I) panels delivered to Motorola in the United States, (II) panels delivered 

to Motorola’s foreign subsidiaries outside the United States, where they were 

incorporated into cellphones sold in the United States, and (III) panels delivered to the 

foreign subsidiaries and incorporated into cellphones sold in foreign countries. 

The case was transferred to the Northern District of California for pretrial 

proceedings as part of multi-district litigation. Defendants moved to dismiss Motorola’s 

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Category II and III claims as barred by Section 6a. The court granted the motion. The 

claims did not fall within the import-commerce exclusion because defendants did not 

import the panels into the United States. A7. And the effects exception was inapplicable 

because Motorola did not allege “any facts showing how [its] foreign injuries were 

proximately caused by any domestic effects of defendants’ conduct.” A10. 

Motorola amended its complaint, adding allegations about the negotiation of panel 

prices in the United States. Defendants again moved to dismiss the Category II and III 

claims, but the court denied the motion because the new allegations established “a 

concrete link” between “defendants’ price-setting conduct,” “its domestic effect (the 

negotiations between Motorola and defendants . . .),” and “the foreign injury suffered by 

Motorola and its affiliates (payment of higher prices abroad).” A23. 

Defendants moved for partial summary judgment on the Category II and III claims, 

which the court denied. A34. The case was remanded to the Northern District of Illinois 

for trial. Defendants sought reconsideration of the MDL court’s denial of partial 

summary judgment, arguing only that any effect the price-fixing conspiracy had on U.S. 

commerce did not give rise to Motorola’s Category II and III claims. A50. The district 

court granted the motion. It held that the conspiracy’s domestic effect did not give rise 

to the claims at issue because Motorola’s injuries were not proximately caused by that 

effect. A52. The court also held that there was no “substantial” effect on U.S. commerce 

from “Motorola’s domestic approval of the prices that its foreign affiliates paid.” A53. 

The court declined to reconsider the MDL court’s holding that the Category II and 

III claims do not fall within the import-commerce exclusion. “[B]ecause the defendants 

did not directly bring their product into the United States, they cannot be labeled 

‘importers’ and did not engage in ‘import trade or commerce.’” A54 (quoting Turicentro, 

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S.A. v. American Airlines Inc., 303 F.3d 293, 303 (3d Cir. 2002)). The holding, 

therefore, “was clearly supported by precedent.” A55. 

3. This Court issued an opinion granting Motorola’s petition for interlocutory appeal 

and affirming the judgment below, but later vacated that opinion and granted 

Motorola’s petition. 

SUMMARY OF ARGUMENT 

 The FTAIA makes clear that the Sherman Act does not apply to conduct that 

adversely affects only foreign markets, but it also ensures that purchasers in the United 

States remain fully protected by the federal antitrust laws. This Court should not erode 

this protection. 

 1. Conduct involving import commerce is excluded from FTAIA’s coverage, and the 

Sherman Act thus applies fully to such conduct. This import-commerce exclusion is not 

limited to circumstances in which the defendants are importers or specifically “target” 

U.S. import commerce. A price-fixing conspiracy can involve import commerce even if 

the price-fixed product is physically imported by a third party or if the defendants did 

not focus on U.S. imports. A narrower interpretation of the exclusion would undermine 

the FTAIA’s purpose to protect purchasers in the United States. 

 The LCD price-fixing conspiracy involved import commerce because defendants 

fixed the price of LCD panels sold for delivery to the United States. Yet, this does not, by 

itself, entitle Motorola to recover damages for overcharges on all its panel purchases. 

But it does allow the government to bring criminal and civil enforcement actions. Unlike 

civil damage claims, in which courts should differentiate among claims based on the 

underlying transactions, government enforcement actions seek to prosecute or enjoin 

violations of law, not to obtain damages compensating for particular injuries. 

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 2. The price-fixing conspiracy also affected import and domestic commerce in 

cellphones by raising their price. This effect is not only substantial and reasonably 

foreseeable, but also direct. The natural and probable consequence of increasing the 

price of a significant component like LCD panels is to increase the price of cellphones 

that incorporate those panels. A contrary holding risks constraining the government’s 

ability to prosecute offshore component price fixing that threatens massive harm to U.S. 

commerce and consumers. 

 While the government may prosecute conduct that has the requisite effect under 

Section 6a(1), Section 6a(2) requires that the effect “give rise to [plaintiff’s] claim,” and 

thus limits what injuries are redressable by damages claims. The injury to Motorola’s 

foreign affiliates is not caused by the inflated prices of cellphones sold in import or 

domestic commerce, and therefore the affiliates’ claims do not arise from that effect on 

U.S. commerce. The first purchasers of cellphones in affected U.S. commerce, however, 

did suffer an injury arising out of the price fixing’s U.S. effect. 

 The Illinois Brick doctrine would ordinarily bar these purchasers from recovering 

damages under federal law because they did not purchase directly from the 

conspirators, but that doctrine should be construed to permit damages claims by the 

first purchaser in affected U.S. commerce when Section 6a(2) bars the direct purchasers’ 

claims. That construction would permit vigorous private enforcement of the antitrust 

laws—the reason full recovery is ordinarily concentrated in direct purchasers—without 

implicating the doctrine’s concerns about multiple recovery and apportionment. Absent 

that construction, it is possible that no private plaintiff could recover damages under the 

federal antitrust laws. 

