Can A Foreign Defendant's Conduct Satisfy The FTAIA But Not The Due Process Clause?

Authored by Robert Reznick and David M. Goldstein

In Sullivan v. Barclays PLC,1 Judge P. Kevin Castel, of the Southern District of New York, raised an interesting point regarding the relationship between the viability of antitrust claims subject to the Foreign Trade Antitrust Improvement Act (FTAIA) and constitutional requirements for personal jurisdiction: The FTAIA "arguably may apply a less-exacting standard than the due process threshold to exercise personal jurisdiction over a foreign defendant."2 In other words, even though the standard for the FTAIA might be met to allow an antitrust claim to proceed against a foreign defendant, the court nonetheless might not be able to assert personal jurisdiction. The question whether the FTAIA should be read more strictly than has been the case to conform to due process requirements, or that foreign defendants should be more diligent in challenging personal jurisdiction, are interesting ones that warrant further analysis.

Sullivan is a purported class action involving allegations that a number of banks—many foreign—conspired to manipulate the Euro Interbank Offered Rate (Euribor"), a benchmark used in price or payment terms for certain financial instruments. Judge Castel's decision on defendants' motion to dismiss principally addressed issues of standing, personal jurisdiction, and whether the complaint alleged a plausible restraint of trade and injury.3 The Court ultimately found that complaint alleged no facts supporting the assertion of personal jurisdiction against a group of foreign defendants and dismissed them from the case.

The Court addressed the FTAIA only in passing, noting pointedly that the defendants devoted less than a page to it and finding that the specific arguments advanced by the defendants were not well-founded.4 In a footnote, though, Judge Castel suggested, seemingly sua sponte, that the FTAIA standard for domestic effects may be "less exacting" than required by due process for the court to exercise personal jurisdiction.5 And, indeed, Judge Castel found that although plaintiffs' claims against the foreign defendants were not blocked by the FTAIA, the complaint's allegations did not establish personal jurisdiction over them.

The Court's observation regarding the potentially different standards was explained only through a "See generally" citation to Waldman v. Palestine Liberation Org.,6 a case involving personal jurisdiction under the Anti-Terrorism Act, 18 U.S. C. §...