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Notes From The Fifth Circuit: Is Light Shining More Favorably On Big Antitrust Judgments?

Highlights

  • According to a recent decision out of the U.S. Court of Appeals for the Fifth Circuit, U.S. antitrust law reaches conduct taking place abroad

  • Large damages awards based on expert testimony may stand, as this case concluded

  • A company unable to pay a large judgment may have to turn itself over to the prevailing party

After the mid-1990s, there was a growing sense amongst the antitrust bar that the Texas Supreme Court and the U.S. Court of Appeals for the Fifth Circuit had become hostile to antitrust cases. Accordingly, many plaintiffs and their counsel with options to sue elsewhere did exactly that.  

But that may be changing. Most recently, in Hewlett-Packard Co. v. Quanta Storage, Inc., the Fifth Circuit affirmed a $438.65 million antitrust judgment.

The judgment arose after Hewlett-Packard (HP) sued Quanta for illegally fixing the prices of optical disk drives. Quanta essentially bet the company, and when it lost it did not pay the judgment.

On appeal, three issues came to the forefront:  

First, because much of the illegal conduct took place outside the United States, there was a question of whether U.S. law could reach the conduct. The Fifth Circuit had little to no trouble determining that because the optical drives were directly imported into the U.S., the action could support a damages award. And although the question was close factually and legally, the court ultimately agreed with the lower court that drives purchased abroad were properly within HP’s damages model because they were incorporated into computers that were shipped to and sold in the U.S.

Second, the District Court found that HP’s damages model was adequately based on sales data, given that HP’s expert excluded purely foreign purchases and sales.  

Third, although the court reversed the trial court’s order to turn over the company on a short deadline, it affirmed the turnover order itself. Not surprisingly, the case quickly settled after the Fifth Circuit ruled.

Whether this case represents a sea change remains to be seen. At a minimum, the case demonstrates that the Fifth Circuit offers no safe harbor for participants in hard-core antitrust conspiracies, particularly involving price-fixing and the like.

© 2020 BARNES & THORNBURG LLPNational Law Review, Volume X, Number 238
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About this Author

Randy Gordon Corporate Lawyer Barnes & Thornburg Law Firm
Partner

Randy Gordon brings a wealth – over 25 years – of complex litigation experience working with public and private companies in more than two dozen industries. He focuses his practice on helping a range of entities with antitrust, RICO, class-action, university-related, securities, and intellectual-property matters.

Randy formerly served as general counsel to a global trade association serving the semiconductor industry and is currently the lead attorney for a major research university in international product liability litigation.

He is executive professor of law at Texas A...

214-258-4148
Kendall Millard, Barnes Thornburg Law Firm, Indianapolis, Corporate and Litigation Law Attorney
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Kendall Millard is a partner in the Indianapolis, Indiana office of Barnes & Thornburg LLP, where he serves as co-chair of the Antitrust and Competition Law Practice Group and is a member of the Litigation and Intellectual Property Departments. His practice focuses on antitrust, class actions and other large, complex commercial litigation. 

317-231-7461
Paul Olszowka Intellectual Property and Litigation Law Attorney Barnes Thornburg Law Firm
Partner

Paul Olszowka is a partner in the Chicago office. He is a member of the firm’s Litigation Department and serves as co-chair of the firm’s Antitrust and Competition Practice Group. He has substantial experience in the following areas.

Antitrust and Commercial Litigation: Mr. Olszowka’s litigation experience includes arbitrations and jury trials in antitrust, patent, and trade secret and unfair competition matters. He has experience with criminal and civil enforcement actions brought by federal and state agencies, class actions,...

312-214-5612
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