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 In any case, government enforcement is critical to combating foreign price-fixing 

cartels that threaten significant harm in the United States. Therefore, this Court should 

hold that a conspiracy to fix the price of a component can directly affect import 

commerce in finished products incorporating that component and that the conspiracy in 

this case did directly affect that commerce. That holding would ensure the government 

is able to enforce the federal antitrust laws regardless of any limitations on private 

damages claims resulting from Section 6a(2).

ARGUMENT 

“Congress’ foremost concern in passing the antitrust laws was the protection of 

Americans.” Pfizer, Inc. v. Gov’t of India, 434 U.S. 308, 314 (1978). When Congress 

enacted the FTAIA, adding Section 6a to the Sherman Act, it “preserv[ed] antitrust 

protections in the domestic marketplace for all purchasers.” H.R. Rep. No. 97-686, at 10 

(1982), reprinted in 1982 U.S.C.C.A.N. 2487, 2495. Thus, Section 6a does not cover 

domestic commerce and excludes import commerce “at the outset from [its] coverage.” 

Minn-Chem, 683 F.3d at 854. Additionally, Section 6a provides an effects exception that 

leaves the Sherman Act applicable to anticompetitive conduct involving U.S. export 

commerce and wholly foreign commerce when that conduct sufficiently affects U.S. 

domestic, import (or certain export) commerce and that effect gives rise to a claim. Id. 

I. Section 6a Excludes from Its Coverage Conduct Involving Import 

Commerce Leaving that Conduct Fully Subject to U.S. Antitrust Law 

 Conduct “involving” import trade or commerce is not exempted from the Sherman 

Act, 15 U.S.C. § 6a, and therefore “is not subject to the FTAIA’s extra layer of protection 

against Sherman Act claims implicating foreign activities.” Minn-Chem, 683 F.3d at 

855. Under this import-commerce exclusion, “‘import restraints, which can be 

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damaging to American consumers, remain covered by the law.’” H.R. Rep. No. 97-686, 

at 9 (quoting statement of James R. Atwood), reprinted in 1982 U.S.C.C.A.N. at 2494. 

Contrary to the apparent understanding of both courts below, the exclusion is not 

limited to situations in which defendants themselves act as importers. The courts relied 

on Turicentro, S.A. v. American Airlines Inc., 303 F.3d 293 (3d Cir. 2002), but 

Turicentro does not support such a limitation. There, foreign travel agents alleged U.S. 

airlines and their trade association conspired to fix commissions paid to the agents. Id. 

at 302. The agents contended that the import-commerce exclusion applied because “the 

airlines ‘imported’ their services for the purpose of selling airplane tickets.” Id. at 303. 

The Third Circuit rejected this contention, explaining that airlines are not “importers” of 

travel agents and have not engaged in “import trade or commerce” by setting the agents’ 

commissions. Id. 

In Animal Science Products, Inc. v. China Minmetals Corp., 654 F.3d 462 (3d Cir. 

2011), the Third Circuit explained that Turicentro did not limit the exclusion to when 

defendants directly bring items or services into the United States. “Functioning as a 

physical importer may satisfy the import trade or commerce exception, but it is not a 

necessary prerequisite.” Id. at 470. The Third Circuit disagreed with the district court’s 

holding that the exclusion was inapplicable to claims by magnesite purchasers in the 

United States because the Chinese producers and exporters that allegedly conspired to 

fix the price of exports to the United States were not also importers. Id. at 464, 470. The 

exclusion could be satisfied, the Third Circuit explained, by proof that “defendants’ 

conduct target[ed] import goods or services.” Id. at 470. 

Anticompetitive conduct often can involve import commerce, even though the 

perpetrators are not themselves importers. For example, a boycott in which foreign 

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producers agree not to sell into the United States is conduct “involving” import 

commerce; the conspirators restrict import commerce by agreeing not to engage in it. 

Likewise, conduct “involving” import commerce occurs when conspirators fix the price 

of services necessary to the importation of products, for example, freight transportation 

into the United States. And perhaps most commonly, a conspiracy to fix the price of 

products manufactured abroad and sold to customers in the United States, but 

physically imported by a third party, is conduct involving import commerce. See id. at 

471 n.11 (emphasizing the importance of defendants’ “sales of magnesite for delivery in 

the United States”). 

Anticompetitive conduct can also involve import commerce even though defendants 

did not specifically “target” that commerce. A conspiracy could fix worldwide prices, 

including on U.S. imports, and thus involve import commerce even when defendants did 

not focus on U.S. imports or they sold or delivered only a relatively small proportion of 

the price-fixed products into the United States. Thus, while “targeting” may be useful to 

explain why the import-commerce exclusion applies in some cases, “[t]argeting is not a 

legal element for import trade under the Sherman Act.” United States v. Hsiung, __ 

F.3d __, Nos. 12-10492, 12-10493, 12-10500, 12-10514, 2014 WL 3361084, at *15 (9th 

Cir. July 10, 2014), petitions for reh’g filed (Aug. 25, 2014). “Targeting” should not set 

the standard for the exclusion because it does not convey the full breadth of the 

statutory term “involving.” See US-FTC Am. Br. 16-20, Minn-Chem, Inc. v. Agrium, 

Inc., No. 10-1712 (7th Cir. Jan. 12, 2012) (Dkt. 62-2), available at

http://www.justice.gov/atr/cases/f279300/279368.pdf. 

