Zenith Radio Corp. v. Matsushita Elec. Indus. Co., Civ. A. No. 74-2451

• Court: United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
• Citation: 494 F. Supp. 1190
• Docket Number: 74-3247. MDL No. 189.,Civ. A. No. 74-2451
• Parties: ZENITH RADIO CORPORATION v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. et al. NATIONAL UNION ELECTRIC CORPORATION v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. et al. In re JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION.
• Decision Date: 25 April 1980

494 F. Supp. 1190

ZENITH RADIO CORPORATION
v.
MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. et al.
NATIONAL UNION ELECTRIC CORPORATION
v.
MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. et al.
In re JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION.

Civ. A. Nos. 74-2451, 74-3247. MDL No. 189.

United States District Court, E. D. Pennsylvania.

April 14, 1980.

As Amended April 23 and April 25, 1980.

494 F. Supp. 1191

COPYRIGHT MATERIAL OMITTED

494 F. Supp. 1192

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 Corporation and National Union Electric Corporation, plaintiffs

Morton P. Rome, Wyncote, Pa., for National Union Electric Corporation, plaintiff.

Philip J. Curtis, John Borst, Jr., Glenview, Ill., for Zenith Radio Corporation, 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, Newark, N.J., Baker & McKenzie by Hoken S. Seki, Thomas E. Johnson, Chicago, Ill., for Mitsubishi Electric Corporation.

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

Weil, Gotshal & Manges by Ira M. Millstein, A. Paul Victor, John F. Carney, Joel B. Harris, Kevin P. Hughes, Robert K.

494 F. Supp. 1193

Hood, H. Adam Prussin, Jeffrey L. Kessler, Stuart Peim, Lenore Liberman, Gayle E. Hanlon, Alan Rothstein, 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 Lawrence R. Walders, B. Jenkins Middleton, Washington, D.C., Pepper, Hamilton & Scheetz, Philadelphia, Pa., for Hitachi, Ltd., Hitachi Sales Corporation 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 Corporation and Sharp Electronics Corporation, defendants.

Whitman & Ransom by Patrick H. Sullivan, Dugald C. Brown, Kevin R. Keating, Michael S. Press, New York City, Pepper, Hamilton & Scheetz by Charles J. Bloom, Philadelphia, Pa., for Sanyo Elec., Inc., Sanyo Elec. Co., Ltd., 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, 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.

OPINION AND ORDER (1916 ANTIDUMPING ACT)

EDWARD R. BECKER, District Judge.

 TABLE OF CONTENTS Page
                 I. PRELIMINARY STATEMENT 1194
                 II. CONTENTIONS OF THE PARTIES 1198
                 A. The Defendants 1198
                 B. The Plaintiffs 1201
                III. THE FACTUAL RECORD ON SUMMARY JUDGMENT 1202
                 A. Introduction 1202
                 B. Physical Similarities and Differences Between U. S. and Japanese
                 Television Receivers 1204
                 C. Effect of the Physical Differences on Consumer Use and Marketability 1206
                 D. Physical Differences Between U. S. and Japanese Non-Television
                 Consumer Electronic Products; Effects Thereof on Consumer
                 Use and Marketability 1210
                 IV. ANALYSIS OF THE ANTIDUMPING ACT OF 1916 1211
                 A. Introduction 1211
                 B. The Statutory Text 1213
                 1. Similarities to Antitrust Statutes 1213
                 2. Incorporation of Customs Appraisement Terminology 1215
                 C. Antitrust and Tariff Law and Politics in the First Wilson Administration 1217
                 D. Legislative History of the Antidumping Act of 1916 1220
                

494 F. Supp. 1194
                 E. Relationship Between the Antidumping Act of 1916 and the Antidumping
                 Act of 1921 1223
                 V. THE DEGREE OF SIMILARITY REQUIRED FOR PRODUCT COMPARISONS
                 UNDER THE 1916 ANTIDUMPING ACT 1226
                 A. Introduction 1226
                 B. Applicability of the 1916 Act to Non-Identical Goods 1227
                 C. The Standard of "Like Grade and Quality" Under the Clayton Act
                 and the Robinson-Patman Act 1231
                 D. The Standard of Similarity Under the Tariff Acts 1234
                 VI. STANDARDS FOR SUMMARY JUDGMENT; APPLICATION OF
                 THE LEGAL STANDARDS OF COMPARABILITY TO THE
                 FACTS 1239
                VII. CERTIFICATION FOR INTERLOCUTORY APPEAL UNDER 28
                 U.S.C. § 1292(b) 1243
                

