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) 

____________________ 

SUPPLEMENTAL BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

____________________ 

MARY C. 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 

JOHN F. DALY

Deputy General Counsel for Litigation 

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 

INTRODUCTION ................................................................................................................. 1 

DISCUSSION ....................................................................................................................... 3 

1. Direct Effect Requirement ....................................................................................... 3 

2. “Gives Rise To” Requirement ................................................................................. 11 

CERTIFICATE OF COMPLIANCE .................................................................................... 17 

CERTIFICATE OF SERVICE ............................................................................................ 18

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ii 

TABLE OF AUTHORITIES 

FEDERAL CASES

Empagran S.A. v. F. Hoffmann-LaRoche, Ltd., 417 F.3d 1267 (D.C. Cir. 2005) ............. 15 

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

Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993) .......................................1 

Lotes Co. v. Hon Hai Precision Industries Co., 

 __ F.3d. __, 2014 WL 2487188 (2d Cir. June 4, 2014) ................................................. 5 

Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012) (en banc)............... 2, 4, 7 

Pfeiffer v. Wm. Wrigley Jr. Co., 755 F.2d 554 (7th Cir. 1985) ............................................1 

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

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

United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945) ......................... 3 

FOREIGN CASES AND ADMINISTRATIVE DECISIONS 

Case T‐102/96, Gencor v. Commission [1999] ECR II‐753 ............................................. 9 

Case T-286/09, Intel Corp. v. Commission (Gen. Ct. June 12, 2014) .............................. 9 

European Commission Decision of Dec. 8, 2010, Case COMP 39.309 LCD 

(Liquid Crystal Displays) ........................................................................................... 10 

Japan Fair Trade Commission, Cease-and-Desist Order and Surcharge 

Payment Orders against Manufacturers of Cathode Ray Tubes for 

Televisions, Oct. 7, 2009 .......................................................................................... 7, 9 

Japan Fair Trade Commission, Cease and Desist Order and Surcharge 

Payment Orders against Marine Hose Manufacturers, Feb. 22, 2008 ....................... 7 

FEDERAL STATUTES 

15 U.S.C.: 

§ 1 note...... .......................................................................................................................... 13 

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

Antitrust Criminal Penalty Enhancement and Reform Act of 2004 § 213, 

Pub. L. No. 108–237, 118 Stat. 661 .............................................................................. 13 

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iii 

FOREIGN STATUTES 

Korea, Monopoly Regulation and Fair Trade Law art. 2-2 ................................................ 8 

MISCELLANEOUS 

1B Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law (4th ed. 2013) ..................... 6 

Statement of James R. Atwood, in Foreign Trade Antitrust Improvements 

Act, Hearings on H.R. 2326 Before the Subcomm. on Monopolies and 

Commercial Law of the H. Comm. on the Judiciary, 97th Cong. 86 

(1981) ........................................................................................................................ 5, 6 

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

Enforcement, 67 Antitrust L.J. 159 (1999) ................................................................ 10 

Scott D. Hammond, Deputy Assistant Attorney General, Antitrust 

Division, U.S. Department of Justice, The Evolution of Criminal 

Antitrust Enforcement Over the Last Two Decades (Feb. 25, 2010) ......................... 13 

H.R. Rep. No. 97-686 (1982), reprinted in 1982 U.S.C.C.A.N. 2487....................... 5, 11, 15 

Joseph Seon Hur, Extraterritorial Application of Korean Competition 

Law, 6 Regent J. Int’l L. 171 (2008) ......................................................................... 8, 9 

ICN Working Group on Cartels, Building Blocks for Effective Anti-Cartel 

Regimes (2005) ............................................................................................................ 6 

Kyung-Min Koh & Jung-Won Hyun, Competition Law in the Republic of 

Korea (2011) ................................................................................................................. 8 

OECD, Hard Core Cartels: Third Report on the Implementation of the 

1998 Council Recommendation (2005) .................................................................. 6, 13 

OECD, Recommendation of the Council Concerning Effective Action 

Against Hard Core Cartels (1998) ............................................................................... 6 

2012 Report on the WTO Consistency of Trade Policies by Major Trading 

Partners ....................................................................................................................... 7 

U.S. Department of Justice & Federal Trade Commission, Antitrust 

Enforcement Guidelines for International Operations (1995) ................................ 10 

Florian Wagner-von Papp, Competition Law and Extraterritoriality, in 

Research Handbook on International Competition Law 21 (Ariel 

Ezrachi ed. 2012) .......................................................................................................... 8 

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INTRODUCTION 

On June 2, 2014, this Court requested that the United States share its views 

“concerning the potential impact on U.S. foreign commercial relations, and on U.S. 

foreign relations more generally, of deciding the present appeal one way or another” and 

regarding “the concerns expressed by [] foreign governments” in amicus curiae briefs. 

