OPINION OF THE COURT
F. HOFFMANN-LA ROCHE LTD. V. EMPAGRAN S.A.
542 U. S. ____ (2004)
SUPREME COURT OF THE UNITED STATES
NO. 03-724
F. HOFFMANN-La ROCHE LTD., et al., PETITIONERS
v. EMPAGRAN S.A. et al.
on writ of certiorari to the united states court of
appeals for the district of columbia circuit
[June 14, 2004]
Justice Breyer delivered the
opinion of the Court.
The Foreign Trade Antitrust
Improvements Act of 1982 (FTAIA) excludes from the Sherman Act’s
reach much anticompetitive conduct that causes only foreign injury.
It does so by setting forth a general rule stating that the Sherman
Act “shall not apply to conduct involving trade or commerce … with
foreign nations.” 96 Stat. 1246, 15 U. S. C. §6a. It then
creates exceptions to the general rule, applicable where (roughly
speaking) that conduct significantly harms imports, domestic
commerce, or American exporters.
We here focus upon anticompetitive
price-fixing activity that is in significant part foreign, that
causes some domestic antitrust injury, and that independently
causes separate foreign injury. We ask two questions about the
price-fixing conduct and the foreign injury that it causes. First,
does that conduct fall within the FTAIA’s general rule excluding
the Sherman Act’s application? That is to say, does the
price-fixing activity constitute “conduct involving trade or
commerce … with foreign nations”? We conclude that it does.
Second, we ask whether the conduct nonetheless
falls within a domestic-injury exception to the general rule, an
exception that applies (and makes the Sherman Act nonetheless
applicable) where the conduct (1) has a “direct, substantial, and
reasonably foreseeable effect” on domestic commerce, and (2) “such
effect gives rise to a [Sherman Act] claim.” §§6a(1)(A), (2). We
conclude that the exception does not apply where the plaintiff’s
claim rests solely on the independent foreign harm.
To clarify: The issue before us concerns (1)
significant foreign anticompetitive conduct with (2) an adverse
domestic effect and (3) an independent foreign effect giving rise
to the claim. In more concrete terms, this case involves vitamin
sellers around the world that agreed to fix prices, leading to
higher vitamin prices in the United States and independently
leading to higher vitamin prices in other countries such as
Ecuador. We conclude that, in this scenario, a purchaser in the
United States could bring a Sherman Act claim under the FTAIA based
on domestic injury, but a purchaser in Ecuador could not bring a
Sherman Act claim based on foreign harm.
I
The plaintiffs in this case
originally filed a class-action suit on behalf of foreign and
domestic purchasers of vitamins under,
inter alia, §1 of
the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. §1, and
§§4 and 16 of the Clayton Act, 38 Stat. 731, 737, as amended, 15 U.
S. C. §§15, 26. Their complaint alleged that petitioners,
foreign and domestic vitamin manufacturers and distributors, had
engaged in a price-fixing conspiracy, raising the price of vitamin
products to customers in the United States and to customers in
foreign countries.
As relevant here, petitioners
moved to dismiss the suit as to the
foreign purchasers
(the respondents here), five foreign vitamin distributors located
in Ukraine, Australia, Ecuador, and Panama, each of which bought
vitamins from petitioners for delivery outside the United States.
2001 WL 761360, *4 (D. D. C., June 7, 2001) (describing the
relevant transactions as “wholly foreign”). Respondents have never
asserted that they purchased any vitamins in the United States or
in transactions in United States commerce, and the question
presented assumes that the relevant “transactions occurr[ed]
entirely outside U. S. commerce.” The District Court dismissed
their claims.
Ibid. It applied the FTAIA and found none of
the exceptions applicable.
Id., at *3–*4. Thereafter, the
domestic purchasers transferred their claims to another
pending suit and did not take part in the subsequent appeal. 315
F. 3d 338, 343 (CADC 2003).
A divided panel of the Court of Appeals
reversed. 315 F. 3d 338. The panel concluded that the FTAIA’s
general exclusionary rule applied to the case, but that its
domestic-injury exception also applied. It basically read the
plaintiffs’ complaint to allege that the vitamin manufacturers’
price-fixing conspiracy (1) had “a direct, substantial, and
reasonably foreseeable effect” on ordinary domestic trade or
commerce,
i.e., the conspiracy brought about higher
domestic vitamin prices, and (2) “such effect” gave “rise to a
[Sherman Act] claim,”
i.e., an injured
domestic
customer could have brought a Sherman Act suit, 15 U. S. C.
