GOSS SUBPOENAS PRESS PURCHASERS

By: Jim Rosenberg Anti-Dumping Suit Enters Discovery Phase


Goss Graphic Systems' lawsuit against German and Japanese competitors entered
the discovery phase late last month, with as many as 19 newspapers receiving
subpoenas for documents related to their printing press purchases. Meanwhile, a
World Trade Organization (WTO) arbitrator's ruling announced last week may have
a bearing on the ultimate disposition of the case.

In a case earlier resolved administratively in its favor, Goss one year ago
filed suit in U.S. District Court in Cedar Rapids, Iowa - site of its
assembly plant - under the 1916 Anti-dumping Act, blaming defendants MAN
Roland, Koenig & Bauer AG (KBA), Mitsubishi Heavy Industries, Tokyo Kikai
Seisakusho (TKS), and their U.S. affiliates for its 1999 bankruptcy. Rarely and
never successfully invoked, the law allows recovery of damages in civil court.

Goss alleges that despite the success of its 1995 petitions for dumping and
injury determinations by the U.S. Commerce Department and International Trade
Commission, and subsequent imposition of duties, the defendants continued to
dump foreign-made equipment in the United States and to injure Goss' business.
Goss Marketing Vice President Barbara L. Gora said no court date has been set
and that the company will not comment on litigation.

The case was delayed last spring when Goss moved to disqualify KBA counsel from
the firm Kirkland & Ellis on the grounds that its lawyers' work for Goss on
other matters represented a conflict of interest. "We had to drop Kirkland
representation," said KBA North America President Scott Smith, adding that the
case seemed to be proceeding slowly, with discovery just starting, a year after
the suit was filed.

But now, "calls from newspapers concerned about subpoenas," said MAN Vice
President Vince Lapinski, "shows that it's going pretty fast, faster than
expected."

"We have heard that they're going to be here [on March 1], and they're going to
subpoena ... all records that led up to the decision to purchase a particular
press," said Jerry LaCamp, production manager at The Register-Guard,
Eugene, Ore., among Mitsubishi's first U.S. newspaper customers. "We supplied
most of this ... once before." But last Thursday "no one came in," LaCamp said.
"So I'm going to make some copies of a few things" for Goss' attorney, who
sought to "exchange some documents."

Mary Ann Werner, vice president and counsel at The Washington Post,
confirmed receiving a subpoena Feb. 22. As in Eugene and elsewhere, the subpoena
sought documents, not depositions. The Post sale, Mitsubishi's last in
the United States and the largest in recent years, sparked the 1995 anti-dumping
petition. (Goss later persuaded the government to exempt from anti-dumping
duties presses identical to the Post's - without identifying the
buyer.)

The Geneva-based WTO ruled last year that provisions of the anti-dumping law are
inconsistent with U.S. obligations under the Uruguay Round of international
trade agreements, which permits only import duties, whereas the law provides for
criminal penalties, including imprisonment, in addition to treble damages and
legal fees. Goss' complaint specifies no sum for damages. Trade pact signatories
must amend or repeal laws to conform to the agreements or risk retaliation by
other nations.

The WTO announced last Wednesday that its arbitrator had specified July 26 as
the deadline for compliance. But prompt resolution of the matter, said TKS
attorney Yoshihiro Saito, with the Seattle firm Perkins Coie, will face
"political as well as procedural impediments" - for example, the new U.S.
Congress with its new committee assignments. "Even if Congress repeals the law,"
Saito continued, "is it going to be retroactive or prospective?"

So far, said Saito, the judge seems uninfluenced by WTO concerns. Discovery may
last six months, he said, and though the case could come to trial this year,
there is "not a very strong probability."

If the case makes it to trial, confidential business information put into
evidence will not be made public, said Saito. (Such information used during the
government's 1995-96 dumping investigation was withheld from the record.)
Disclosure or sealing will be discussed with the judge when documents are
submitted as evidence.

Saito said he is relying on an established judicial interpretation of the 1916
law as an antitrust rather than an anti-dumping statute, and has asked for a
directed verdict that will dismiss the suit. "We don't know which way this judge
is going to go," he said. "Goss is opposing our argument that this is an
antitrust action."

Saito said "the court should stay the proceeding pending congressional action"
with respect to the WTO ruling. The judge, he added, has taken his suggestion
under advisement.



Jim Rosenberg (tech@editorandpublisher.com) is a senior editor covering newspaper technology for E&P.



Copyright 2001, Editor & Publisher.