Supreme Court Docket Report, October Term, 2003 - Number 6

By Richard B. Katskee (Washington)

On December 15, 2003, the Supreme Court granted certiorari in two cases of potential interest to the business community, including one case in which Mayer, Brown, Rowe & Maw LLP represents one of the petitioners. Amicus briefs in support of the petitioners are due on Thursday, January 29, 2004, and amicus briefs in support of the respondents are due on Thursday, March 4, 2004.

1. Antitrust - Extraterritorial Reach of the Sherman Act. The Court granted review in F. Hoffmann-La Roche Ltd. v. Empagran, S.A., No. 03-724, to decide whether U.S. antitrust law provides a remedy for injuries not incurred in U.S. commerce.

The Sherman Act prohibits restraints of trade or commerce within the United States or with foreign nations. 15 U.S.C. 1. In 1982, Congress clarified the Sherman Act's extraterritorial scope by enacting the Foreign Trade Antitrust Improvements Act, 15 U.S.C. 6a ("FTAIA"). The FTAIA states that the antitrust laws shall not apply to non-import commerce with foreign nations unless (1) the conduct at issue has a "direct, substantial, and reasonably foreseeable effect" on domestic commerce and (2) that domestic effect "gives rise to a claim" under the Sherman Act. It is the second prong of that test that is at issue in this case.

The plaintiffs are five foreign companies located in Australia, Ecuador, Panama, and the Ukraine. They allege that a cartel of European and Asian distributors of bulk vitamins conspired to fix prices and allocate markets on a global basis in violation of the Sherman Act, causing supracompetitive prices in both the United States and foreign countries. However, all of the plaintiffs' purchases took place in foreign countries. The question before the Court is whether purchasers abroad who were not injured by higher prices in the U.S. can bring U.S. antitrust claims in U.S. courts.

This question has sharply divided the courts of appeals. In Den Norske Stats Oljeselskap AS v. HeereMac v.o.f., 241 F.3d 420, 428 (5th Cir. 2001), the Fifth Circuit held that the Sherman Act does not extend to claims arising from injuries incurred solely in foreign commerce. In that case, a Norwegian oil company alleged that a price-fixing conspiracy by barge companies violated the Sherman Act by inflating both the plaintiff's operating costs in the North Sea and oil prices in the U.S. market. Because the plaintiff's claim arose exclusively from its North Sea contracting and not from any impact of the conspiracy on U.S. commerce, the court held that the plain language of the FTAIA precluded subject matter jurisdiction over the plaintiff's claim.

The Second Circuit created a circuit split in Kruman v. Christie's Int'l PLC, 284 F.3d 384, 397-398 (2d Cir. 2002), by authorizing plaintiffs who allegedly paid fixed commission prices only in foreign auctions to sue the auction houses under the Sherman Act. The Third Circuit reached a different result in Turicentro, S.A. v. American Airlines, Inc., 303 F.3d 293, 307 (3d Cir. 2002), holding that foreign travel agents lacked standing to bring antitrust claims alleging fixed airline commissions...