§§6a(1), (2). Those allegations, the court held, are sufficient to
meet the exception’s requirements. 315 F. 3d, at 341.
The court assumed that the foreign effect,
i.e., higher prices in Ukraine, Panama, Australia, and
Ecuador, was independent of the domestic effect,
i.e.,
higher domestic prices.
Ibid. But it concluded that, in
light of the FTAIA’s text, legislative history, and the policy goal
of deterring harmful price-fixing activity, this lack of connection
does not matter.
Ibid. The District of Columbia Circuit
denied rehearing
en banc by a 4-to-3 vote. App. to Pet.
for Cert. 44a.
We granted certiorari to resolve a split among
the Courts of Appeals about the exception’s application. Compare
Den Norske Stats Oljeselskap As v.
HeereMac Vof,
241 F. 3d 420, 427 (CA5 2001) (exception does not apply where
foreign injury independent of domestic harm), with
Kruman
v.
Christie’s Int’l PLC, 284 F. 3d 384, 400 (CA2 2002)
(exception does apply even where foreign injury independent); 315
F. 3d, at 341 (similar).
II
The FTAIA seeks to make clear to
American exporters (and to firms doing business abroad) that the
Sherman Act does not prevent them from entering into business
arrangements (say, joint-selling arrangements), however
anticompetitive, as long as those arrangements adversely affect
only foreign markets. See H. R. Rep. No. 97–686, pp. 1–3, 9–10
(1982) (hereinafter House Report). It does so by removing from the
Sherman Act’s reach, (1) export activities and (2) other commercial
activities taking place abroad,
unless those activities
adversely affect domestic commerce, imports to the United States,
or exporting activities of one engaged in such activities within
the United States.
The FTAIA says:
“Sections 1 to 7 of this title
[the Sherman Act] shall not apply to conduct involving trade or
commerce (other than import trade or import commerce) with foreign
nations unless—
“(1) such conduct has a direct, substantial,
and reasonably foreseeable effect—
“(A) on trade or commerce which is not trade
or commerce with foreign nations [
i.e., domestic trade or
commerce], or on import trade or import commerce with foreign
nations; or
“(B) on export trade or export commerce with
foreign nations, of a person engaged in such trade or commerce in
the United States [
i.e., on an American export
competitor]; and
(2) such effect gives rise to a claim under
the provisions of sections 1 to 7 of this title, other than this
section.
“If sections 1 to 7 of this title apply to such conduct only
because of the operation of paragraph (1)(B), then sections 1 to 7
of this title shall apply to such conduct only for injury to export
business in the United States.” 15 U. S. C. §6a.
This technical language initially
lays down a general rule placing
all (non-import) activity
involving foreign commerce outside the Sherman Act’s reach. It then
brings such conduct back within the Sherman Act’s reach
provided that the conduct
both (1) sufficiently
affects American commerce,
i.e., it has a “direct,
substantial, and reasonably foreseeable effect” on American
domestic, import, or (certain) export commerce,
and (2)
has an effect of a kind that antitrust law considers harmful,
i.e., the “effect” must “giv[e] rise to a [Sherman Act]
claim.” §§6a(1), (2).
We ask here how this language applies to
price-fixing activity that is in significant part foreign, that has
the requisite domestic effect, and that also has independent
foreign effects giving rise to the plaintiff’s claim.
III
Respondents make a threshold
argument. They say that the transactions here at issue fall outside
the FTAIA because the FTAIA’s general exclusionary rule applies
only to conduct involving exports. The rule says that the Sherman
Act “shall not apply to conduct involving trade or commerce (other
than import trade or import commerce)
with foreign
nations.” §6a (emphasis added). The word “with” means
between the United States and foreign nations. And, they
contend, commerce between the United States and foreign nations
that is not import commerce must consist of export commerce—a kind
of commerce irrelevant to the case at hand.
The difficulty with respondents’
argument is that the FTAIA originated in a bill that initially
referred only to “export trade or export commerce.” H. R.
5235, 97th Cong., 1st Sess., §1 (1981). But the House Judiciary
Committee subsequently changed that language to “trade or commerce
(other than import trade or import commerce).” 15 U. S. C.
§6a. And it did so deliberately to include commerce that did not
involve American exports but which was wholly foreign.
The House Report says in relevant part:
“The Subcommittee’s ‘export’ commerce limitation
appeared to make the amendments inapplicable to transactions that
were neither import nor export,
i.e., transactions within,
between, or among other nations… .
