Advertisement
 
YOU ARE HERE: LAT HomeCollectionsTrials
(Page 2 of 2)

Antitrust Case Targets Actions on Foreign Soil

Courts: Japanese firm is accused of fixing prices of fax paper in a landmark trial that could have global implications.

July 13, 1998|DAVAN MAHARAJ | TIMES STAFF WRITER

Even before Nippon's trial, Gertner's courtroom was outfitted with computers and a dozen television monitors to display some of the 2 million pages of documents assembled by federal prosecutors.

When Gertner determined that jurors should be allowed to see a particular document, she would hit the on button on her "control box," lighting up six television screens in front of the jury.

"I feel less of a judge and more of a starship commander," said Gertner about the high-tech apparatus in her courtroom. "I feel like Capt. Picard."

And when the government's star witness decided that he could not travel to Boston to testify, Gertner ordered that two large-screen television monitors be installed in her courtroom to receive his testimony via an international transmission.

But that was only possible after Nippon's lawyers waived their constitutional right to confront the witness face to face.

During a six-day period, Gertner, prosecutors and defense attorneys would remain in court late at night to tape testimony of the government witness, who would show up at the U.S. Embassy in Tokyo about 7:30 a.m the next day. The next morning in Boston, jurors saw an edited version of the tape.

Some courtroom observers wonder whether it was worth the trouble. During the trial, the star witness, Shigeru Hinoki, an executive with one of the paper makers that had earlier pleaded guilty, denied through a translator that the manufacturers had agreed to fix prices. That directly contradicted Hinoki's earlier account of the 1990 meetings to them, prosecutors said.

Others questioned why prosecutors were pursuing the case at all.

Thermal fax paper, the glossy specialty paper that was once used for many fax machines and certain medical printing equipment, is now a virtually defunct industry.

Even in 1990, North American sales by Japanese paper makers accounted for only $120 million. Of that amount, Nippon's predecessor took in a mere $6 million.

But there is little doubt, legal scholars say, that the government is pursuing the case to send a message to price fixers around the globe.

Prosecutors, who could have charged Nippon with civil violations, opted instead for criminal charges, which carries a fine of up to $10 million.

Fox, the NYU law professor, said she was not familiar with the facts in the Nippon case but added that the U.S. government should not be precluded from chasing firms like Nippon if prosecutors can prove that they conspired to hurt U.S. consumers.

"The world is shrinking, and price fixing is accepted as illegal behavior all over the globe," Fox said. "Why should you be able to escape prosecution by doing your illegal act in a foreign country?"

But Alan M. Cohen, an attorney for Nippon, said in court there is sometimes a thin line separating U.S. antitrust law and Japanese business culture.

Japanese competitors routinely get together to discuss common issues in their industries, Cohen said. "A bunch of guys having tea in Tokyo is not a U.S. crime."

Advertisement
Los Angeles Times Articles
|
|
|