## Facts

- Taiwanese and Korean TFT–LCD manufacturers participated in a multi-year horizontal price-fixing conspiracy organized through secret meetings abroad.
- AU Optronics Corp. (AUO) manufactured TFT–LCD panels abroad; its U.S. subsidiary (AUOA) distributed finished products containing those panels into U.S. channels of commerce.
- The government alleged two bases for Sherman Act coverage: (1) import commerce involving sales into the United States, and (2) foreign non-import transactions producing a “direct, substantial, and reasonably foreseeable effect” on U.S. commerce under the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. § 6a.
- Federal authorities investigated the conspiracy, including an FBI raid of AUOA’s Houston office.
- After an eight-week jury trial in the Northern District of California, AUO, AUOA, and two AUO executives were convicted of conspiring to fix prices in violation of § 1 of the Sherman Act, 15 U.S.C. § 1.
- Defendants challenged venue, the extraterritorial reach of the Sherman Act, the indictment and proof under the FTAIA, the use of per se analysis, the sufficiency of the evidence, and jury instructions; AUO also challenged its sentence.

## Issues

1. Whether venue in the Northern District of California was proper for an international price-fixing conspiracy.
2. Whether the FTAIA limits subject-matter jurisdiction or instead defines a merits component of Sherman Act liability for non-import foreign commerce.
3. Whether the indictment adequately alleged, and the evidence proved, Sherman Act coverage through import commerce and/or the FTAIA domestic-effects exception.
4. Whether the district court properly treated the conduct as per se unlawful horizontal price-fixing rather than applying the rule of reason.
5. Whether the jury instructions on import commerce and domestic effects constructively amended the indictment or misled the jury.

## Decision

- The Ninth Circuit affirmed the convictions of all defendants and affirmed AUO’s sentence.
- Venue in the Northern District of California was upheld based on acts in furtherance of the conspiracy tied to the district.
- The court held the FTAIA is not a subject-matter jurisdiction limitation; it is a merits component of a Sherman Act claim involving non-import foreign trade.
- The court held the FTAIA does not apply to import trade; import commerce remains within the Sherman Act without additional FTAIA pleading.
- The indictment and proof were sufficient on an import-commerce theory; the evidence supporting import commerce alone was adequate to sustain the convictions.
- The district court correctly applied per se treatment to the horizontal price-fixing agreement.
- The challenged instructions did not constructively amend the indictment and, considered as a whole, did not mislead the jury.

## Legal Principles

- Horizontal price-fixing agreements among competitors are per se unlawful under § 1 of the Sherman Act.
- The FTAIA is a merits limitation for claims involving certain foreign non-import commerce, not a restriction on federal subject-matter jurisdiction.
- The FTAIA does not apply to import commerce; where the conduct involves import trade with the United States, Sherman Act coverage does not depend on satisfying the FTAIA domestic-effects exception.
- For non-import foreign commerce, the FTAIA domestic-effects exception requires a “direct, substantial, and reasonably foreseeable effect” on U.S. commerce, and that the domestic effect gives rise to the Sherman Act claim.
- The FTAIA is not an affirmative defense in the sense that it relieves the government of pleading and proving Sherman Act coverage when foreign non-import commerce is at issue.
- Jury instructions do not constructively amend an indictment when they do not broaden the bases of conviction beyond the charged theories and, read as a whole, accurately state the law.

## Conclusion

The Ninth Circuit sustained criminal Sherman Act convictions arising from a foreign-based TFT–LCD cartel, holding that import commerce independently supports liability, that the FTAIA is a merits inquiry (not jurisdictional) applicable only to non-import foreign trade, and that per se treatment and the challenged jury instructions were proper on the record presented.


United States v. Hui Hsiung, 778 F.3d 738 (9th Cir. 2015)