This supplemental amicus brief has been authorized by the Solicitor General and is filed 

on behalf of the United States in response to the Court’s request. 

Any extraterritorial application of U.S. law creates the potential for some friction 

with foreign nations, and the “fear of outright collisions between domestic and foreign 

law” animates the presumption against the extraterritorial application of federal 

statutes. Pfeiffer v. Wm. Wrigley Jr. Co., 755 F.2d 554, 557 (7th Cir. 1985). But that 

presumption has been overcome with respect to the Sherman Act, and it is “well 

established” that the Act applies 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); see also id. at 814. 

In enacting the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA), 15 

U.S.C. § 6a, Congress reaffirmed the Sherman Act’s application to conduct involving 

foreign commerce—including wholly foreign commerce. By making such conduct 

subject to the Sherman Act only under certain conditions, Congress also struck a 

balance that protects our country’s commerce and consumers against substantial 

anticompetitive harm, even when it has foreign origins, while avoiding unreasonable 

interference with the regulation of foreign markets by other countries. As the Supreme 

Court has explained, while “[n]o one denies that America’s antitrust laws, when applied 

to foreign conduct, can interfere with a foreign nation’s ability independently to regulate 

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2 

its own commercial affairs,” courts have “long held that 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.” F. 

Hoffmann-LaRoche Ltd. v. Empagran S.A., 542 U.S. 155, 165 (2004). 

Section 6a guards against unreasonable interference by “lay[ing] down a general 

rule placing all (nonimport) activity involving foreign commerce outside the Sherman 

Act’s reach,”1 and then “bring[ing] such conduct back within the Sherman Act’s reach” 

only when the two requirements of the section’s effects exception are met. Id. at 162. 

First, the conduct must have a “direct, substantial, and reasonably foreseeable effect” on 

American domestic, import, or (certain) export commerce. 15 U.S.C. § 6a(1). Second, the 

“effect” must “giv[e] rise to a [Sherman Act] claim.” Id. § 6a(2). Section 6a thus makes 

the Sherman Act inapplicable to conduct involving non-import foreign commerce whose 

effect on the United States is highly attenuated, insignificant, or unpredictable and 

separately limits the class of claims and plaintiffs that may recover for injuries 

depending on the connection between those injuries and the requisite U.S. effect. 

In this case, the Japanese Ministry of Economy, Trade and Industry (METI), the 

Ministry of Economic Affairs for the Republic of China, Taiwan (MEA), and the Korea 

Fair Trade Commission (KFTC) submitted their views, expressing opposition to 

unreasonably expansive extraterritorial application of U.S. antitrust law. See METI Br. 2 

(METI “strongly opposes assertion of extraterritorial jurisdiction that would 

 

1 Conduct involving U.S. domestic commerce and U.S. import commerce is “subject to 

the Sherman Act’s general requirements for effects on commerce, not to the special 

requirements spelled out in the FTAIA.” Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 

845, 854 (7th Cir. 2012) (en banc). 

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unreasonably interfere with sovereign authority and violate fundamental principles of 

international law”);2 MEA Letter 1 (“unduly expansive extraterritorial application of 

U.S. law would undermine principles of international comity”); KFTC Br. 1 (“unduly 

expansive application of the U.S. antitrust laws, if adopted by this Court, could create 

conflicts with the sovereignty of other countries including Korea”). But none of these 

submissions explains how application of U.S. antitrust law to a conspiracy to fix prices 

for LCD panels, which “doubtless” had an effect on the price of panel-incorporating 

cellphones sold in the United States, Op. 4, is unreasonably expansive. And none 

explains why allowing Motorola to recover damages for overcharges it paid on panels 

incorporated into such cellphones could not reasonably redress that domestic injury. 

