Case of the Day: TruePosition v. LM Ericsson Telephone Co.

The case of the day is TruePosition, Inc. v. LM Ericsson Telephone Co. (E.D. Pa. 2012). TruePosition is in the business of “developing and marketing high accuracy location products that operate over cellular telecommunications networks.” TruePosition sued three firms, LM Ericsson Telephone Co., Qualcomm, Inc., and Alcatel-Lucent USA, Inc., for violating the Sherman Act by conspiring to exclude TruPosition’s “Uplink Time Difference Of Arrival” technology from industry standards promulgated by the Third Generation Partnership Project, a non-profit standard-setting organization in France.

Ericsson had moved to dismiss for want of personal jurisdiction, and the judge had permitted TruePosition to take jurisdictional discovery before ruling on the motion. Ericsson ETSI, a non-profit standard-setting organization that was also named as a defendant, then sought a protective order, asserting that all jurisdictional discovery had to proceed via the Hague Evidence Convention rather than under the Federal Rules of Civil Procedure. As a threshold matter, the judge rejected the notion that its decision should turn on the distinction between merits discovery and discovery aimed at deciding whether it had personal jurisdiction:

Importantly, we also point out that there is no exception to the Aerospatiale holding for jurisdictional discovery. The distinction drawn … between ‘merits’ discovery and ‘jurisdictional’ discovery is predicated on a false dichotomy of having and not having jurisdiction, and amounts to no real difference because the court has jurisdiction for either type of discovery. (Citations omitted)

Ericsson’s main argument was based on the French blocking statute. The judge held, correctly, that the blocking statute was not dispositive, but it found that the Aerospatiale factors were mixed. On the one hand, the discovery sought was limited to narrow issues, the Hague Convention procedures were likely to be more time-consuming, and the United States has a “strong national interest” in providing a remedy for anticompetitive behavior in the international telecommunications market. On the other hand, Ericsson was acting in good faith, a factor that weighed “slightly” in its favor.

The judge took note of the Christopher X case, the case in which a French lawyer had been held criminally liable for violating the blocking statute, but he noted that there were apparently no cases where the blocking statute had been enforced by France in a case involving jurisdictional discovery (I am not sure why this is a relevant consideration, and it is at odds with the judge’s own observation about the lack of a distinction between ‘merits’ and ‘jurisdictional’ discovery) and noted the precedents discounting the fear of prosecution even after Christopher X.

In light of this analysis, the judge denied the motion for a protective order. This decision illustrates the point the ABA made in its recent resolution: US courts are reluctant to give much weight to foreign blocking statutes. Whether they are unduly reluctant, whether they are just following the logic of Aérospatiale, or whether Aérospatiale itself should be revisited, are the meaty questions.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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