Motorola’s Category I claims allege that defendants fixed the price of panels 

manufactured abroad and sold to it in the United States. This is conduct involving 

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import commerce and thus falls outside Section 6a’s coverage, regardless of who 

physically imported the panels. 

But that conclusion, by itself, does not permit Motorola to recover on all its damages 

claims, Motorola Br. 50-52. As Empagran makes clear, the Sherman Act “can apply and 

not apply to the same conduct, depending upon other circumstances,” including “the 

related underlying harm.” 542 U.S. at 174. Permitting Motorola to recover on all its 

claims because it purchased some panels in import commerce would allow recovery for 

independently caused foreign injuries on the basis of happenstance. 

In damages actions, courts should distinguish among claims based on the 

underlying transactions to ensure each claim redresses injuries consistent with Sections 

1 and 6a, see id. at 169-70, and antitrust standing and injury rules. In this way, courts 

can dismiss those claims seeking damages for foreign injury caused by foreign 

anticompetitive conduct when the conduct causing the injury involves import commerce 

but the injury is unrelated to that commerce. As Empagran recognized, the federal 

antitrust laws do not “redress foreign injury in such circumstances” regardless of the 

FTAIA, but rather “reflect a legislative effort to redress domestic antitrust injury that 

foreign anticompetitive conduct has caused.” Id. at 165, 169-73. 

A different approach is required for criminal prosecutions and actions in equity 

brought by the government under Sections 1-4 of the Sherman Act. In these instances, 

the sovereign sues not to redress a particular injury in its business or to obtain 

compensation for damages to its property, but to prosecute or enjoin a violation of its 

laws. See id. at 170; Kruman v. Christie’s Int’l PLC, 284 F.3d 384, 398 (2d Cir. 2002) 

(the government can “bring an equity action to enjoin a violation of the Sherman Act” 

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even “when no plaintiff has suffered an injury”), abrogated on other grounds by 

Empagran, 542 U.S. 155. 

If the conduct both involves import commerce and has the requisite effects on U.S. 

commerce, a criminal conviction or civil judgment in a government enforcement action 

can be based on either. In a recent prosecution of a related LCD panel cartel, the Ninth 

Circuit concluded that the indictment adequately alleged both Section 6a’s importcommerce exclusion and its effects exception. Hsiung, 2014 WL 3361084, at *15-*17. 

Yet, the court of appeals found it unnecessary to decide whether evidence supported the 

effects exception because evidence supporting the import-commerce exclusion alone 

was sufficient to affirm defendants’ convictions. Id. at *18. 

II. Section 6a Leaves the Sherman Act Applicable to Conduct that Harms 

U.S. Commerce for Claims Properly Redressing that Harm 

Under Section 6a’s effects exception, conduct involving export or even wholly 

foreign commerce is within the Sherman Act’s reach if (a) it has a “direct, substantial, 

and reasonably foreseeable effect” on American domestic, import or (certain) export 

commerce, 15 U.S.C. § 6a(1), and (b) that “effect gives rise to a claim” under the 

Sherman Act, id. § 6a(2). 

A. Fixing a Component’s Price Can Directly, Substantially, and Reasonably 

Foreseeably Affect Commerce in Component-Incorporating Products 

 The district court found that “Motorola’s domestic approval of the prices that its 

foreign affiliates paid” was “not a ‘substantial’ effect on American domestic or import 

commerce” and thus Motorola’s claims failed the effects exception’s first requirement. 

A53. But the court did not consider the effects defendants’ conspiracy to raise the price 

of LCD panels had on import and domestic commerce in cellphones incorporating those 

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panels. The conspiracy could and did affect that commerce, and this effect was 

substantial, reasonably foreseeable, and direct. 

 Defendants acknowledge that, if the alleged conspiracy existed and succeeded,1 it 

had an effect on commerce in the cellphones sold by Motorola in the United States. In 

support of their motion for reconsideration below, defendants relied on the opinion of 

“Motorola’s own economist . . . that Motorola passed through any overcharges to its 

customers more than dollar-for-dollar.” 09-6610 N.D. Ill. Dkt. 116-1, at 20 n.7. 

 Defendants also acknowledge that they sold Motorola approximately $5.4 billion in 

LCD panels, approximately 40% of which were incorporated into cellphones that 

reached the United States. Id. at 1, 3. As in Minn-Chem, the billions of dollars of affected 

commerce here “easily satisfy the requirement to show substantial effects in the U.S. 

market.” 683 F.3d at 856. 