As explained below, the panel decision is broader than necessary to preserve the 

balance Congress struck in Section 6a and to avoid harm to U.S. foreign relations. 

DISCUSSION 

1. Direct Effect Requirement. The direct effect requirement helps ensure that the 

Sherman Act is not used to police anticompetitive conduct whose impact, as a practical 

matter, is limited to foreign markets and, thus, is best addressed by foreign nations. As 

Judge Learned Hand observed, “[w]e should not impute to Congress an intent to punish 

all whom its courts can catch, for conduct which has no consequences within the United 

States.” United States v. Aluminum Co. of Am., 148 F.2d 416, 443 (2d Cir. 1945). 

The panel’s view of what constitutes a direct effect is not necessary to avoid 

unreasonable interference with the regulation of foreign markets by foreign 

 

2 The METI submission appended briefs filed by the Government of Japan in 

Empagran, which involved claims by foreign plaintiffs in a quite different factual 

context from this case, see infra p. 14.

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jurisdictions. The panel decision suggests that defendants’ conduct could not possibly 

have a direct effect on U.S. commerce because, with respect to the Category II panels, 

those panels were not sold directly “to U.S. customers.” Op. 4-5 (emphasis omitted). But 

if the effects exception were so limited it would reach only conduct that involves import 

commerce and is, thus, excluded from Section 6a’s limitations entirely. See US-FTC Am. 

Br. 8; cf. Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845, 857 (7th Cir. 2012) (en banc) 

(“To demand a foreseeable, substantial, and ‘immediate’ consequence on import or 

domestic commerce comes close to ignoring the fact that straightforward import 

commerce has already been excluded from the FTAIA’s coverage.”). 

The Korea Fair Trade Commission contends that allowing Motorola’s claims “could 

create conflicts with the sovereignty of other countries including Korea and could 

interfere with their antitrust enforcement.” KFTC Br. 1. The Commission’s premise, 

however, is that Motorola’s claims “aris[e] out of transactions” that “took place outside 

the United States and had no direct effect on U.S. commerce,” a contention that 

apparently rests solely on the fact that the transactions were wholly foreign. Id. at 2. But 

if the transactions were not wholly foreign—that is, if they involved U.S. import or 

domestic commerce—then Section 6a’s import commerce exclusion would apply, leaving 

no role for Section 6a’s effects exception. See supra n.1. 

The Korea Fair Trade Commission also contends that applying the Sherman Act 

here would extend its application “to any intermediary product produced or purchased 

outside the United States, so long as it is eventually incorporated into an end product 

sold in the United States.” KFTC Br. 3. But there is no reason to believe that would be 

the consequence of finding a direct effect on U.S. commerce in the particular 

circumstances here or in many other cases. Anticompetitive conduct involving 

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intermediate products in wholly foreign commerce often has no practical effect on U.S. 

commerce, in which case the Sherman Act would not apply. Nevertheless, there can be a 

close, significant, and predictable causal connection between fixing the price of a major 

component made and sold outside the United States and U.S. commerce in finished 

products incorporating that component. See US-FTC Am. Br. 8-11. As the Second Circuit 

recently explained, “antitrust law has long recognized that anticompetitive injuries can 

be transmitted through multi-layered supply chains.” Lotes Co. v. Hon Hai Precision 

Indus. Co., __ F.3d. __, 2014 WL 2487188, at *15 (2d Cir. June 4, 2014). “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 and indirect.” Id.

While the panel was concerned that adopting Motorola’s position would create 

“friction with many foreign countries,” Op. 8, Congress was aware of the potential for 

friction when considering the FTAIA bill, but concluded that the “bill is not intended to 

restrict the application of American laws to extraterritorial conduct where the requisite 

effects exist.” H.R. Rep. No. 97-686, at 13 (1982) (citing Statement of James R. Atwood 

at n.7), reprinted in 1982 U.S.C.C.A.N. 2487, 2495.3 

 

3 In the cited footnote, James Atwood, a former Deputy Assistant Secretary and Deputy 

Legal Adviser in the U.S. Department of State, made “clear that [he was] not suggesting 

that the United States abandon its controversial practice, frequently protested by other 

nations, of enforcing U.S. antitrust against extraterritorial conduct that has adverse 

effects within the United States.” Foreign Trade Antitrust Improvements Act, Hearings 

on H.R. 2326 Before the Subcomm. on Monopolies and Commercial Law of the H. 

