Japanese Electronic Products Antitrust Litigation, In re

• Decision Date: 07 July 1980
• Docket Number: No. 79-2540,79-2540
• Citation: 631 F.2d 1069
• Parties: 1980-2 Trade Cases 63,421 In re JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.; Matsushita Electronics Corp.; Toshiba Corp.; Sharp Corp.; Sony Corp.; Matsushita Electric Trading Co., Ltd.; Mitsubishi Corp.; Matsushita Electric Corp. of America; Quasar Electronics Corp.; Toshiba America, Inc.; Sharp Electronics Corp.; Mitsubishi International Corp.; Sony Corp. of America; and Motorola, Inc., Appellants, v. ZENITH RADIO CORP. and National Union Electric Corp., Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 1069

631 F.2d 1069

1980-2 Trade Cases 63,421

In re JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.; Matsushita Electronics Corp.; Toshiba Corp.; Sharp Corp.; Sony Corp. Matsushita Electric Trading Co., Ltd.; Mitsubishi Corp. Matsushita Electric Corp. of America; Quasar Electronics Corp.; Toshiba America, Inc.; Sharp Electronics Corp. Mitsubishi International Corp.; Sony Corp. of America; and Motorola, Inc., Appellants, v. ZENITH RADIO CORP. and National Union Electric Corp., Appellees.

No. 79-2540.

United States Court of Appeals, Third Circuit.

Argued Feb. 14, 1980.

Decided July 7, 1980.

Donald J. Zoeller (argued), John P. Hederman, Thomas P. Lynch, Robert A. Jaffe, Paul J. Green, Mudge, Rose, Guthrie & Alexander, New York City, Patrick T. Ryan, Drinker, Biddle & Reath, Philadelphia, Pa., for Toshiba Corp. and Toshiba America, Inc.

Joel B. Harris (argued), Ira M. Millstein, H. Adam Prussin, Weil, Gotshal & Manges, New York City, Miles W. Kirkpatrick, Morgan, Lewis & Bockius, Philadelphia, Pa., for Matsushita Electric Industrial Co., Ltd., Matsushita Electronics Corp., Matsushita Electric Trading Co., Matsushita Electric Corporation of America, and Quasar Electronics Corp.

Charles F. Schirmeister, Reid & Priest, New York City, Thomas N. O'Neill, Jr., Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa., for Mitsubishi Corp. and Mitsubishi International Corp.

Peter J. Gartland, Wender, Murase & White, New York City, Matthew J. Broderick, Dechert, Price & Rhoads, Philadelphia, Pa., for Sharp Corp. and Sharp Electronics Corp.

Thomas P. Coffey (argued), Kirkland & Ellis, Chicago, Ill., Walter R. Milbourne, Obermeyer, Rebmann, Maxwell & Hippel, Philadelphia, Pa., for Motorola, Inc.

Asa D. Sokolow (argued), Renee J. Roberts, Marc Rowin, Melanie B. Brimmer, Rosenman, Colin, Freund, Lewis & Cohen, New York City, Franklin Poul, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for Sony Corp. and Sony Corp. of America.

Edwin P. Rowe (argued), William H. Roberts, Blank, Rome, Comisky & McCauley, Philadelphia, Pa., Philip J. Curtis, John Borst, Jr., Zenith Radio Corp., Glenview, Ill., Morton P. Rome, National Union Electric Corp., Philadelphia, Pa., for appellees.

James S. Campbell (argued), Andrew N. Vollmer, Wilmer & Pickering, Washington, D. C., Nicholas de B. Katzenbach, Armonk, N. Y., for amicus curiae International Business Machines Corp.

Charles J. Bloom, Pepper, Hamilton & Scheetz, Philadelphia, Pa., for amicus curiae Hitachi, Ltd., Hitachi Kaden Hanbai Kabushiki Kaishi, Hitachi Sales Corp. of America, Sanyo Electric Co., Ltd., Sanyo Electric Trading Co., Ltd., Sanyo Electric Inc., and Sanyo Manufacturing Corp.

Carl W. Schwarz, Metzger, Shadyac & Schwarz, Washington, D. C., Lawrence R. Walders, Tanaka, Walders & Ritger, Washington, D. C., for amicus curiae Hitachi, Ltd., Hitachi Kaden Hanbai Kabushiki Kaishi, Hitachi Sales Corp. of America.

Dugald C. Brown, Whitman & Ransom, New York City, for amicus curiae Sanyo Electric Co., Ltd., Sanyo Electric Trading Co., Ltd., Sanyo Electric Inc., and Sanyo Manufacturing Corp.

Louis A. Lehr, Jr., Arnstein, Gluck, Weitzenfeld & Minow, Chicago, Ill., Harry A. Short, Jr., Liebert, Short, Fitzpatrick & Lavin, Philadelphia, Pa., for amicus curiae Sears, Roebuck & Co.

Before SEITZ, Chief Judge, and MARIS and GIBBONS, Circuit Judges.

OPINION OF THE COURT

SEITZ, Chief Judge.

This certified interlocutory appeal from a pretrial order of the district court raises an issue that currently is the subject of much debate: In an action for treble damages under the antitrust and antidumping laws, do the parties have a right to trial by jury without regard to the practical ability of a jury to decide the case properly?

I.

