It appears that Motorola’s US court case against several Asian suppliers for alleged price fixing is coming unstuck.
A US appeals court appeared sceptical of mobile phone maker Motorola Mobility’s attempt to sue AU Optronics, Chunghwa Picture Tubes, HannStar Display, LG Display, Samsung, Samsung, Panasonic, Sanyo, Sharp and Toshiba.
A three judge panel of the 7th US Circuit Court of Appeals questioned whether the allegations had enough connection to the United States to be heard in US courts.
Motorola Mobility is now a unit of China’s Lenovo Group, but it sued the suppliers in Chicago federal court in 2009, saying some of its subsidiaries had overpaid for liquid crystal display screens because of a conspiracy in Asia. Some screens entered the US market, the lawsuit said.
Judge Richard Posner, a member of the appeals panel, pointed out that Motorola treated the foreign subsidiaries as separate for tax reasons, but for antitrust purposes, they are seen as part of Motorola.
Motorola Mobility lawyer Thomas Goldstein said the company should be able to sue under US law because a former Chicago-based parent negotiated its supply contracts.
Lenovo bought Motorola Mobility in October for $2.91 billion from Google which had bought it in 2012. Motorola Mobility says it paid the LCD makers more than $5 billion from 1996 to 2006.
The appeals court ruled against Motorola Mobility in March but agreed to hear the case again after the Obama administration said the ruling threatened its ability to prosecute global price fixing.
The US Justice Department, whose investigation of global LCD price-fixing led to more than $1.3 billion in criminal fines, asked the court to find that the conspiracy directly affected US commerce.
Belgium and Japan filed briefs criticising the reach of US antitrust law and urging the court to rule for the suppliers.