Comm. on the Judiciary, 97th Cong. 86, 92 (1981). He explained that “[w]hile this 

enforcement practice has generated most of the international friction associated with 

U.S. antitrust, it is simply too important from the standpoint of American interests to 

abandon wholesale.” Id. “Moreover,” he continued presciently, “it should continue to 

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In any event, the panel’s concern over international friction is unwarranted because 

the panel’s view of the direct effect requirement is not necessary to avoid harm to the 

United States’ general or commercial relations with foreign jurisdictions. Here, the 

price-fixing conduct is condemned by both domestic and foreign laws. Indeed, a global 

effort against hard core cartels, like the LCD price-fixing cartel, has emerged, partly due 

to the work of the Organisation for Economic Co-operation and Development (OECD) 

and the International Competition Network (ICN). The ICN is a consensus-based 

collaboration of over 130 national competition agencies, including the Japan Fair Trade 

Commission, the Korea Fair Trade Commission, the Taiwan Fair Trade Commission, the 

Federal Trade Commission, and the U.S. Department of Justice. The ICN working group 

devoted to cartels has observed that cartels are “a direct assault on the principles of 

competition,” that they are “universally recognized as the most harmful of all types of 

anticompetitive conduct,” and that “the prohibition against cartels is now an almost 

universal component of competition laws.” ICN Working Group on Cartels, Building 

Blocks for Effective Anti-Cartel Regimes 5 (2005), available at www.international

competitionnetwork.org/uploads/library/doc346.pdf.4 

A conspiracy to fix the price of products predominantly exported “transfers wealth 

away from the territory containing the buyers and toward the territory containing the 

sellers.” 1B Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 272j, at 348 (4th 

 

gain greater international acceptance as foreign antitrust laws develop and as American 

courts and prosecutors give increased weight to comity considerations.” Id.

4 See also OECD, Recommendation of the Council Concerning Effective Action Against 

Hard Core Cartels (1998), available at http://www.oecd.org/daf/competition/

2350130.pdf; OECD, Hard Core Cartels: Third Report on the Implementation of the 

1998 Council Recommendation 7-8 (2005) (“2005 OECD Cartel Report”), available at

http://www.oecd.org/competition/cartels/35863307.pdf. 

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ed. 2013). Thus, as this Court noted in Minn-Chem, the price fixers’ host countries 

“often have no incentive” to enforce their antitrust laws and “would logically be pleased 

to reap economic rents from other countries.” 683 F.3d at 860. If a country cannot 

redress injury to its consumers from foreign cartels, that victimization of its consumers 

could become a source of tension with the countries of conspiring sellers. 

It is not surprising then that the extraterritorial application of antitrust laws on the 

basis of effects on a country’s own commerce is now accepted by many jurisdictions 

around the world.5 For example, the Japan Fair Trade Commission has taken action 

recently against cartel members not operating in Japan but whose conduct had an effect 

in Japan. See Japan Fair Trade Comm’n, Cease-and-Desist Order and Surcharge 

Payment Orders against Manufacturers of Cathode Ray Tubes for Televisions, Oct. 7, 

2009, available at http://www.jftc.go.jp/en/pressreleases/yearly-2009/oct/individual000037.files/2009-Oct-7.pdf; Japan Fair Trade Comm’n, Cease and Desist Order and 

Surcharge Payment Orders against Marine Hose Manufacturers, Feb. 22, 2008, 

available at http://www.jftc.go.jp/en/pressreleases/yearly-2008/feb/individual_

000147.files/2008-Feb-22.pdf. The Japanese Ministry of Economy, Trade and Industry, 

which filed an amicus brief in this case, has recognized elsewhere that “competition laws 

can be applied extraterritorially only in cases where actions taken outside a country have 

a direct and substantial impact on competition in the domestic markets.” 2012 Report 

 

5 Cf. United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 960 n.1 (7th Cir. 2003) 

(en banc) (Wood, J., dissenting) (noting that, as of 2003, “over 90 countries have 

competition laws” and “the number of disputes over so-called extraterritorial 

application of national laws, whether by the United States, the European Union, or 

others, has dropped dramatically”). 