This litigation began in the District of New Jersey with the complaint of National Union Electric Corp. (NUE). A corporate successor to the Emerson Radio Co., NUE was a major domestic producer of television receivers until February 1970. The following December, it filed the first complaint of this litigation, charging several of its Japanese competitors with violations of the antitrust laws and the laws governing competition in international trade. The complaint names as defendants the Mitsubishi Corp., which is a Japanese trading company, and seven Japanese television manufacturers Matsushita Electric Industrial Co., Toshiba Corp., Hitachi, Ltd., Sharp Corp., Mitsubishi Electric Corp., Sanyo Electric Co., and Sony Corp. Nine subsidiaries of these companies also are named as defendants in NUE's action. ¹

NUE alleges that the defendants have sought to drive American television producers out of the American market by selling televisions at artificially depressed prices. Charging that defendants have maintained lower prices for televisions sold in the United States than for comparable televisions sold in Japan, NUE asserts violations of the 1916 Antidumping Act, 15 U.S.C. § 72 (1976). NUE further alleges that these dumping practices are part of a large conspiracy in which defendants have agreed among themselves and have acted in concert with over 90 coconspirators around the world to maintain artificially low prices for Japanese televisions sold in the United States. Defendants allegedly have facilitated and financed this scheme by fixing high prices for televisions sold in Japan, a practice made possible by concerted action and protection afforded by the Japanese government. NUE asserts that this conduct violates §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (1976), and § 73 of the Wilson Tariff Act, 15 U.S.C. § 8 (1976), which applies the basic proscriptions of the Sherman Act to trade in imports.

NUE seeks treble damages for injuries sustained between 1966 and 1970. The remedy of treble damages is made available for the dumping claims by the Antidumping Act itself, 15 U.S.C. § 72 (1976), and for the Sherman and Wilson Tariff Act claims by § 4 of the Clayton Act, 15 U.S.C. § 15 (1976). NUE also seeks injunctive relief.

Zenith Radio Corp., a major domestic producer of consumer electronic products, filed the second complaint of this litigation in 1974 in the Eastern District of Pennsylvania. The Zenith complaint named all of the defendants of the NUE action, a few additional subsidiaries, ² and two American companies: Motorola, Inc., and Sears, Roebuck, and Co. Two of the common defendants, Sony Corp. and its American sales subsidiary, Sony Corp. of America, subsequently reached a complete settlement with Zenith. They are now defendants only in the NUE action.

The Zenith complaint repeats NUE's allegations of dumping, conspiracy, and intent to destroy domestic competition in the American market, but Zenith's allegations are broader in two respects. First, Zenith seeks damages for injuries sustained over a longer period, from 1968 through 1977, as opposed to a period of 1966 through 1970 in NUE's complaint. Second, Zenith's allegations cover not only televisions but also radios, phonographs, tape and audio equipment, and electronic components. In addition, Zenith charges defendants with discriminating in price among American purchasers, in violation of the Robinson-Patman Act, 15 U.S.C. § 13(a) (1976). Finally, Zenith asserts that the Matsushita and Sanyo defendants have violated § 7 of the Clayton Act, 15 U.S.C. § 18 (1976), by acquiring interests in domestic producers of consumer electronic products previously held by Motorola and Sears. Like NUE, Zenith prays for treble damages and injunctive relief.

A group of the Japanese defendants in the Zenith action filed two counterclaims. The first charges Zenith and its distributors throughout the United States with territorial allocations, horizontal and vertical price-fixing schemes, "key dealer preferences," and price discrimination, in violation of §§ 1 and 2 of the Sherman Act and the Robinson-Patman Act, 15 U.S.C. §§ 1, 2, 13(a) (1976). The second counterclaim charges Zenith and about 30 coconspirators with maintaining a program of sham litigation against Zenith's competitors. See Otter Tail Power Co. v. United States, 410 U.S. 366, 379-80, 93 S.Ct. 1022, 35 L.Ed.2d 359 (1973).

Sears filed a separate counterclaim challenging Zenith's advertising claims that Zenith color televisions are manufactured in the United States. Sears claims that the advertisements create an impression that all components of Zenith's color televisions and other consumer electronic products are of American origin, when some components are manufactured abroad. Sears asserts a violation of § 43 of the Lanham Act, 15 U.S.C. § 1125 (1976), which prohibits false designations of origin, and prays for damages and injunctive relief.

Shortly after the filing of the Zenith action, the two suits were consolidated for pretrial proceedings in the Eastern District of Pennsylvania. In re Japanese Electronic Products Antitrust Litigation, 388 F.Supp. 565 (Jud.Pan.Mult.Lit.1975). Subsequently, the district court, on NUE's motion, consolidated the two suits for trial. The court denied the motion of the Sony defendants for a separate trial on NUE's claims against them. Zenith Radio Corp. v. Matsushita Electric Industrial Co., No. 75-2451 (E.D.Pa. June 6, 1979) (Pretrial Order No. 182).

Both NUE and Zenith made timely demands for jury trial. Fourteen of the defendants moved to strike the demands, arguing that the case is too large and complex for a jury. ³ The district court denied their motion, concluding that the seventh amendment does not recognize the complexity of a lawsuit as a valid reason for denying a jury trial. The court explained its reasoning in a thorough and scholarly opinion, Zenith Radio Corp. v. Matsushita Electric Industrial Corp., 478 F.Supp. 889 (E.D.Pa.1979), and certified its order for interlocutory appeal under 28 U.S.C. § 1292(b) (1976). See 478 F.Supp. at 942-46. We have permitted the appeal to determine whether the district court's reason for denying ...