Justia International Trade Opinion SummariesArticles Posted in Antitrust & Trade Regulation
Laydon v. Coöperatieve Rabobank U.A., et al.
Plaintiff brought this putative class action against more than twenty banks and brokers, alleging a conspiracy to manipulate two benchmark rates known as Yen-LIBOR and Euroyen TIBOR. Plaintiff brought claims under the Commodity Exchange Act (“CEA”), and the Sherman Antitrust Act, and sought leave to assert claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). The district court dismissed the CEA and antitrust claims and denied leave to add the RICO claims. Plaintiff appealed, arguing that the district court erred by holding that the CEA claims were impermissibly extraterritorial, that he lacked antitrust standing to assert a Sherman Act claim, and that he failed to allege proximate causation for his proposed RICO claims. The Second Circuit affirmed. The court explained that the conduct—i.e., that the bank defendants presented fraudulent submissions to an organization based in London that set a benchmark rate related to a foreign currency—occurred almost entirely overseas. Indeed, Plaintiff fails to allege any significant acts that took place in the United States. Plaintiff’s CEA claims are based predominantly on foreign conduct and are thus impermissibly extraterritorial. Further, the court wrote that the district court also correctly concluded that Plaintiff lacked antitrust standing because he would not be an efficient enforcer of the antitrust laws. Lastly, the court agreed that Plaintiff failed to allege proximate causation for his RICO claims. View "Laydon v. Coöperatieve Rabobank U.A., et al." on Justia Law
Changji Esquel Textile Co. Ltd. v. Gina Raimondo
Acting under the Export Control Reform Act of 2018 (ECRA) the Department of Commerce has maintained a so-called Entity List to restrict designated foreign parties from receiving United States exports. Plaintiff, Changji Esquel Textile Co, operates a spinning mill in Xinjiang. The United States has determined that China abuses the human rights of Uyghurs and other religious or ethnic minorities in Xinjiang, including imprisonment and forced labor. Changji and its parent company filed a lawsuit alleging that the Department, in adding Changji to the Entity List, violated ECRA and its implementing regulations, the APA, and the Due Process Clause. They moved for a preliminary injunction on the theory that the alleged ECRA and regulatory violations were ultra vires. The district court denied the motion on the ground that Plaintiffs are not likely to succeed on this claim. The DC Circuit affirmed. The court explained that to prevail on an ultra vires claim, Plaintiff must establish three things: “(i) the statutory preclusion of review is implied rather than express; (ii) there is no alternative procedure for review of the statutory claim; and (iii) the agency plainly acts in excess of its delegated powers and contrary to a specific prohibition in the statute that is clear and mandatory. The court explained that the canons invoked by Plaintiffs can resolve statutory ambiguity in close cases, but they do not allow the court to discern any clear and mandatory prohibition on adding entities to the List for human-rights abuses, particularly given the breadth of section 4813(a)(16) and the deference owed to the Executive Branch in matters of foreign affairs. View "Changji Esquel Textile Co. Ltd. v. Gina Raimondo" on Justia Law
Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd.