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on the WTO Consistency of Trade Policies by Major Trading Partners 639, available at

http://www.meti.go.jp/english/report/downloadfiles/2013WTO/02_14_reference.pdf.6 

Similarly, Korea’s antitrust law has been amended to provide that it “shall apply to 

any extraterritorial conduct when it affects domestic market.” Monopoly Regulation and 

Fair Trade Law art. 2-2, as translated at http://eng.ftc.go.kr/bbs.do?command=getList

&type_cd=62&pageId=0401; see also Kyung-Min Koh & Jung-Won Hyun, Competition 

Law in the Republic of Korea 29 (2011). A former Secretary-General of the Korean Fair 

Trade Commission noted that this provision “reflects the effects doctrine currently 

adopted by many countries.” Joseph Seon Hur, Extraterritorial Application of Korean 

Competition Law, 6 Regent J. Int’l L. 171, 174 (2008) (footnote omitted); see also 

Florian Wagner-von Papp, Competition Law and Extraterritoriality, in Research 

Handbook on International Competition Law 21, 57 (Ariel Ezrachi ed. 2012) 

(“extraterritorial application of antitrust laws on the basis of the effects doctrine is by 

now widely accepted”). 

The Korea Fair Trade Commission asserts in its amicus brief that “[u]nder 

prevailing international norms, claims should be brought in a country in which the 

underlying transactions took place and should be governed by the laws of that country.” 

KFTC Br. 3. Yet even before the Korean law was amended, the Commission found 

international norms no obstacle to fining German, Japanese, and American graphite 

 

6 In this report, METI criticized the extraterritorial application of U.S. antitrust law 

when the only direct and substantial effect on U.S. commerce is on U.S. exporters and 

U.S. consumers are unaffected. 2012 Report at 639-40. This criticism implicates Section 

6a(1)(B), which includes in the FTAIA’s effects exception conduct affecting the “export 

trade or export commerce with foreign nations, of a person engaged in such trade or 

commerce in the United States,” but which is not at issue in this case. 

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electrode producers for cartel activity outside Korea that adversely affected Korean 

commerce. See Hur, supra, at 184-86. 

The practice and views of other jurisdictions also undermine the Korean 

Commission’s assertion. For instance, the European Union finds the application of its 

antitrust laws to conduct involving sales outside Europe “justified under public 

international law” when that conduct has an “immediate, substantial, and foreseeable 

effect” in Europe. Case T-286/09, Intel Corp. v. Comm’n ¶¶ 231, 233-36, 243-44, 

http://curia.europa.eu/juris/document/document.jsf?text=&docid=153543&pageIndex

=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=340077 (Gen. Ct. June 12, 

2014) (citing Case T‐102/96 Gencor v. Comm’n [1999] ECR II‐753 ¶ 90). Accordingly, a 

European court recently rejected Intel’s argument that its conduct concerning sales of 

computer central processing units (CPUs) to two computer manufacturers, Acer and 

Lenovo, was beyond the European Commission’s jurisdiction because Intel sold the 

CPUs in Asia, where they were incorporated into Acer and Lenovo computers, and sales 

of those computers in Europe were carried out by Acer and Lenovo, which were not 

controlled by Intel. Id. ¶¶ 226-27, 254-82, 292-96. The conduct had the requisite effect 

to justify application of European Union law. Id. ¶¶ 259-82, 292-96. “Contrary to” 

Intel’s arguments, “the fact that Intel did not sell CPUs to Acer in [Europe] does not 

mean that the effect in [Europe] of Intel’s conduct could only have been indirect.” Id. 

