Japanese Win a Reversal in Dumping Case
The Supreme Court, granting Japanese manufacturers a major victory in a longstanding antitrust battle, ruled Wednesday that there is not enough evidence to require the firms to defend themselves at trial against claims by U.S. companies that they conspired to “dump” television sets in this country at artificially low prices.
In a 5-4 decision, the justices reversed a ruling by a federal appeals court in Philadelphia that ordered a trial in a widely watched, 16-year-old suit by Zenith Radio Corp. and National Union Electric Corp. seeking more than $1 billion in damages against 21 Japanese corporations.
The justices said there is “strong evidence” that a conspiracy does not exist--but they sent the case back to the appeals court for further proceedings to determine whether there may be other, “unambiguous” evidence sufficient to warrant trial.
‘Immunity’ Not Decided
The court also held that there is no need to decide one of the key issues that had been raised in the case: whether the Japanese companies were immune from antitrust law because the alleged conspiracy was compelled by their government.
Donald J. Zoeller of New York, an attorney who represents the Japanese firms, called the ruling “an immensely favorable result” that would put the companies in a “strong position” to eventually win a dismissal of the antitrust conspiracy claims.
A spokesman for Zenith, William A. Nail, said the U.S. companies would continue to press the antitrust case. He said his company believes that it is still possible to pursue a separate claim that the Japanese firms violated the federal Antidumping Act of 1916.
The case has drawn attention from foreign governments and U.S. officials concerned about its potential effects on antitrust law and international trade.
Sides With Japanese
The Reagan Administration has sided with the Japanese firms, saying that if they were forced to trial in this instance, all foreign companies would be discouraged from engaging in “vigorous price competition” in the United States.
The dispute began in 1970 when National Union Electric, formerly known as Emerson Radio Co., filed suit against the Japanese companies and their subsidiaries. Zenith joined the action in 1974.
The defendants include Matsushita Electric Industrial Co., Toshiba Corp., Hitachi Ltd., Mitsubishi Electric Corp., Sanyo Electric Co. and Sharp Corp.
The plaintiffs contended that the Japanese were selling television sets and other goods at inordinately high prices in Japan while they were flooding the American market with artificially low-priced goods in violation of federal laws.
They claimed that eight U.S. television manufacturers and other smaller firms had been forced out of business, resulting in the loss of 70,000 jobs, in a “predatory” scheme of pricing goods below cost to gain control of the market.
After years of legal maneuvering, a federal district court in 1981 dismissed the case without trial. But two years later, the appeals court reversed the decision, finding that there was sufficient evidence to go to trial.
The high court’s opinion (Matsushita vs. Zenith, 83-2004) was written by Justice Lewis F. Powell Jr., joined by Chief Justice Warren E. Burger and Justices Thurgood Marshall, William H. Rehnquist and Sandra Day O’Connor.
Powell called the alleged conspiracy “implausible” and concluded that if there were such a plan, it had not succeeded in two decades of operation.
He noted that the two largest shares of the retail television set market--together totaling 40% of all sales--are held by Zenith and RCA.
Although the Japanese firms’ collective share of the market jumped from about 20% to 50% during that period, there was no evidence that they are in a position to charge monopoly prices, Powell said.
Justice Byron R. White wrote a dissenting opinion, joined by Justices William J. Brennan Jr., Harry A. Blackmun and John Paul Stevens. The dissenters cited evidence they said indicated that the Japanese had raised prices in that country, shrinking demand there and allowing excessive exports to this country that depressed prices here.
