Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co.

Purchasers of vitamin C filed suit, alleging that Chinese exporters had agreed to fix the price and quantity of vitamin C exported to the U.S., in violation of the Sherman Act. The exporters unsuccessfully moved to dismiss the complaint and later sought summary judgment, arguing that Chinese law required them to fix the price and quantity of exports, shielding them from liability under U.S. antitrust law. China’s Ministry of Commerce, the authority authorized to regulate foreign trade, asserted that the alleged conspiracy was actually a pricing regime mandated by the Chinese Government. The purchasers countered that the Ministry had identified no law or regulation requiring the agreement; highlighted a publication announcing that the sellers had agreed to control the quantity and rate of exports without government intervention; and noted China’s statement to the World Trade Organization that it ended its export administration of vitamin C in 2002. The Second Circuit reversed a verdict for the purchasers, stating that federal courts are “bound to defer” to the foreign government’s construction of its own law, whenever that construction is “reasonable.” The Supreme Court vacated. A federal court determining foreign law under Federal Rule of Civil Procedure 44.1 should accord respectful consideration to a foreign government’s submission, but is not bound to accord conclusive effect to such statements. Relevant considerations include the clarity, thoroughness, and support of the foreign government's statement; its context and purpose; the transparency of the foreign legal system; the role and authority of the entity or official offering the statement; and the statement’s consistency with the foreign government’s past positions. Determination of foreign law must be treated as a question of law; courts are not limited to materials submitted by the parties, but “may consider any relevant material or source.” View "Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co." on Justia Law