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Seventh Circuit to Motorola: No Rehearing En Banc

On December 1, 2014, we wrote about the Seventh Circuit’s decision in Motorola Mobility LLC v. AU Optronics Corp., which affirmed dismissal of the vast majority of Motorola’s claims regarding LCD panels.

Motorola filed a petition for rehearing and rehearing en banc. On January 12, 2015, the Seventh Circuit denied Motorola’s petition for rehearing en banc.

Also on January 12, the Seventh Circuit issued an amended version of its November 26, 2014 decision. The bulk of the opinion and core of the Seventh Circuit’s reasoning remains unchanged, but the amended opinion does have three notable additions:

First, on pages 8-9, the Seventh Circuit added a paragraph discussing corporate structure, emphasizing that U.S. law treats parents and subsidiaries as separate corporations, and explaining that those corporate formalities should be respected:

Motorola wants us to treat it and all of its foreign subsidiaries as a single integrated enterprise, as if its subsidiaries were divisions rather than foreign corporations. But American law does not collapse parents and subsidiaries (or sister corporations) in that way. Some foreign nations, it is true, treat multinational enterprises as integrated units. . . . But the United States and other developed countries refused to buy that theory. They insisted, and continue to insist, that corporate formalities should be respected unless one of the recognized justifications for piercing the veil, or otherwise deeming a parent and a subsidiary one, is present. None is present in this case.

(internal citations omitted).

Second, at pages 12-13, the Seventh Circuit added language noting that Motorola “can’t pick and choose from the benefits and burdens of United States corporate citizenship.” The Seventh Circuit noted that Motorola does not claim that its foreign subsidiaries owe taxes to the United States or are bound by the workplace safety or labor laws of the United States. In other words, having chosen to incorporate its subsidiaries in overseas locations and receiving the benefits of that incorporation, the Seventh Circuit found that Motorola cannot seek to have those same subsidiaries avail themselves of the protections of United States antitrust law.

Third, at pages 19-20, the Seventh Circuit noted that the United States cooperates with other countries in major antitrust cases and is no longer “the world’s competition policeman.” Further, the Seventh Circuit found that Motorola should not be permitted “a right to forum shop” in order to bring an action in the country that provides the most generous private damages remedies.