A federal judge dismissed three antitrust lawsuits brought against auctioneers Christie’s International Plc and Sotheby’s Holdings Inc. alleging they had fixed commission fees charged to customers in overseas auctions, Reuters reported.
U.S. District Judge Lewis Kaplan ruled that U.S. antitrust laws do not apply to activities abroad unless it can be shown the conduct intended to have or had significant effects within the United States.
The three cases were brought by eight parties who bought or sold items through auctions outside the United States, principally in London, although the goods were displayed in some instances prior to sale in the United States as well as abroad. The plaintiffs sought class-action status for the suits to represent similar customers involved in overseas auctions.
Kaplan said while it would be appropriate for the United States to punish the firms for any overcharges in this country, it could not provide remedies for overseas activity unless the plaintiffs could show the conduct had “direct, substantial and reasonably foreseeable effects” here.
Sotheby’s and Christie’s, the world’s two largest auctioneers of fine arts and antiques, previously reached a proposed $512 million settlement to resolve a class-action lawsuit alleging they colluded to keep their fees high at U.S. auctions.
The J. Paul Getty Trust, for example, has filed an objection claiming that the accord was unfair because it does not compensate individuals who bought and sold art at auctions outside the United States.
The auction houses are proposing to enhance the settlement by offering auction customers a total of about $100 million in coupons that sellers can apply to future transactions with the firms. The plan would allow customers to redeem the coupons for cash if they were not used within five years.
Kaplan has previously voiced skepticism about the coupon proposal and it is expected to generate objections from claimants as well. Coupons are a controversial tool in class-action settlements as plaintiffs lawyers often argue that coupons are difficult to redeem and may not be worth their face value.
Both Christie’s and Sotheby’s argued in court papers that they believe the coupons are worth face value, or close to it.
In October, Sotheby’s pleaded guilty to a multimillion-dollar price-fixing scheme with Christie’s and agreed to pay a $45 million criminal fine, but Kaplan delayed action on Sotheby’s plea to consider whether victims will be adequately compensated through the civil settlement.
A different judge did accept the guilty plea entered by former Sotheby’s President and Chief Executive Diana Brooks. Under the plea agreement she will cooperate with the government in its three-year criminal probe. She is scheduled for sentencing in May.