Justia International Law Opinion SummariesArticles Posted in Antitrust & Trade Regulation
PDVSA US Litigation Trust v. Lukoil Pan Americas LLC, et al.
This appeal involves a nonjusticiable political question: who has the authority to litigate in the name of the Venezuelan state oil company, Petróleos de Venezuela, S.A. The underlying action, brought by a litigation trust on behalf of Petróleos de Venezuela, alleged conspiracy, antitrust, cybercrime, and fraud claims against various individuals and entities. After the district court dismissed the action for lack of standing and the Eleventh Circuit affirmed, an entity purporting to speak for Petróleos de Venezuela sought to substitute itself as the real party in interest. The entity’s board was appointed by Nicolás Maduro, who claims to be the president of Venezuela. But the United States Department of State has concluded that Maduro is not Venezuela’s legitimate political leader. The Eleventh Circuit affirmed because the district court could not grant the motion without addressing a nonjusticiable political question. The district court cannot question the validity of then-President Guaidó’s appointment of an alternative board of directors. So, under the political-question doctrine, it was powerless to grant the Maduro entity’s motion to substitute the entity as the real party in interest in contravention of the position taken by the United States Department of State. Further, the court wrote that the district court would not have jurisdiction to conduct the requested inquiry on remand. And even if the Department of State declared today that the Maduro entity is authorized to bring suit in Petróleos de Venezuela’s name, the court would still affirm because, under Article III, a justiciable case or controversy must exist “through all stages of the litigation,” including “at the time the complaint is filed.” View "PDVSA US Litigation Trust v. Lukoil Pan Americas LLC, et al." on Justia Law
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. He claimed that he was injured after purchasing and trading a Euroyen TIBOR futures contract on a U.S.-based commodity exchange because the value of that contract was based on a distorted, artificial 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 fraudulent submissions to an organization based in London that set a benchmark rate related to a foreign currency—occurred almost entirely overseas. Here Plaintiff failed 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. As such, the district court also correctly concluded that Plaintiff lacked antitrust standing because he would not be an efficient enforcer of the antitrust laws. Finally, Plaintiff failed to allege proximate causation for his RICO claims. View "Laydon v. Coöperatieve Rabobank U.A., et al." on Justia Law
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
Celestin v. Caribbean Air Mail, Inc.
Plaintiffs filed a putative class action alleging that Haitian government officials and multinational corporations conspired to fix the prices of remittances and telephone calls from the United States to Haiti. Plaintiffs allege a price-fixing claim under the Sherman Act and related state law claims, alleging that defendants agreed to produce official instruments (a Presidential Order and two Circulars of the Bank of the Republic of Haiti) to disguise their agreement as a tax for domestic education programs.The Second Circuit held that the act of state doctrine does not bar adjudication of a claim merely because that claim turns on the "propriety" of the official acts of a foreign sovereign. Instead, the doctrine forecloses a claim only if it would require a court to declare that an official act of a foreign sovereign is invalid, i.e., to deny the act legal effect. In this case, even assuming the Presidential Order and Circulars have their full purported legal effect under Haitian law, the court concluded that plaintiffs' antitrust claim under U.S. federal law remains cognizable. Accordingly, the court reversed the district court's dismissal of the antitrust claim under the act of state doctrine and vacated the dismissal of the fifteen state law claims for reanalysis under the proper standard. The court also vacated the dismissal on the alternative grounds of forum non conveniens because the district court did not give due deference to U.S.-resident plaintiffs' choice of forum. The court remanded for further proceedings. View "Celestin v. Caribbean Air Mail, Inc." on Justia Law
Hetronic International v. Hetronic Germany GmbH, et al.