¶ 279; see also ¶ 293 (“The fact that Intel sells CPUs, whilst Lenovo sells computers, 

does not mean that the effect can be only indirect.”).7

 

7 See also, e.g., Japan Fair Trade Comm’n, Cease-and-Desist Order and Surcharge 

Payment Orders against Manufacturers of Cathode Ray Tubes for Televisions, Oct. 7, 

2009 ¶ 2 (fining Japanese, Korean, Malaysian, Indonesian, and Thai companies for 

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In light of the widespread antitrust law and practice in foreign jurisdictions, as well 

as the effects exception’s “gives rise to” requirement limiting redress to claims arising 

out of the effect on U.S. domestic and import commerce, a decision holding that 

defendants’ LCD price-fixing conspiracy had a direct effect on that commerce should not 

adversely impact U.S. foreign relations, including foreign commercial relations. Indeed, 

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

price of LCD panels manufactured abroad, based in part on effects of that price fixing on 

import commerce in products incorporating those LCD panels. As explained in the May 

19, 2014 letter from the Solicitor General, we are not aware of any instance in which a 

foreign government has expressed disapproval of those prosecutions to any official of 

the United States, despite regular consultations between officials of the U.S. antitrust 

agencies and their foreign counterparts. The United States carefully considers 

international comity and exercises prudence before bringing any antitrust enforcement 

actions that might implicate the interests of a foreign jurisdiction. See Empagran, 542 

U.S. at 171 (citing Joseph P. Griffin, Extraterritoriality in U.S. and EU Antitrust 

Enforcement, 67 Antitrust L.J. 159, 194 (1999)); U.S. Dep’t of Justice & Fed. Trade 

Comm’n, Antitrust Enforcement Guidelines for International Operations § 3.2 (1995) 

(outlining comity factors the agencies consider before bringing an antitrust action); see 

also id. at § 2.92. 

 

fixing the price of cathode ray tubes incorporated into televisions outside Japan), 

available at http://www.jftc.go.jp/en/pressreleases/yearly-2009/oct/individual000037.files/2009-Oct-7.pdf; European Commission Decision of Dec. 8, 2010, Case 

COMP 39.309 LCD (Liquid Crystal Displays) ¶¶ 380-81 (finding the authority to 

impose fines based on LCD panels sold outside Europe and incorporated into finished 

products sold in Europe by third parties but declining to exercise that authority because 

it was not necessary to achieve sufficient deterrence), available at http://ec.europa.eu/

competition/antitrust/cases/dec_docs/39309/39309_3643_4.pdf.

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2. “Gives Rise To” Requirement. Even when conduct involving wholly foreign 

commerce has the requisite effect on U.S. commerce, a plaintiff also must show that the 

effect on U.S. commerce “gives rise to” the claim at issue. 15 U.S.C. § 6a(2); Empagran, 

542 U.S. at 174-75. This requirement serves two functions. It ensures that the effect on 

U.S. commerce is “an adverse (as opposed to a beneficial) effect.” Empagran, 542 U.S. 

at 174 (citing H.R. Rep. No. 97-686, at 11, reprinted in 1982 U.S.C.C.A.N. 2487, 2496). It 

also ensures that the plaintiff’s injury is sufficiently related to that domestic effect so 

that its redress furthers “the FTAIA’s basic intent” consistent with considerations of 

“comity and history.” Id. 

The way this requirement limits private plaintiffs’ damages claims has garnered 

significant attention from foreign governments. For example, it was the focus of the 

Brief of the Government of Japan in Empagran, which the Japanese Ministry of 

Economy, Trade and Industry resubmitted to the district court in this case. There, Japan 

expressed its concern that Japanese companies not be subject to claims by “private 

foreign plaintiffs who purchased vitamins from Petitioners only in foreign markets and 

are now seeking treble damages in private lawsuits filed in United States” for such 

foreign purchases. Brief of the Government of Japan in Support of Petitioners at 1, F. 

Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004) (No. 03-724); see id. 

at 8-9; Brief for Government of Federal Republic of Germany and Belgium As Amici 

Curiae Supporting Petitioners at 2-3, F. Hoffmann-La Roche Ltd. v. Empagran S.A., 

542 U.S. 155 (2004) (No. 03-724) (observing that “[o]ther nations share common 

ground with the United States in applying the effects doctrine,” but also setting forth 

Germany’s and Belgium’s interest “in seeing that German [and Belgian] companies are 

not subject to the extraterritorial reach of the United States’ antitrust laws by private 

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foreign plaintiffs—whose injuries were sustained in transactions entirely outside United 

States commerce—seeking treble damages in private lawsuits against German [and 

Belgian] companies”), available at 2004 WL 226388 (Feb. 3, 2004). 

