04 Sept 2013 Cases

Compass Lexecon's Clients Toshiba and HannStar Prevail in Multi-Billion Dollar Best Buy LCD Price Fixing Antitrust Trial

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Jury Finds Minimal Damages for HannStar Based on Testimony from Compass Lexecon Expert Professor Dennis Carlton and No Liability for Toshiba

HannStar and other Taiwanese, Korean, and Japanese firms (not including Toshiba) had previously reached guilty plea agreements with the U.S. Department of Justice for fixing prices on LCD panels. In this litigation, Best Buy accused Toshiba and HannStar of conspiring for the better part of a decade with other firms to fix prices for LCD panels and sought damages related to this alleged conspiracy. Best Buy asked for damages of more than $2 billion post-trebling. Plaintiffs relied on their economic expert for their claimed damages which was based on a complicated econometric model. Plaintiffs' expert claimed average overcharges were around 20%.

Compass Lexecon's Professor Dennis Carlton testified that Best Buy's expert witness had greatly overstated any overcharges resulting from the alleged conspiracy. He explained how some basic economic calculations showed how unreasonable Plaintiffs' expert's claims were. He also showed that with some simple changes to the Plaintiff's expert's econometric model, the huge price overcharge disappeared. Professor Carlton presented his own econometric model, and found overcharges that were in the range of 0.4% to 1.9%, depending upon the type of panel.

The jury found no liability for Toshiba, and, for HannStar, which admitted liability, the jury awarded direct damages in precisely the amount based on Professor Carlton's analysis — $7.47 million. The jury also found that the conduct did not have a direct, substantial and reasonably foreseeable effect on commerce in the United States. For this reason, press stories after the verdict stated that HannStar may ultimately not have to pay any damages.

Professor Carlton was supported by teams in Compass Lexecon's Washington D.C, Boston and Chicago offices, which included Mark Israel, Ian MacSwain, Allan Shampine, Chris Cavanagh, Guillermo Israilevich, Georgi Giozov, Joel Papke, Quinn Johnson, Ben Wagner, Dave Grothouse, and many others. The team worked closely with Chris Curran, Mark Gidley, Martin Toto and Kristen McAhren of White & Case who successfully represented Toshiba, and Robert Freitas of Freitas, Tseng & Kaufman who successfully represented HannStar.

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