I. PRELIMINARY STATEMENT

Dumping is a phenomenon in international trade which has been defined as "price discrimination between purchasers in different national markets."¹ Generically, dumping is the sale of commodities in a foreign market at a price which is lower than the price or value of comparable commodities in the country of their origin. The issue before us arises in the context of the alleged dumping in the United States of television receivers, radios, phonographs and tape and cassette recorders manufactured in Japan. Plaintiffs Zenith Radio Corporation ("Zenith") and National Union Electric Corporation ("NUE") have alleged in their complaints that the Japanese defendants² and their co-conspirators³ are and have been participants in a conspiracy which, by artificially lowering export prices, has for more than 20 years sought the methodical destruction of the United States domestic consumer electronic products industry. This litigation is described generally at pp. 1195-1198 of our opinion on subject matter jurisdiction, filed this day. Instead of rescribing that description here, we simply incorporate those pages by reference. Suffice it here to say that this is one of the most massive cases ever heard by the United States courts, and that in addition to numerous claims under the antitrust laws, plaintiffs seek treble damages for alleged violations of the Antidumping Act of 1916,⁴ one of several dumping statutes enacted by the Congress.

494 F. Supp. 1195

This opinion addresses the separate motions of several groups of defendants for summary judgment on the plaintiffs' 1916 Antidumping Act claims. The motions addressed to the 1916 Act claims have been advanced as part of wider motions seeking summary judgment on other discrete portions of the litigation as well. Motions which deal with the 1916 Act claims have been filed by Mitsubishi Electric Corporation and Melco Sales, Inc.; by Sears, Roebuck and Co.; by Matsushita Electric Industrial Co., Ltd., and affiliated defendants; and by Hitachi, Ltd., Toshiba Corporation, Sanyo Electric Co. and their affiliated defendants.⁵ The numerous summary judgment motions concerning this and other issues are catalogued in our opinion on subject matter jurisdiction. As is explained there, we intend to decide the pending motions issue by issue, writing separate opinions on each issue if necessary. Accordingly, this opinion disposes of the arguments based on the 1916 Antidumping Act made in all of the motions listed above, and does not reach the other issues which are comprehended in these motions.

In order to decide the defendants' motions for summary judgment on plaintiffs' dumping claims, we are required to interpret the 1916 Act and to apply it to the undisputed facts before us. Although television sets and other consumer electronic products manufactured for sale and use in the United States, as a class, and consumer electronic products manufactured for sale and use in Japan, as a class, look essentially the same and serve precisely the same functions for the listener or viewer, U. S. and Japanese consumer electronic products⁶ are

494 F. Supp. 1196

adapted to the technical conventions of television and FM broadcasting and of the electrical power systems which are different in the two countries. While the standards for encoding visual and aural information on a radio wave are identical in the television and FM systems of the U. S. and Japan, the frequencies allocated to TV and FM broadcasts are different. As a result, television and FM receivers manufactured for use in Japan cannot receive many broadcasts in the U. S. and vice versa. In addition, the Japanese electrical power system uses 100 volts and frequencies of either 50 or 60 Hertz ("Hz"), while the U. S. system is at 120 volts and only 60 Hz. Because of this difference, Japanese television receivers used in the U. S. would be in serious danger of failing because of overheating, Japanese phonographs and tape recorders of a certain design would run at the wrong speed, and the audio output of radios, phonographs, and tape recorders would include an objectionable hum.

These facts, which are undisputed, form the background for the task before us in this opinion — i. e., the first construction in the 64 years since the enactment of the 1916 Act of its core provisions. More specifically, we must decide what standards the Act imposes for the comparability of the United States and foreign products required in order for an import transaction to be subject to the prohibition of the 1916 Act.

While the contentions of the parties will be set forth in detail infra, suffice it to say for purposes of this preliminary statement that the defendants, arguing from the text of the 1916 Act which uses...