The United States took the view in Empagran that allowing foreign plaintiffs to seek 

damages for independently caused foreign harm would “open United States courts to 

suits that are strikingly localized to foreign countries”—a result “Congress could not 

have intended.” Brief for the United States as Amicus Curiae Supporting Petitioners at 

12, F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004) (No. 03-724), 

available at http://www.justice.gov/osg/briefs/2003/3mer/1ami/2003-0724.mer.

ami.pdf. 

The Supreme Court agreed that “Congress would not have intended the FTAIA’s 

exception to bring independently caused foreign injury within the Sherman Act’s reach.” 

Empagran, 542 U.S. at 173. No case prior to the FTAIA had applied the Sherman Act to 

allow foreign plaintiffs to recover for “foreign injury” caused by “foreign anticompetitive 

conduct” producing both “an adverse domestic effect” and “an independent foreign 

effect giving rise to the claim.” Id. at 158-59. And the FTAIA did not expand the 

Sherman Act’s reach. Id. at 169-73. Consistent with the pre-FTAIA understanding that 

the antitrust laws “redress domestic antitrust injury that foreign anticompetitive 

conduct has caused,” and with “principles of prescriptive comity,” the Court explained, 

the term “gives rise to a claim” must mean gives rise to “the ‘plaintiff’s claim’ or ‘the 

claim at issue.’” Id. at 165, 169, 173-75. 

In its Empagran brief, the United States also expressed its concern that allowing 

foreign plaintiffs to recover for independently caused foreign injury would harm its 

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13 

leniency program and thus not help protect U.S. consumers.8 While the potential 

liability for treble damages would greatly expand, overall deterrence would be 

undermined because price fixers would be discouraged from applying to the leniency 

program and thus from exposing cartels in the first place. U.S. Empagran Br. 5, 21. 

Here, the Korea Fair Trade Commission also expresses a concern about its own 

leniency program, contending that, under Motorola’s expansive view of the U.S. 

antitrust laws, companies would be discouraged from applying to the KFTC leniency 

program because it would “result in a greater likelihood of facing private antitrust 

damages actions in the United States.” KFTC Br. 4. The Commission’s concern appears 

based on the prospect of a U.S. treble damages remedy—not on the potential for any 

damages, and it acknowledges its own damages remedy, KFTC Br. 3. But a qualifying 

leniency applicant in the United States only faces single damages based on the 

applicant’s own affected commerce. Antitrust Criminal Penalty Enhancement and 

Reform Act of 2004 § 213, Pub. L. No. 108–237, 118 Stat. 661, 666-67 (codified as 

amended at 15 U.S.C. § 1 note). 

If the Commission’s concern is premised on U.S. courts adjudicating “treble 

damages actions arising out of transactions that occur wholly in foreign countries and 

that have no meaningful connection to the United States,” U.S. Empagran Br. 21, that is 

 

8 To help enforce their laws against price fixing, the competition authorities of over fifty 

countries now have programs that offer leniency to the first member of a price-fixing 

conspiracy that reports the conspiracy and cooperates against its co-conspirators; 

simultaneous leniency applications to multiple competition authorities are increasingly 

common. See Scott D. Hammond, Deputy Assistant Attorney General, Antitrust 

Division, U.S. Dep’t of Justice, The Evolution of Criminal Antitrust Enforcement Over 

the Last Two Decades 1-5 (Feb. 25, 2010), available at http://www.justice.gov/atr/

public/speeches/255515.pdf; 2005 OECD Cartel Report, supra n.4, at 9-11, 33. 

Case: 14-8003 Document: 57 Filed: 06/27/2014 Pages: 22
14 

a valid concern—one the United States expressed in Empagran, see id. at 19-21. By 

contrast, to the extent the Commission’s concern is premised on its program being 

undermined by the redress in U.S. courts of injury arising from U.S. effects, that 

premise would not provide a basis to change the balance struck by Congress in Section 

6a. Moreover, in the United States’ experience, the damages exposure price fixers face 

from claims with the requisite U.S. connection has not discouraged them from seeking 

leniency. If Motorola’s claims have the requisite connection to U.S. effects, then U.S. law 

can be applied without undermining foreign leniency programs. 

