Zenith Radio Corp. v. Matsushita Elec. Indus. Co.

Decision Date13 May 1981
Docket NumberCiv. A. No. 74-2451,74-3247. MDL 189.
Citation513 F. Supp. 1100
PartiesZENITH RADIO CORPORATION, Plaintiff, v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., et al. Defendants. NATIONAL UNION ELECTRIC CORPORATION, Plaintiff, v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., et al. Defendants. In re JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION.
CourtU.S. District Court — Eastern District of Pennsylvania
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Blank, Rome, Comisky & McCauley, by Edwin P. Rome, William H. Roberts, John Hardin Young, Arnold I. Kalman, Kathleen H. Larkin, Norman E. Greenspan, Lawrence S. Bauman, Philadelphia, Pa., for Zenith Radio Corp. and National Union Elec. Corp., plaintiffs.

Philip J. Curtis, John Borst, Jr., Glenview, Ill., for Zenith Radio Corp., plaintiff.

Mudge Rose Guthrie & Alexander by Donald J. Zoeller, John P. Hederman, Thomas P. Lynch, Howard C. Crystal, Robert A. Jaffe, Shelly B. O'Neill, Mark K. Neville, Jr., New York City, Drinker, Biddle & Reath by Patrick T. Ryan, Philadelphia, Pa., for Tokyo Shibaura Elec. Co., Ltd. and Toshiba America, Inc., defendants; defense coordinating counsel.

Duane, Morris & Heckscher by Henry T. Reath, Terry R. Broderick, Philadelphia, Pa., Crummy, Del Deo, Dolan & Purcell by John T. Dolan, Arnold B. Calmann, Newark, N.J., Seki, Jarvis & Lynch by Hoken S. Seki, Richard O. Briggs, Chicago, Ill., for Mitsubishi Elec. Corp. and Mitsubishi Elec. Sales America, Inc.

Reid & Priest by Charles F. Schirmeister, Robert J. Lynch, New York City, L. Peter Farkas, Washington, D.C., for Mitsubishi Corp. and Mitsubishi Intern. Corp., defendants.

Weil, Gotshal & Manges by Ira M. Millstein, A. Paul Victor, Joel B. Harris, Kevin P. Hughes, Robert K. Hood, H. Adam Prussin, Harry M. Davidow, Jeffrey L. Kessler, Stuart Peim, Lenore Liberman, Gayle E. Hanlon, Makoto Matsuo, New York City, Morgan, Lewis & Bockius by Raymond T. Cullen, Philadelphia, Pa., for Matsushita Elec. Indus. Co., Inc., Matsushita Elec. Corp. of America, Matsushita Electronics Corp., Matsushita Elec. Trading Co., and Quasar Electronics Corp., defendants.

Metzger, Shadyac & Schwarz by Carl W. Schwarz, Michael E. Friedlander, William H. Barrett, Stephen P. Murphy, William B. T. Mock, Jr.; Tanaka, Walders & Ritger by H. William Tanaka, Lawrence R. Walders, B. Jenkins Middleton, Washington, D.C., Hunt Kerr Bloom & Hitchner, by Charles J. Bloom, Philadelphia, Pa., for Hitachi, Ltd., Hitachi Sales Corp. of America, and Hitachi Kaden Hanbai Kabushiki Kaisha, defendants.

Wender, Murase & White by Peter J. Gartland, Gene Yukio Matsuo, Peter A. Dankin, Lance Gotthoffer, New York City, for Sharp Corp. and Sharp Electronics Corp., defendants.

Whitman & Ransom by Patrick H. Sullivan, Dugald C. Brown, James S. Morris, Kevin R. Keating, Michael S. Press, New York City, Hunt Kerr Bloom & Hitchner by Charles J. Bloom, Philadelphia, Pa., for Sanyo Elec., Inc., Sanyo Elec. Co., Ltd., Sanyo Mfg. Corp. and Sanyo Elec. Trading Co., Ltd., defendants.

Arnstein, Gluck, Weitzenfeld & Minow by Louis A. Lehr, Jr., Stanley M. Lipnick, John L. Ropiequet, Chicago, Ill., for Sears, Roebuck & Co., defendant.

Rosenman, Colin, Freund, Lewis & Cohen by Asa D. Sokolow, Renee J. Roberts, Marc Rowin, Kaye, Scholer, Fierman, Hays & Handler by Joshua F. Greenberg, Randolph S. Sherman, Daniel D. Chazin, New York City, Wolf, Block Schorr & Solis-Cohen by Franklin Poul, Philadelphia, Pa., for Sony Corp. and Sony Corp. of America, defendants.

Kirkland & Ellis by Thomas P. Coffey, E. Houston Harsha, Karl F. Nygren, Chicago, Ill., for Motorola, Inc., defendant.