 “Foreseeability is equally straightforward.” Id. It is objectively foreseeable, almost 

certain, that defendants’ raising the price of a major component of cellphones would 

raise the price of cellphones sold in import and domestic commerce. 

 That effect on U.S. commerce in cellphones was also direct within the meaning of 

Section 6a(1). Cellphone purchasers in U.S. commerce did not directly purchase LCD 

panels from the defendants. But under this Court’s “reasonably proximate causal nexus” 

test, 683 F.3d at 857, the defendants’ price fixing of LCD panels incorporated into 

cellphones abroad nevertheless directly affected U.S. commerce in cellphones. 

 

1 For defendants criminally convicted for participating in this price-fixing conspiracy, 

their convictions conclusively establish the conspiracy’s existence and their 

participation. See 15 U.S.C. § 16(a). For purposes of summary judgment in this civil 

action, there is at least a genuine issue of material fact regarding the conspiracy’s 

existence and success. 

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13 

 In Minn-Chem, this Court rejected the Ninth Circuit’s view that an effect on U.S. 

commerce is “direct” only “if it follows ‘as an immediate consequence’ of the defendant’s 

activity.” Id.; see United States v. LSL Biotechs., 379 F.3d 672, 680 (9th Cir. 2004). As 

the Court explained, “[s]uperimposing the idea of ‘immediate consequence’ on top of the 

full [integrated] phrase [‘direct, substantial, and reasonably foreseeable’] results in a 

stricter test than the complete text of the statute can bear” and “comes close to ignoring 

the fact that straightforward import commerce has already been excluded from the 

FTAIA’s coverage.” Minn-Chem, 683 F.3d at 857. The Court was thus “persuaded that 

the Department of Justice’s approach”―that “‘direct’” means only “a reasonably 

proximate causal nexus”―“is more consistent with the language of the statute.” Id. That 

approach, the Court explained, “addresses the classic concern about remoteness,” 

excluding “from the Sherman Act foreign activities that are too remote from the ultimate 

effects on U.S. domestic or import commerce.” Id.

 The Second Circuit recently adopted Minn-Chem’s interpretation of “direct” in 

Section 6a(1). Lotes Co. v. Hon Hai Precision Indus. Co., 753 F.3d 395, 409-13 (2d Cir. 

2014). It too recognized that to “demand that any domestic effect must follow as an 

immediate consequence of a defendant’s foreign anticompetitive conduct would all but 

collapse the FTAIA’s domestic effects exception into its separate import exclusion.” Id. 

at 411. “Interpreting ‘direct’ to require only a reasonably proximate causal nexus, by 

contrast, avoids these problems while still addressing antitrust law’s classic aversion to 

remote injuries.” Id. 

 Proximate causation is a “flexible concept that generally refers to the basic 

requirement that . . . there must be some direct relation between the injury asserted and 

the injurious conduct alleged.” Paroline v. United States, 134 S. Ct. 1710, 1719 (2014) 

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14 

(citations and internal quotations omitted; ellipsis in original). The concept “provides 

the legal vocabulary for” excluding liability for conduct deemed too remote from its 

injurious effect by asking “for example, ‘whether the injury that resulted was within the 

scope of the risk created by the defendant’s [wrongful] act; whether the injury was a 

natural or probable consequence of the [conduct]; whether there was a superseding or 

intervening cause; whether the [conduct] was anything more than an antecedent event 

without which the harm would not have occurred.’” Lotes, 753 F.3d at 412 (quoting CSX 

Transp., Inc. v. McBride, 131 S. Ct. 2630, 2652 (2011) (Roberts, C.J., dissenting) 

(alterations in original)). In this way, proximate cause screens out causal connections 

“so attenuated that the consequence is more aptly described as mere fortuity,” Paroline, 

134 S. Ct. at 1719. 

 The “courts have a great deal of experience applying” the “proximate-cause inquiry.” 

Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1390 (2014). For 

example, courts “analyze antitrust standing by considering, among other factors, the 

‘directness or indirectness of the asserted injury,’ Assoc. Gen. Contractors of Cal., Inc. v. 

Cal. State Council of Carpenters, 459 U.S. 519, 540 (1983), using familiar principles of 

proximate causation, see Blue Shield of Va. v. McCready, 457 U.S. 465, 476-77 & n. 13 

(1982).” Lotes, 753 F.3d at 412. “Minn-Chem’s ‘reasonably proximate causal nexus’ 

standard incorporates all of this useful judicial experience.” Id. 

Applying this standard, this Court should hold that defendants’ conspiracy had a 

direct effect on import and domestic commerce in cellphones. The natural and probable 

consequence of increasing the price of a significant component like LCD panels is an 

increase in the price of cellphones. Motorola’s decision on what price to charge is an 

intermediate link in the causal chain. But as Minn-Chem’s and Lotes’ rejection of the 

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immediate-consequence standard demonstrates, the mere existence of an intermediate 

link does not render an effect indirect. Motorola’s pricing decision is not a superseding 

or intervening cause (nor is the cellphone purchasers’ decision to accept that price). In 

this marketplace, as the expert evidence of what happened corroborates, see supra p. 12, 

the natural, predictable, and probable consequence of defendants’ charging more for 

LCD panels was higher prices for cellphones containing those panels. See, e.g., 07-1827 

N.D. Cal. Dkt. 7843-4, ¶ 451, at 196-97. 