Some of Motorola’s claims resemble the failed claims in Empagran, but others do 

not. Empagran involved “vitamin sellers around the world that agreed to fix prices, 

leading to higher vitamin prices in the United States and independently leading to 

higher vitamin prices in other countries.” 542 U.S. at 159. Even though the conspiracy 

had an “adverse domestic effect” on domestic commerce and import commerce in 

vitamins, foreign purchasers could not recover for their independently caused foreign 

harm. Id. at 175. Motorola’s claims based on purchases of LCD panels that never entered 

the United States, the so-called Category III claims, closely resemble the foreign 

purchasers’ claims in Empagran because, in both cases, the product never entered the 

United States and any effect on U.S. commerce of the price fixing would likely be 

independent of those purchases. 

Motorola’s claims based on purchases of LCD panels that were incorporated into 

cellphones imported to and sold in United States, the so-called Category II claims, are 

quite different from the claims in Empagran. Contrary to defendants’ suggestion, Resp. 

to Rehearing Pet. 5, Empagran does not require that a plaintiff suffer its injury in the 

United States. As the D.C. Circuit explained on remand in Empagran, that proposition 

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15 

“has no support from the text of the statute” and is dispelled by the legislative history, 

which provides that the effects exception “‘does not exclude all persons injured abroad 

from recovering under the antitrust laws of the United States.’” Empagran S.A. v. F. 

Hoffmann-LaRoche, Ltd., 417 F.3d 1267, 1269 (D.C. Cir. 2005) (quoting H.R. Rep. No. 

97-686, at 10). 

Instead, the Supreme Court directed lower courts to distinguish claims arising from 

independent foreign injury—which are barred by the FTAIA—from claims sufficiently 

linked to the anticompetitive conduct’s effects on U.S. commerce. Empagran, 542 U.S. 

at 175. In the proceedings on remand, Japan and other foreign governments 

acknowledged that the Supreme Court had “left open” the possibility that foreign 

plaintiffs could bring claims for foreign injury “in a narrow set of cases” in which those 

injuries were “‘inextricably bound up with . . . domestic restraints of trade’ and the 

plaintiff ‘was injured . . . by reason of an alleged restraint of our domestic trade.’” Brief 

of the Federal Republic of Germany et al. as Amici Curiae in Support of DefendantsAppellees at 7, Empagran S.A. v. F. Hoffmann-LaRoche, Ltd., 417 F.3d 1267 (D.C. Cir. 

2005) (No. 01-7115). 

Because the panel mistakenly believed that “the effect in the United States of the 

price fixing [in this case] could not give rise to an antitrust claim” by anyone for any 

reason, Op. 6, it never addressed whether Motorola’s injuries were sufficiently 

intertwined with the effect on U.S. commerce to satisfy the “gives rise to” requirement. 

If Motorola is able to establish the necessary link between its injuries and the pricefixing conspiracy’s effect on U.S. commerce in cellphones, a decision by this Court 

allowing Motorola to pursue its Category II claims in the United States would maintain 

the balance Congress struck in Section 6a to preserve effective antitrust enforcement 

Case: 14-8003 Document: 57 Filed: 06/27/2014 Pages: 22
16 

while avoiding unreasonable interference with the regulation of foreign markets by 

other countries. 

Respectfully submitted. 

 /s/ Nickolai G. Levin 

June 27, 2014 

MARY C. 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 

JOHN F. DALY

Deputy General Counsel for Litigation 

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 

Case: 14-8003 Document: 57 Filed: 06/27/2014 Pages: 22
17 

CERTIFICATE OF COMPLIANCE 

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. 

June 27, 2014 /s/ Nickolai G. Levin 

 Nickolai G. Levin 

 

Case: 14-8003 Document: 57 Filed: 06/27/2014 Pages: 22
18 

CERTIFICATE OF SERVICE 

I, Nickolai G. Levin, hereby certify that on June 27, 2014, I electronically filed the 

foregoing Supplemental Brief for the United States as Amicus Curiae 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 30 

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. 

June 27, 2014 /s/ Nickolai G. Levin 

 Nickolai G. Levin 

 

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