It’s not often that Judge Richard Posner of the 7th U.S. Circuit Court of Appeals concedes that he might have been wrong. (Just ask U.S. Supreme Court Justice Antonin Scalia and his “Reading Law” co-author Bryan Garner, who have been engaged in a back-and-forth war of words with Posner since he first harshly criticized their research back in August 2012.)
But it’s also not often that a federal appellate panel suggests that it has a deeper understanding of U.S. foreign economic policy concerns than the Justice Department.
On Tuesday, Posner and two other 7th Circuit judges agreed to reconsider their March 27 decision in Motorola’s antitrust suit against international liquid crystal display screen makers. That’s a relief to both Motorola and the U.S. government; the panel’s opinion, written by Posner, had effectively erased U.S. liability for foreign price-fixing cartels that sell component parts to foreign subsidiaries of U.S. companies — even if the subsidiaries’ purchasing decisions were dictated by the U.S. headquarters and even if the cartel’s products ended up being sold to U.S. consumers.
Posner reasoned that the foreign conduct in those circumstances didn’t directly affect domestic or import commerce, so the alleged price fixing didn’t satisfy the requirements of the Foreign Trade Antitrust Improvements Act amendment to the Sherman Act. “The defendants did not sell in the United States and, if they were overcharging, they were overcharging other foreign manufacturers — the Motorola subsidiaries,” Posner wrote. “The position for which Motorola contends would if adopted enormously increase the global reach of the Sherman Act, creating friction with many foreign countries.”
As you would expect, the ruling prompted Motorola’s lawyers at Goldstein & Russell to petition for an en banc rehearing, arguing that the panel’s decision was contrary to 7th Circuit precedent on the exact same provision of the Sherman Act — and that it would have disastrous consequences not just in private antitrust litigation but also in the U.S. government’s prosecution of international price-fixing conspirators. AU Optronics officials, the en banc petition said, had already cited the panel’s ruling in the 9th Circuit appeal of their convictions for fixing LCD panel prices. And Posner and his panel colleagues (Judges Michael Kanne and Ilana Rovner), Motorola said, had remade U.S. antitrust policy without even consulting the executive branch, since the panel issued its interlocutory opinion based only on the trial judge’s decision and preliminary briefs from Motorola and the defendants.