 That defendants’ increasing the price of a major component of cellphones increased 

the price of cellphones is by no means a “mere fortuity,” Paroline, 134 S. Ct. at 1719, nor 

is it just some “antecedent event,” CSX Transp., 131 S. Ct. at 2652, or a “freakish” 

accident impossible to predict, CDX Liquidating Trust v. Venrock Assocs., 640 F.3d 

209, 214 (7th Cir. 2011). To the contrary, the “effect of defendants’ anticompetitive 

conduct did not change significantly between the beginning of the process (overcharges 

for LCD panels) and the end (overcharges for [cellphones incorporating those panels]),” 

and it “‘proceeded without deviation or interruption’ from the LCD manufacturer to the 

American retail store.” In re TFT-LCD (Flat Panel) Antitrust Litig., 822 F. Supp. 2d 953, 

964 (N.D. Cal. 2011). 

Courts considering Section 6a’s effects exception have recognized that “domestic 

and foreign markets are interrelated and influence each other.” Metallgesellschaft AG v. 

Sumitomo Corp. of Am., 325 F.3d 836, 842 (7th Cir. 2003). And “antitrust law has long 

recognized that anticompetitive injuries can be transmitted through multi-layered 

supply chains.” Lotes, 753 F.3d at 412. “There is nothing inherent in the nature of 

outsourcing or international supply chains that necessarily prevents the transmission of 

anticompetitive harms or renders any and all domestic effects impermissibly remote 

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and indirect.” Id. at 413. Accordingly, the Second Circuit recognized that the district 

court had erred when its direct-effects analysis “placed near-dispositive weight on the 

fact that” the allegedly monopolized components “are manufactured and assembled into 

finished computer products” in China “before being sold in the United States.” Id. at 

412. 

 In another context, antitrust standing, this Court considered the same question: 

whether the injury to purchasers of component-incorporating products is too remote 

from a conspiracy to fix the price of the component. Illinois v. Ampress Brick Co.

involved plaintiffs that “purchased buildings of which concrete block was a component 

part” and sought damages from companies fixing the price of the concrete block. 536 

F.2d 1163, 1164 (7th Cir. 1976). The “critical issue” was “‘whether parties more remote 

than the direct purchaser [e.g., a masonry contractor] from an alleged anti-trust violator 

have standing to sue under Section 4 of the Clayton Act.’” Id. at 1164 (citation omitted). 

The district court had held that “as to ultimate consumers [such as plaintiffs], their 

injuries are too remote and [in]consequential to provide legal standing to sue,” id. 

(alteration in original), but this Court disagreed, id. at 1165. Relying on a decision that 

characterized the injury to indirect purchasers from overcharges passed on to them as 

proximately caused damages, this Court held that if the indirect purchases “can prove a 

violation which resulted in an injury to them, they ought to recover.” Id.; see id. at 1165-

67 (citing In re Western Liquid Asphalt Cases, 487 F.2d 191 (9th Cir. 1973), and other 

cases). 

Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), reversed Ampress Brick on other 

grounds, but the Supreme Court’s holding “in no way implied that anticompetitive 

injuries cannot be passed through to subsequent purchasers; to the contrary, the Court 

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acknowledged that its rule ‘denies recovery to those indirect purchasers who may have 

been actually injured by antitrust violations.’” Lotes, 753 F.3d at 413 n.7 (quoting 431 

U.S. at 746). Nor did Illinois Brick vacate Ampress Brick; the Supreme Court specifically 

declined to disturb this Court’s standing holding. See 431 U.S. at 728 n.7. 

 Other courts have reached the same conclusion as Ampress Brick, holding that 

injuries to indirect purchasers are not too remote, even when they are several steps 

removed from the antitrust violation in the chain of distribution. See In re Warfarin 

Sodium Antitrust Litig., 214 F.3d 395, 399-401 (3d Cir. 2000); Mid-West Paper Prods. 

Co., v. Cont’l Grp., Inc., 596 F.2d 573, 592-94 (3d Cir. 1979) (for purposes of injunctive 

relief, “the damages—if any—sustained by the supermarket plaintiffs, as indirect 

purchasers, are proximately caused by the price-fixers’ violations”).2

A holding that component price fixing cannot proximately cause effects on 

commerce in component-incorporating products is likely to constrain the government’s 

ability to prosecute cartels that can significantly harm U.S. commerce and consumers. 