Such foreign
transactions should, for the purposes of this legislation, be
treated in the same manner as export transactions—that is,
there should be no American antitrust jurisdiction absent a direct,
substantial and reasonably foreseeable effect on domestic commerce
or a domestic competitor. The Committee Amendment therefore deletes
references to ‘export’ trade, and substitutes phrases such as
‘other than import’ trade.
It is thus clear that wholly foreign
transactions as well as export transactions are covered by the
amendment, but that import transactions are not.” House Report
9–10 (emphases added).
For those who find legislative
history useful, the House Report’s account should end the matter.
Others, by considering carefully the amendment itself and the lack
of any other plausible purpose, may reach the same conclusion,
namely that the FTAIA’s general rule applies where the
anticompetitive conduct at issue is foreign.
IV
We turn now to the basic question
presented, that of the exception’s application. Because the
underlying antitrust action is complex, potentially raising
questions not directly at issue here, we reemphasize that we base
our decision upon the following: The price-fixing conduct
significantly and adversely affects both customers outside the
United States and customers within the United States, but the
adverse foreign effect is independent of any adverse domestic
effect. In these circumstances, we find that the FTAIA exception
does not apply (and thus the Sherman Act does not apply) for two
main reasons.
First, this Court
ordinarily construes ambiguous statutes to avoid unreasonable
interference with the sovereign authority of other nations. See,
e.g.,
McCulloch v.
Sociedad Nacional de
Marineros de Honduras,
372 U. S. 10, 20–22
(1963) (application of National Labor Relations Act to foreign-flag
vessels);
Romero v.
International Terminal Operating
Co.,
358 U. S.
354, 382–383 (1959) (application of Jones Act in maritime
case);
Lauritzen v
. Larsen,
345 U. S. 571, 578
(1953) (same). This rule of construction reflects principles of
customary international law—law that (we must assume) Congress
ordinarily seeks to follow. See Restatement (Third) of Foreign
Relations Law of the United States §§403(1), 403(2) (1986)
(hereinafter Restatement) (limiting the unreasonable exercise of
prescriptive jurisdiction with respect to a person or activity
having connections with another State);
Murray v.
Schooner Charming Betsy, 2 Cranch 64, 118 (1804) (“[A]n
act of Congress ought never to be construed to violate the law of
nations if any other possible construction remains”);
Hartford
Fire Insurance Co. v.
California,
509 U. S. 764, 817
(1993) (Scalia, J., dissenting) (identifying rule of construction
as derived from the principle of “prescriptive comity”).
This rule of statutory construction cautions
courts to assume that legislators take account of the legitimate
sovereign interests of other nations when they write American laws.
It thereby helps the potentially conflicting laws of different
nations work together in harmony—a harmony particularly needed in
today’s highly interdependent commercial world.
No one denies that America’s antitrust laws,
when applied to foreign conduct, can interfere with a foreign
nation’s ability independently to regulate its own commercial
affairs. But our courts have long held that application of our
antitrust laws to foreign anticompetitive conduct is nonetheless
reasonable, and hence consistent with principles of prescriptive
comity, insofar as they reflect a legislative effort to redress
domestic antitrust injury that foreign anticompetitive
conduct has caused. See
United States v.
Aluminum Co.
of America, 148 F. 2d 416, 443–444 (CA2 1945) (L. Hand,
J.); 1 P. Areeda & D. Turner, Antitrust Law ¶ ;236 (1978).
But why is it reasonable to apply those laws
to foreign conduct
insofar as that conduct causes independent
foreign harm and that foreign harm alone gives rise to the
plaintiff’s claim? Like the former case, application of those
laws creates a serious risk of interference with a foreign nation’s
ability independently to regulate its own commercial affairs. But,
unlike the former case, the justification for that interference
seems insubstantial. See Restatement §403(2) (determining
reasonableness on basis of such factors as connections with
regulating nation, harm to that nation’s interests, extent to which
other nations regulate, and the potential for conflict). Why should
American law supplant, for example, Canada’s or Great Britain’s or
Japan’s own determination about how best to protect Canadian or
British or Japanese customers from anticompetitive conduct engaged
in significant part by Canadian or British or Japanese or other
foreign companies?