Hetronic International, Inc., a U.S. company, manufactured radio remote controls, the kind used to remotely operate heavy-duty construction equipment. Defendants, none of whom were U.S. citizens, distributed Hetronic’s products, mostly in Europe. After about a ten-year relationship, one of Defendants’ employees stumbled across an old research-and-development agreement between the parties. Embracing a “creative legal interpretation” of the agreement endorsed by Defendants’ lawyers, Defendants concluded that they owned the rights to Hetronic’s trademarks and other intellectual property. Defendants then began manufacturing their own products—identical to Hetronic’s—and selling them under the Hetronic brand, mostly in Europe. Hetronic terminated the parties’ distribution agreements, but that didn’t stop Defendants from making tens of millions of dollars selling their copycat products. Hetronic asserted numerous claims against Defendants, but the issue presented on appeal to the Tenth Circuit centered on its trademark claims under the Lanham Act. A jury awarded Hetronic over $100 million in damages, most of which related to Defendants’ trademark infringement. Then on Hetronic’s motion, the district court entered a worldwide injunction barring Defendants from selling their infringing products. Defendants ignored the injunction. In the district court and before the Tenth Circuit, Defendants focused on one defense in particular: Though they accepted that the Lanham Act could sometimes apply extraterritorially, they insisted the Act’s reach didn’t extend to their conduct, which generally involved foreign defendants making sales to foreign consumers. Reviewing this matter as one of first impression in the Tenth Circuit, and after considering the Supreme Court’s lone decision on the issue and persuasive authority from other circuits, the Tenth Circuit concluded the district court properly applied the Lanham Act to Defendants’ conduct. But the Court narrowed the district court’s expansive injunction. Affirming in part, and reversing in part, the Court remanded the case for further consideration. View "Hetronic International v. Hetronic Germany GmbH, et al." 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
United States v. Nitek Elecs., Inc.
Between 2001 and 2004, Nitek Electronics, Inc. entered thirty-six shipments of pipe fitting components used for gas meters into the United States from China. U.S. Customs and Border Protection (“Customs”) claimed that the merchandise was misclassified and issued Nitek a final penalty claim stating that the tentative culpability was gross negligence. Customs then referred the matter to the United States Department of Justice (“Government”) to bring a claim against Nitek in the Court of International Trade to enforce the penalty. The Government brought suit against Nitek to recover lost duties, antidumping duties, and a penalty based on negligence under 19 U.S.C. 1592. Nitek moved to dismiss the case for failure to state a claim. The court denied dismissal of the claims to recover lost duties and antidumping duties but did dismiss the Government’s claim for a penalty based on negligence, concluding that the Government had failed to exhaust all administrative remedies under 19 U.S.C. 1592 by not having Customs demand a penalty based on negligence, instead of gross negligence. The Federal Circuit affirmed, holding that the statutory framework of section 1592 does not allow the Government to bring a penalty claim based on negligence in court because such a claim did not exist at the administrative level. View "United States v. Nitek Elecs., Inc." on Justia Law
Simens Energy, Inc. v. United States, Wind Tower Trade Coalition
The Department of Commerce determined that utility scale wind towers from the People’s Republic of China and utility scale wind towers from the Socialist Republic of Vietnam (together, the subject merchandise) were sold in the United States at less than fair value and that it received countervailable subsidies. The International Trade Commission made a final affirmative determination of material injury to the domestic industry. The determination was by divided vote of the six-member Commission. The Court of International Trade upheld the Commission’s affirmative injury determination. Siemens Energy, Inc., an importer of utility scale wind towers, challenged the determination. The issues on appeal concerned the interpretation and effect of the divided vote. The Federal Circuit affirmed, holding that the Court of International Trade properly upheld the Commission’s affirmative injury determination. View "Simens Energy, Inc. v. United States, Wind Tower Trade Coalition" on Justia Law
Minn-Chem, Inc. v. Agrium, Inc.
Most of the world's reserves of potash, a mineral used primarily in fertilizer, are in Canada, Russia, and Belarus. Defendants are producers with mines in those countries. Plaintiffs are direct and indirect potash purchasers in the U.S. They allege that producers operated a cartel through which they fixed prices in Brazil, China, and India, and that inflated prices in those markets influenced the price of potash in the U.S. Defendants moved to dismiss, arguing that the district court lacked jurisdiction under the Foreign Trade Antitrust Improvements Act, 15 U.S.C. 6a. The district court denied the motion. The Seventh Circuit affirmed. The world market for potash is highly concentrated and U.S. customers account for a high percentage of sales. This is not a “House-that-Jack-Built situation in which action in a foreign country filters through many layers and finally causes a few ripples” in the U.S. Foreign sellers allegedly created a cartel, took steps outside the U.S. to drive the price up of a product that is wanted in the U.S., and, after succeeding, sold that product to U.S. customers. The payment of overcharges by those customers was objectively foreseeable, and the amount of commerce is substantial. View "Minn-Chem, Inc. v. Agrium, Inc." on Justia Law