The “kind of complex manufacturing process” here “is increasingly common in our 

modern global economy.” Lotes, 753 F.3d at 412. And anticompetitive conduct involving 

 

2 In damages actions under state antitrust laws, lower courts applying Associated 

General Contractors’ directness-of-injury factor “have held that ‘indirect purchasers of 

components had satisfied their burden of pleading directness of injury by alleging that 

the cost of the component was traceable through the product distribution chain.’” In re 

Ductile Iron Pipe Fittings (DIPF) Indirect Purchaser Antitrust Litig., No. 12-169, 2013 

WL 5503308, at *17 (D.N.J. Oct. 2, 2013) (quoting In re Flash Memory Antitrust Litig., 

643 F. Supp. 2d 1133, 1155 (N.D. Cal. 2009), and citing In re TFT-LCD (Flat Panel) 

Antitrust Litig., 586 F. Supp. 2d 1109, 1123 (N.D. Cal. 2008), and In re Graphics 

Processing Units Antitrust Litig., 540 F. Supp. 2d 1085, 1098 (N.D. Cal. 2007)). But see

In re Refrigerant Compressors Antitrust Litig., No. 2:09-md-02042, 2013 WL 1431756, 

at *14 (E.D. Mich. Apr. 9, 2013) (citing the “multiple distribution and retail channels” 

and holding “that the causal nexus between the alleged conspiracy . . . and the [indirect 

purchasers’] alleged injury . . . is too remote and attenuated to support antitrust 

standing”). 

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components often causes significant harm in downstream consumer markets in the 

United States. See 1B Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 272i1, at 

309 (4th ed. 2013) (“Many, perhaps most, restraints are on ‘intermediate’ goods,” but 

effects “in upstream markets quickly filter into consumer markets as well.”). 

But the holding we suggest—that component price fixing can directly affect 

commerce in component-incorporating products—would preserve the government’s 

ability to protect U.S. consumers and commerce. And it would do so without turning 

this country into the “world’s competition police officer,” United Phosphorus, Ltd. v. 

Angus Chem. Co., 322 F.3d 942, 960 (7th Cir. 2003) (en banc) (Wood, J., dissenting), or 

opening U.S. courts to damages claims from plaintiffs around the world. 

Anticompetitive conduct involving components in wholly foreign commerce often would 

have no practical effect on U.S. commerce, in which case the Sherman Act would not 

apply. Even when there is a close, significant, and predictable causal connection 

between fixing the price of a component made abroad and U.S. commerce in products 

incorporating that component, not every claim arises from that effect. See Empagran, 

542 U.S. at 173-75; Minn-Chem, 683 F.3d at 858 (the gives-rise-to requirement “will 

protect many a foreign defendant”); infra Section II.B. But when a claim does arise from 

such an effect, the Supreme Court has stated that the “application of our antitrust laws 

to foreign anticompetitive conduct is nonetheless reasonable, and hence consistent with 

principles of prescriptive comity, insofar as they reflect a legislative effort to redress 

domestic antitrust injury that foreign anticompetitive conduct has caused.” Empagran, 

542 U.S. at 165. 

Nor should the suggested holding disturb the United States’ international relations. 

The United States has criminally prosecuted several foreign defendants for fixing the 

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price of LCD panels manufactured abroad, based in part on the price fixing’s effects on 

import commerce in products incorporating those LCD panels. These prosecutions have 

not caused international friction. And they have not strained the U.S. government’s 

cooperative relations with foreign governments; rather, the U.S. antitrust enforcers 

continue to work with foreign enforcers so each can appropriately and successfully 

prosecute international price-fixing cartels. See US Supp. Am. Br. 10. 

This is not surprising because today price fixing is almost universally condemned, 

id. at 6, and the extraterritorial application of antitrust laws on the basis of effects is 

accepted by many jurisdictions around the world, id. at 6-9. The European Union and 

Japan have recently applied their competition laws to conduct involving components 

incorporated into products outside their borders. Id. at 9 & n.7. 

In any event, it is “well established” that the federal antitrust laws apply “to foreign 

conduct that was meant to produce and did in fact produce some substantial effect in 

the United States,” Hartford Fire Ins. Co. v. California, 509 U.S. 764, 796 (1993), 

despite the risk that “when applied to foreign conduct [they] can interfere with a foreign 

nation’s ability independently to regulate its own commercial affairs,” Empagran, 542 

U.S. at 165. Congress was aware of that risk when enacting Section 6a, but determined 

that application of those laws was reasonable when U.S. commerce was harmed. See USFTC Am. Br. 11-12; US Supp. Am. Br. 5 & n.3. While “comity counsel[s] against” 

applying U.S. antitrust laws to foreign conduct causing only foreign injuries, the 

situation is different “where that conduct also causes domestic harm.” Empagran, 542 

U.S. at 166, 169. 

For many years the government has criminally prosecuted foreign companies for 

participating in international price-fixing cartels without causing conflict with foreign 

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jurisdictions, but some jurisdictions have occasionally expressed concern about private 

plaintiffs seeking treble damages under U.S. antitrust law for injuries sustained outside 

the United States. See US Supp. Am. Br. 11-12. This disparity may reflect the 

government’s careful consideration of international comity and its prudence in bringing 

antitrust enforcement actions that may implicate another sovereign’s interests. Id. at 10. 

“[P]rivate plaintiffs,” in contrast, “often are unwilling to exercise the degree of selfrestraint and consideration of foreign governmental sensibilities generally exercised by 

the U.S. Government.” Empagran, 542 U.S. at 171 (quoting Joseph P. Griffin, 

Extraterritoriality in U.S. and EU Antitrust Enforcement, 67 Antitrust L.J. 159, 194 

(1999)). 