Plaintiffs, American purchasers of bulk Vitamin C, filed a class action alleging that four Chinese exporters of Vitamin C conspired to inflate prices and restrict supply in violation of the Sherman Act and the Clayton Act. The district court denied defendants' motion to dismiss on the basis of the act of state doctrine, foreign sovereign compulsion, and international comity. After the district court denied defendants' motion for summary judgment, the case proceeded to trial where all defendants settled except for Hebei and its parent company NCPG. Following the jury verdict, the district court entered treble damages against Hebei and NCPG and denied their renewed motion for judgment as a matter of law. The Second Circuit reversed. The Supreme Court then reversed the Second Circuit's judgment and remanded.On remand from the Supreme Court, the Second Circuit once again concluded that this case should be dismissed on international comity grounds. Giving careful consideration but not conclusive deference to the views of the Ministry of Commerce of the People's Republic of China, the court read the relevant Chinese regulations—as illuminated by contemporaneous administrative documents and industry reports—to have required defendants to collude on Vitamin C export prices and quantities as part and parcel of China's export regime for Vitamin C. The court balanced this true conflict between U.S. and Chinese law together with other established principles of international comity, declining to construe U.S. antitrust law to reach defendants' conduct. Accordingly, the court reversed and remanded with instructions to dismiss the case. View "Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd." on Justia Law
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
Organik Kimya v. International Trade Commission
Organik and Dow both manufacture opaque polymers, hollow spheres used as additives to increase paint’s opacity. Dow has maintained its worldwide market-leader position through a combination of patent and trade-secret protections. Dow filed a complaint with the International Trade Commission requesting an investigation into whether Organik’s opaque polymer products infringed four Dow patents. The Commission granted Dow’s request, and the parties began discovery. During the proceedings, Dow amended its complaint to add allegations of trade secret misappropriation when it discovered that Organik may have coordinated the production of its opaque polymers with the assistance of former Dow employees. As Dow attempted to obtain discovery relating to the activities of those employees, Dow discovered spoliation of evidence “on a staggering scale.” The Federal Circuit affirmed the Commission’s imposition of default judgment and entry of a limited exclusion order against Organik as sanctions for the spoliation of evidence. Organik’s “willful, bad faith misconduct” deprived Dow of its ability to pursue its trade secret misappropriation claim effectively. The record supports the limited exclusion order of 25 years with the opportunity for Organik to bypass that order at any time if it can show that it has developed its opaque polymers without using Dow’s misappropriated trade secrets. View "Organik Kimya v. International Trade Commission" on Justia Law
Energy Conversion Devices Liquidation Trust v. Trina Solar Ltd.
The defendant companies, based in China, produce conventional solar energy panels. Energy Conversion and other American manufacturers produce the newer thin-film panels. The Chinese producers sought greater market shares. They agreed to export more products to the U.S. and to sell them below cost. Several entities supported their endeavor. Suppliers provided discounts, a trade association facilitated cooperation, and the Chinese government provided below-cost financing. From 2008-2011, the average selling prices of their panels fell over 60%. American manufacturers consulted the Department of Commerce, which found that the Chinese firms had harmed American industry through illegal dumping and assessed substantial tariffs. The American manufacturers continued to suffer; more than 20 , including Energy Conversion, filed for bankruptcy or closed. Energy Conversion sued under the Sherman Act, 15 U.S.C. 1, and Michigan law, seeking $3 billion in treble damages, claiming that the Chinese companies had unlawfully conspired “to sell Chinese manufactured solar panels at unreasonably low or below cost prices . . . to destroy an American industry.” Because this allegation did not state that the Chinese companies could or would recoup their losses by charging monopoly prices after driving competitors from the field, the court dismissed the claim. The Sixth Circuit affirmed. Without such an allegation or any willingness to prove a reasonable prospect of recoupment, the court correctly rejected the claim. View "Energy Conversion Devices Liquidation Trust v. Trina Solar Ltd." on Justia Law
In re: Auto. Antitrust Cases I and II
In 2003, several class action lawsuits were filed against automobile manufacturers and trade associations, alleging antitrust conspiracy, Bus. & Prof. Code, 167201, and unfair business practices, Bus. & Prof. Code, 17200, on behalf of individuals who purchased or leased new vehicles in California within a certain time period. The lawsuits, which were eventually coordinated, alleged conspiracy to restrict the movement of lower-priced Canadian vehicles into the U.S. market, to avoid downward pressure on U.S. new vehicle prices. After years of litigation, the court granted summary judgment in favor of the two remaining defendants, Ford U.S. and Ford Canada, concluding that there was not sufficient evidence of an actual agreement among Ford and the other manufacturers to restrict the export of new vehicles from Canada to the U.S. The court of appeal affirmed with respect to Ford U.S., but concluded that the admissible evidence was sufficient to demonstrate a material factual issue as to whether Ford Canada participated in an illegal agreement to restrict the export of automobiles. The court noted an expert economic analysis indicating that the manufacturers would not have continued to restrict exports during the alleged conspiracy period absent an agreement that none of them would break ranks and reap the profits available in the export market; parallel conduct by the manufactures during the same period; and deposition testimony. View "In re: Auto. Antitrust Cases I and II" on Justia Law
Superior Prod. P’shp v. Gordon Auto Body Parts Co.
