Law fact pattern

Hello,The teacher’s request :Do not use bullet points.Make your responses logical, organized, and in a narrative format. I will not accept any late submissions. You can find fact pattern in this file, please do this work by yourself. Thank you so much!

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Teacher’s request:
Do not use bullet points. Make your responses logical, organized, and in a narrative format. I
will not accept any late submissions.
Hong Kong Electronics (hereafter “HKE”) is a Hong Kong company that manufacturers computer
chips. Its customers are primarily U.S. high tech companies. Those companies buy HKE’s chips
and integrate them into their products which become end products that their customers
purchase. Your company is one of the customers of the end product producers. The process of
integration of HKE’s chips takes place in the U.S. at the factories of HKE’s customers.
There are only 5 companies, including HKE, that manufacture the types of chips that HKE
manufacturers. Therefore, there are 5 companies that make up the relevant product market
for the production of these chips. They are all located in China, but they all compete in the U.S.
market. Therefore, the relevant geographic market is the entire U.S.
HKE’s main office and production facilities are in Shenzhen, China. It manufactures its chips
there and transports them to the Port of Hong Kong. The products are then taken by a vessel of
HKE’s selection to the Port of Los Angeles. From there, the chips are taken by rail to HKE, U.S.
which is a wholly owned subsidiary of HKE located in Memphis, Tennessee. From there the
chips are taken by trucks or air to HKE’s customers’ locations where they are integrated by the
customers into the customers’ end products.
Because of the intensity of the competition, representatives of HKE, HKE, USA, and HKE’s four
competitors met in Macao, China to discuss competition. At that meeting, they all agreed to
sell their products for the same price and to compete on other bases, such as service, delivery
times, methods of delivery, warranty servicing, etc.
The Sherman Act1 provides both a civil cause of action and a criminal offense for price fixing
among horizontal competitors and for conspiring to do so. Both the Department of Justice and
15 U.S.C. §§ 1-7 (2012). “The Sherman Act protects free-market competition by prohibiting ‘[e]very
contract, combination. . . or conspiracy’ in restraint of trade. Despite the expansive language of the
Sherman Act, courts have consistently held that Congress intended § 1 to prohibit only ‘unreasonable’
restraints of trade.” Kevin Ryan, et al., Antitrust, 54 AM. CRIM. L.REV. 987, 987 (2017). See also, T.A.
Hemphill, Antitrust, Dynamic Competition and Business Ethics, 50 J. BUS. ETHICS 127, 127 (2004) (“{T]his article
makes a seminal case for the development of a business ethics sub-field of antitrust ethics that is synonymous with
the ethics of competition strategy.”).
the Federal Trade Commission can enforce both the civil and criminal provisions of the
Sherman Act. Private parties have potential civil causes of civil actions.2
The HKE chips have a component manufactured by Huawei Technologies Co., Ltd. Huawei is a
major Chinese Company that does business internationally. It is involved in many aspects of
technology and the communications industry. For purposes of this fact pattern, assume that
Huawei manufacturers a component that HKE uses when manufacturing its chips. The
integration of Huawei’s component takes place where HKE’s chips are made in China.
Memphis is the site of HKE, U.S. which is a wholly owned subsidiary of HKE. Memphis was
selected as the site because it is in the heartland of the United States. Its overland trucking is
some of the best in the nation because of the number of truck terminals that are primarily on
the south and southwest sides of Memphis. If necessary, the chips are shipped by air via
Federal Express which has its headquarters and primary air shipping operations in Memphis.
Revenue from all U.S. sales of HKE’s chips is paid into HKE, US for deposit in a U.S.
correspondence bank in Memphis for later transmittal to the Bank of China. The money is
transferred electronically by “wire” to HKE’s account in the Bank of China.
Because of the development of the tech industry in Memphis and the number of corporate
headquarters that have located there, many of HKE’s chips are integrated into final products by
HKE’s Memphis customers which fully integrated end products are then sold to Memphis
companies and corporate headquarters in the Memphis area. HKE representatives have
worked with HKE, U.S. representatives over the years and have made customer relations visits
to the HKE/HKE, U.S. customers in the Memphis area as well as businesses in Memphis that buy
the end products into which HKE’s chips have been integrated.
HKE has hired Levi Levinson, (hereafter “Levinson”) to do celebrity endorsement commercials
for it. Levinson is a highly respected citizen of Israel and a well-known and highly respected
person in the high tech industry internationally, to include the U.S. In HKE’s commercials,
Levinson highly touts the quality of HKE’s chips and says that his experience in the tech world
has taught him to use the highest quality products in all of his technology equipment. He then
comments in the commercials that HKE’s chips are the best in the world; that he always makes
sure that he uses products into which HKE’s chips have been integrated; and that HKE’s chips
will help protect against any cyber attacks. Your company places a great amount of weight on
Levinson’s opinions and recommendations.
Your company does a lot of work with the U.S. government and, therefore, at least partly
because of Levinson’s endorsement of the HKE chips and their ability to counter cyber hacking,
your company switched to a supplier of end products into which the HKE chips have been
integrated. You sell end products into which the HKE chips have been integrated to the
See generally, Kevin Ryan, et al, Antitrust, 54 AM. CRIM. L.REV. 987 (2017); Foreign Trade Antitrust Improvements
Act of 1982, 15 U.S.C. § 6a (2012).
government for use in highly sensitive short-range anti-personnel weapons. These weapons
are “Top Secret” and all components going into them are, likewise, covered by a “Top Secret”
Your company is not aware of HKE’s use of the Huawei components Your company simply buy’s
the end products into which the HKE chips have been integrated for use in the above described
military equipment. As it turns out, because of the potential for industrial espionage and
national security, the U.S. State Department had issued a directive that no element of Huawei’s
products are to be used in any product(s) produced by any government contractor making or
assembling any equipment for military use. Your company was not aware of this directive.
Your CEO learns that the end products that you have sold to the U.S. government and that have
been used on the weapon system project have been hacked by Russian military officials in a
coordinated cyber attack and that the Top Secret information has now been stolen by Russian
military officials.4 They were fully familiar with the Huawai components in HKE’s chips and that
is how they accessed the chips and the end products into which your chips had been integrated.
Due to this devastating breach of security, the government has terminated its contract with
your company. The Department of Justice (“DOJ”) has also started a criminal investigation of
your company. Both from the loss of the government contract and the costs associated with
the DOJ investigation (discovery costs, counsel fees, etc.) the economic loss to your company
will be approximately $200 million.
You are the Director of Customer Relations. You are also an attorney and you work closely with
your company’s General Counsel. The Chairman of your company’s board calls you in and asks
for your perspectives about potential litigation against those responsible. You need to respond.
What are the potential causes of action? What are the legal rules and principles that would be
applicable to those causes of action? Against whom could those causes of action be filed? You
do not need to go through a full IRAC analysis. Just provide your perspectives on these
question areas.
Fortunately, Hillary Clinton was not Secretary of State at this time and, therefore, she was not sending e-mails
through her home server.
In spite of the Mueller investigation, President Trump had nothing to do with this. Andrew Weissman, one of
Mueller’s “bull dog” prosecutors, will no doubt be disappointed.

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