Foreign jurisdictions’ concerns about private damages claims are best addressed by 

Section 6a(2). Unlike Section 6a(1), Section 6a(2) provides claim-specific limits by 

requiring that the effect gives rise to the plaintiff’s claim. In this way, it can permit 

claims redressing injuries caused by foreign conduct’s effects on import or domestic 

commerce, while making the Sherman Act inapplicable to the same conduct if the claims 

seek damages for independently caused foreign injury. Empagran, 542 U.S. at 174; 

United States v. Leija-Sanchez, 602 F.3d 797, 801 (7th Cir. 2010).

B. The Effect on U.S. Commerce Does Not Give Rise to Damages Claims by 

Motorola’s Foreign Affiliates But Could Give Rise to Damages Claims by 

the First Purchaser in Affected U.S. Commerce 

Section 6a’s effects exception ensures that even conduct involving wholly foreign 

commerce remains within the reach of the Sherman Act when it has the requisite effect 

in the United States. The Sherman Act is enforced both by public and private plaintiffs. 

The private damages remedy “provide[s] a significant supplement to the limited 

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resources available to the Department of Justice for enforcing the antitrust laws and 

deterring violations.” Reiter v. Sonotone Corp., 442 U.S. 330, 344 (1979). 

But there are limits on what injuries, although caused by anticompetitive conduct, 

can be redressed through the private damages remedy. See Associated Gen. 

Contractors, supra; Illinois Brick, supra; Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 

429 U.S. 477 (1977); Keogh v. Chicago & Nw. Ry. Co., 260 U.S. 156 (1922). For conduct 

involving export or wholly foreign commerce but affecting import or domestic 

commerce, Section 6a(2) provides one limit by requiring that the effect on U.S. 

commerce “gives rise to [plaintiff’s] claim.” For example, in Empagran, the Supreme 

Court rejected the argument that foreign plaintiffs who purchased price-fixed products 

in wholly foreign commerce satisfied this gives-rise-to requirement by showing that the 

price fixing injuring them also affected U.S. commerce and that effect gave rise to claims 

by purchasers in the United States. 542 U.S. at 173-75. 

On remand in Empagran, the D.C. Circuit held that “[t]he statutory language—

‘gives rise to’—indicates a direct causal relationship, that is, proximate causation,” 

between the conduct’s effects on U.S. commerce and the plaintiff’s claim. Empagran 

S.A. v. F. Hoffmann-LaRoche, Ltd., 417 F.3d 1267, 1271 (D.C. Cir. 2005). All other 

courts of appeals to consider the question have agreed, holding the effect must be the 

proximate cause of the plaintiff’s injury. Lotes, 753 F.3d at 414; In re Dynamic Random 

Access Memory (DRAM) Antitrust Litig., 546 F.3d 981, 988 (9th Cir. 2008); In re 

Monosodium Glutamate (MSG) Antitrust Litig., 477 F.3d 535, 538 (8th Cir. 2007). 

Defendants’ LCD panel price fixing had a direct, substantial, and reasonably 

foreseeable effect on U.S. commerce by increasing the price of cellphones sold in the 

United States that incorporated defendants’ price-fixed panels, but that effect does not 

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give rise to the claims of Motorola’s foreign affiliates (which were assigned to Motorola). 

These claims are for overcharges paid on LCD panels manufactured and delivered in 

Asia. Thus, the cause of the affiliates’ injury cannot be found in the effect defendants’ 

conduct had on import or domestic commerce in cellphones. “[T]o the extent there is 

any causal connection between [the Motorola foreign affiliates’] injury and an effect on 

U.S. commerce, the direction of causation runs the wrong way.” Lotes, 753 F.3d at 414. 

The failure of the Motorola affiliates’ claims to satisfy the gives-rise-to requirement, 

however, does not imply that no private damages claim could satisfy it. Purchasers of 

cellphones in U.S. import or domestic commerce at inflated prices suffered an injury 

arising out of the price fixing’s effect on that commerce. Damages claims by the first 

purchaser in affected U.S. commerce would “redress domestic antitrust injury that 

foreign anticompetitive conduct has caused,” Empagran, 542 U.S. at 165. 

These purchasers did not purchase directly from the conspirators and thus would 

ordinarily be barred from pursuing a federal damages action by the Illinois Brick 

doctrine. See 431 U.S. at 735. But this Court has observed that the bar to indirect 

purchaser damages claims does not “apply when no purchaser could obtain damages, 

for then there is no risk of double recovery (and no need to calculate elasticities in order 

to apportion damages among multiple tiers).” U.S. Gypsum Co. v. Ind. Gas Co., 350 

F.3d 623, 627 (7th Cir. 2003). In California v. ARC America Corp., the Supreme Court 

emphasized that Illinois Brick “was concerned not merely that direct purchasers have 

sufficient incentive to bring suit under the antitrust laws, . . . but rather that at least 

some party have sufficient incentive to bring suit.” 490 U.S. 93, 102 n.6 (1989). If direct 

purchaser damages claims were barred by Section 6a, allowing damages claims by the 