Gordon Auto Body Parts, a Taiwanese company, was one of several early entrants into the U.S. market for replacement truck hoods. PBSI eventually entered the market for certain replacement hoods but found that it could not match the prices of Gordon and other Taiwanese firms, with which Gordon had participated in joint ventures. Believing that Gordon and the other firms were conspiring to drive it out of business with predatory prices, PBSI brought antitrust claims against Gordon. The district court granted Gordon summary judgment. The Sixth Circuit affirmed, finding that PBSI failed to make any showing that Gordon’s prices were below an appropriate measure of cost. View "Superior Prod. P'shp v. Gordon Auto Body Parts Co." on Justia Law
United States v. Hsiung
This criminal antitrust case stems from an international conspiracy between Taiwanese and Korean electronics manufacturers to fix prices for TFT-LCDs. Defendants, AUO, a Taiwanese company, and AUOA, AUO's retailer and wholly owned subsidiary (collectively, "the corporate defendants"), and two executives were convicted of conspiracy to fix prices in violation of the Sherman Act, 15 U.S.C. 1 et seq. The court concluded that venue in the Northern District of California was proper; defendants waived their jury instruction challenge regarding the extraterritoriality of the Sherman Act; the price-fixing scheme as alleged and proved is subject to per se analysis under the Sherman Act; the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. 6a, does not limit the power of the federal courts, but rather, it provides substantive elements under the Sherman Act in cases involving nonimport trade with foreign nations; the FTAIA does not apply to defendants' import trade conduct because the government sufficiently pleaded and proved that the conspirators engaged in import commerce with the United States and that the price-fixing conspiracy violated section 1 of the Sherman Act; there was no constructive amendment because the facts in the indictment necessarily supported the domestic effects claim; the evidence offered in support of the import trade theory alone was sufficient to convict defendants of price-fixing in violation of the Sherman Act; the unambiguous language of the Alternative Fine Statute, 18 U.S.C. 3571(d), permitted the district court to impose the $500 million fine based on the gross gains to all the coconspirators; and no statutory authority or precedent supports AUO's interpretation of the Alternative Fine Statute as requiring joint and several liability and imposing a "one recovery" rule. Accordingly, the court affirmed the judgment of the district court. View "United States v. Hsiung" on Justia Law
Motorola Mobility LLC v. AU Optronics Corp.
Motorola and its foreign subsidiaries buy LCD panels and incorporate them into cellphones. They alleged that foreign LCD panel manufacturers violated section 1 of the Sherman Act, 15 U.S.C. 1, by fixing prices. Only about one percent of the panels were bought by Motorola in the U.S. The other 99 percent were bought by, paid for, and delivered to foreign subsidiaries; 42 percent of the panels were bought by subsidiaries and incorporated into products that were shipped to Motorola in the U.S. for resale. The other 57 percent were incorporated into products that were sold abroad and never became U.S. domestic commerce, subject to the Sherman Act. The district judge ruled that Motorola’s claim regarding the 42 percent was barred by 15 U.S.C. 6a(1)(A): the Act “shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless such conduct has a direct, substantial, and reasonably foreseeable effect on trade or commerce which is not trade or commerce with foreign nations, or on import trade or import commerce with foreign nations.” The Seventh Circuit affirmed, reasoning that rampant extraterritorial application of U.S. law “creates a serious risk of interference with a foreign nation’s ability independently to regulate its own commercial affairs.” View "Motorola Mobility LLC v. AU Optronics Corp." on Justia Law