                                         TABLE OF CONTENTS
                  (Summary Judgment Motions Related to Plaintiffs' Sherman Act
                     Wilson Tariff Act, Clayton Act and Robinson-Patman Act
                                 Claims) Pretrial Order No. 307
                    I. PRELIMINARY STATEMENT                                            1117
                   II. THE ANATOMY OF PLAINTIFFS' CONSPIRACY CLAIMS                     1124
                  III. THE FPS, FINAL STAGE CASE MANAGEMENT, AND THE SUMMARY            1130
                       JUDGMENT RECORD
                   IV. SUMMARY OF PRETRIAL EVIDENTIARY RULINGS                          1135
                    V. STANDARDS GOVERNING SUMMARY JUDGMENT                             1139
                   VI. LEGAL PRINCIPLES AFFECTING PLAINTIFFS' SHERMAN ACT               1144
                       § 1 AND WILSON TARIFF ACT CONSPIRACY CASE
                       A. Sherman Act § 1                                          1144
                          1. Introduction and Basic Principles                          1144
                          2. Price Agreements                                           1146
                             a. The "Price Necessary to Get the Sale"                   1147
                             b. Agreement to Increase Market Share                      1147
                             c. Agreement to Fix Minimum Prices                         1147
                             d. Agreement to Price Predatorily                          1148
                             e. Agreement to Fix Low or Depressed Prices                1148
                             f. Agreement to Fix Minimum Prices and a Second Agree-     1148
                                ment to Violate the First
                             g. Agreement to Deceive Government Authorities With Re-    1148
                                spect to Price
                
                         3. Market Allocation                                                          1148
                         4. Membership in Trade Associations and Attendance at Meetings                1149
                         5. Exchange of Information Concerning Prices, Production and                  1149
                            Inventory Figures, and Joint Forecasting
                         6. Product Standardization and Technical Research Exchange                    1153
                         7. Secret Rebates                                                             1154
                         8. Joint Activities in Promoting Public and Governmental Rela-                1155
                            tions and Joint Legal Action in Response to Common Problems
                      B. Statutory Antitrust Standing Under § 4 and § 16 of the Clayton      1157
                         Act
                      C. The Wilson Tariff Act                                                         1162
                      D. The Law of Conspiracy in an Antitrust Context                                 1165
                         1. In General                                                                 1165
                         2. Fragmentation of the Plaintiffs' Conspiracy Allegations                    1166
                         3. The "Slight Evidence" Rule                                                 1169
                         4. The Requisites of Circumstantial Proof of Conspiracy by Infer-             1170
                            ence from Consciously Parallel Business Behavior
                            (a) Introduction                                                           1170
                            (b) General Principles Concerning Inferences from Circumstan-              1170
                                tial Evidence on Summary Judgment Motions
                            (c) Inferring Conspiracy from Parallel Conduct                             1172
                         5. Vicarious Liability of Coconspirators: The Pinkerton Doctrine              1176
                            and Robinson-Patman Act and Clayton Act § 7 Violations
                         6. Requisites for Admissibility of Coconspirator Declarations                 1178
                  VII. PLAINTIFFS' SHERMAN ACT § 1 AND WILSON TARIFF ACT                               1180
                       CONSPIRACY CASE AS TO TELEVISION RECEIVERS—EVIDENTIARY
                       REVIEW AND DISCUSSION OF LEGAL SUFFICIENCY
                       A. Introduction                                                                 1180
                       B. The Technological Development of Consumer Electronic Products                1182
                          and the Industrial Organization of Japanese Electronics Firms on
                          the Foundation of Borrowed Technology
                       C. The Closed Japanese Market                                                   1183
                       D. Plaintiffs' Expert Reports                                                   1186
                       E. Plaintiffs' Allegations About the Combined Economic Power of the             1186
                          Defendants and their Cartel
                       F. The Manufacturers' Agreements and the JMEA Rules; Operation                  1187
                          of the Minimum Price Agreements and the "Five Company Rule"
                          1. General Background; Operation of the Minimum Price Provisions             1187
                          2. Operation and Significance of the "Five Company Rule"                     1189
                          3. The Agreements as Evidence of Conspiracy                                  1190
                          4. The Role of MITI                                                          1191
                       G. Activities of Certain Groups and Associations in Japan                       1195
                          1. Introduction; General Background                                          1195
                          2. The Sub Rosa "Conspiratorial" Meetings of Executives Re-                  1196
                             vealed by the Six Company Case
                             (a) Introduction; General Background                                      1196
                             (b) Evidence of the Home Market Aspect of the "Unitary"                   1202
                                 Conspiracy; the Plaintiffs' "War-chesting" Claims
                             (c) Evidence of the Export Aspect of the "Unitary" Conspiracy             1209
                             (d) The Six Company Case—Conclusion                                       1213
                          3. The EIAJ                                                                   1215
                
                          4. The JMEA and the Television Export Council                        1221
                          5. The Market Stabilization Council, The Nine Essential Points of    1223
                             Implementation, and the Four Associations Conference
                       H. The "Connection" Documents                                           1226
                       I. The
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