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23 

first purchaser in affected U.S. commerce would permit “vigorous private enforcement 

of the antitrust laws,” Illinois Brick, 431 U.S. at 745.3 

Although the Supreme Court has been reluctant to “carve out exceptions to the 

[direct purchaser] rule for particular types of markets,” Kansas v. UtiliCorp United, 

Inc., 497 U.S. 199, 216 (1990) (quoting Illinois Brick, 431 U.S. at 744), a holding that it 

does not apply if the Sherman Act itself, through Section 6a, bars recovery by the direct 

purchaser does not risk “litigat[ing] a series of exceptions.” Id. at 217. Nor would it 

“entail the very problems” of proof and line-drawing the direct purchaser rule was 

meant to avoid, id. at 216-17 (quoting Illinois Brick, 431 U.S. at 744-45). 

The government is “primarily charged by Congress with the duty of protecting the 

public interest” under the Sherman Act through criminal prosecutions and actions in 

equity. United States v. Borden Co., 347 U.S. 514, 518 (1954). Public enforcement is all 

the more important when Section 6a bars damages recovery by direct purchasers, in 

whom the “full recovery for the overcharge” is ordinarily concentrated under federal 

antitrust law, Illinois Brick, 431 U.S. at 735. Indeed, absent a construction of the Illinois 

Brick doctrine that permits suit by the first purchaser in affected U.S. commerce, it is 

possible that no one could recover damages under the federal antitrust laws despite the 

tremendous harm in the United States threatened by offshore component price fixing. 

 

3 We are unaware of any cases directly addressing this possibility. “[T]he extent to which 

Illinois Brick applies when any direct purchaser claim would be barred by the FTAIA” is 

apparently an open question. Lotes, 753 F.3d at 413 n.7. It is not clear that this appeal 

provides an opportunity to decide this issue. Motorola’s foreign affiliates are not the first 

purchasers in U.S. commerce. The government takes no position on whether Motorola 

itself is the first purchaser in import or domestic commerce, whether it has made and 

preserved a claim on that basis, or whether it satisfies another Illinois Brick exception. 

See Motorola Br. 40-47. 

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In that case, government enforcement actions would be not only the primary 

enforcement mechanism, they may be essentially the only means to counter 

anticompetitive conduct involving export or wholly foreign commerce that nevertheless 

affects import or domestic commerce. Thus, even if the claims here did not arise from an 

effect on U.S. commerce, this Court should recognize that such an effect can be direct, 

substantial, and reasonably foreseeable. Properly construing the direct effect 

requirement ensures that the U.S. government can protect U.S. commerce and 

consumers. 

CONCLUSION 

This Court should hold that the conspiracy to fix the price of LCD panels had a 

direct, substantial, and reasonably foreseeable effect on U.S. import and domestic 

commerce in cellphones incorporating these panels. 

Respectfully submitted. 

 /s/ Nickolai G. Levin 

September 5, 2014 

MARY E. MCLEOD

Principal Deputy Legal Adviser 

U.S. Department of State 

Washington, D.C. 20520 

KELLY R. WELSH

General Counsel 

U.S. Department of Commerce 

Washington, D.C. 20230 

DAVID C. SHONKA

Acting General Counsel 

MARK S. HEGEDUS

Attorney 

Office of the General Counsel 

Federal Trade Commission 

Washington, D.C. 20580 

WILLIAM J. BAER

Assistant Attorney General 

BRENT SNYDER

Deputy Assistant Attorney General 

KRISTEN C. LIMARZI

JAMES J. FREDRICKS 

NICKOLAI G. LEVIN

Attorneys 

U.S. Department of Justice 

Washington, D.C. 20530-0001 

(202) 514-2886 

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25 

CERTIFICATE OF COMPLIANCE 

This brief complies with the type-volume limitations of Rule 32(a)(7)(B) of the 

Federal Rules of Appellate Procedure because it contains 6,958 words, excluding the 

parts of the brief exempted by Rule 32(a)(7)(B)(iii). This brief complies with the 

typeface requirements of Rule 32(a)(5) of the Federal Rules of Appellate Procedure and 

the type style requirements of Rule 32(a)(6) because this brief has been prepared in a 

proportionally spaced typeface using Microsoft Office Word 2007 with 12-point Georgia 

font in text and the footnotes. 

September 5, 2014 /s/ Nickolai G. Levin 

 Nickolai G. Levin 

 

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26 

CERTIFICATE OF SERVICE 

I, Nickolai G. Levin, hereby certify that on September 5, 2014, I electronically 

filed the foregoing Brief for the United States and the Federal Trade Commission as 

Amici Curiae in Support of Neither Party with the Clerk of the Court of the United States 

Court of Appeals for the Seventh Circuit by using the CM/ECF System. Once the brief is 

accepted for filing by the Clerk’s Office, I will send 3 copies to the Clerk of the Court by 

FedEx. 

I certify that all participants in the case are registered CM/ECF users and that 

service will be accomplished by the CM/ECF system. 

September 5, 2014 /s/ Nickolai G. Levin 

 Nickolai G. Levin 

 

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