We recognize that principles of comity provide
Con- gress greater leeway when it seeks to control through
legislation the actions of
American companies, see
Restatement §402; and some of the anticompetitive price-fixing
conduct alleged here took place in
America. But the higher
foreign prices of which the foreign plaintiffs here complain are
not the consequence of any domestic anticompetitive conduct
that Congress sought to forbid, for Congress did not seek
to forbid any such conduct insofar as it is here relevant,
i.e., insofar as it is intertwined with foreign conduct
that causes independent foreign harm. Rather Congress sought to
release domestic (and foreign) anticompetitive conduct
from Sherman Act constraints when that conduct causes foreign harm.
Congress, of course, did make an exception where that conduct also
causes domestic harm. See House Report 13 (concerns about American
firms’ participation in international cartels addressed through
“domestic injury” exception). But any independent domestic harm the
foreign conduct causes here has, by definition, little or nothing
to do with the matter.
We thus repeat the basic question: Why is it
reasonable to apply this law to conduct that is significantly
foreign
insofar as that conduct causes independent foreign harm
and that foreign harm alone gives rise to the plaintiff’s
claim? We can find no good answer to the question.
The Areeda and Hovenkamp treatise notes that
under the Court of Appeals’ interpretation of the statute
“a Malaysian customer could … maintain an action
under United States law in a United States court against its own
Malaysian supplier, another cartel member, simply by noting that
unnamed third parties injured [in the United States] by the
American [cartel member’s] conduct would also have a cause of
action. Effectively, the United States courts would provide
worldwide subject matter jurisdiction to any foreign suitor wishing
to sue its own local supplier, but unhappy with its own sovereign’s
provisions for private antitrust enforcement, provided that a
different plaintiff had a cause of action against a different firm
for injuries that were within U. S. [other-than-import] commerce.
It does not seem excessively rigid to infer that Congress would not
have intended that result.” P. Areeda & H. Hovenkamp, Antitrust
Law ¶ ;273, pp. 51–52 (Supp. 2003).
We agree with the comment. We can find no
convincing justification for the extension of the Sherman Act’s
scope that it describes.
Respondents reply that many nations have
adopted antitrust laws similar to our own, to the point where the
practical likelihood of interference with the relevant interests of
other nations is minimal. Leaving price fixing to the side,
however, this Court has found to the contrary. See,
e.g.,
Hartford Fire, 509 U. S. at 797–799 (noting that the
alleged conduct in the London reinsurance market, while illegal
under United States antitrust laws, was assumed to be perfectly
consistent with British law and policy); see also,
e.g., 2
W. Fugate, Foreign Commerce and the Antitrust Laws §16.6 (5th ed.
1996) (noting differences between European Union and United States
law on vertical restraints).
Regardless, even where nations agree about
primary conduct, say price fixing, they disagree dramatically about
appropriate remedies. The application, for example, of American
private treble-damages remedies to anticompetitive conduct taking
place abroad has generated considerable controversy. See,
e.g., 2 ABA Section of Antitrust Law, Antitrust Law
Developments 1208–1209 (5th ed. 2002). And several foreign nations
have filed briefs here arguing that to apply our remedies would
unjustifiably permit their citizens to bypass their own less
generous remedial schemes, thereby upsetting a balance of competing
considerations that their own domestic antitrust laws embody.
E.g., Brief for Federal Republic of Germany et al. as
Amici Curiae 2 (setting forth German interest “in seeing
that German companies are not subject to the extraterritorial reach
of the United States’ antitrust laws by private foreign
plaintiffs—whose injuries were sustained in transactions entirely
outside United States commerce—seeking treble damages in private
lawsuits against German companies”); Brief for Government of Canada
as
Amicus Curiae 14 (“treble damages remedy would
supersede” Canada’s “national policy decision”); Brief for
Government of Japan as
Amicus Curiae 10 (finding
“particularly troublesome” the potential “interfere[nce] with
Japanese governmental regulation of the Japanese market”).
These briefs add that a decision permitting
independently injured foreign plaintiffs to pursue private
treble-damages remedies would undermine foreign nations’ own
antitrust enforcement policies by diminishing foreign firms’
incentive to cooperate with antitrust authorities in return for
prosecutorial amnesty. Brief for Federal Republic of Germany
et al. as
Amici Curiae 28–30; Brief for Government of
Canada as
Amicus Curiae 11–14. See also Brief for United
States as
Amicus Curiae 19–21 (arguing the same in respect
to American antitrust enforcement).
Respondents alternatively argue that comity
does not demand an interpretation of the FTAIA that would exclude
independent foreign injury cases
across the board. Rather,
courts can take (and sometimes have taken) account of comity
considerations case by case, abstaining where comity considerations
so dictate. Cf.,
e.g.,
Hartford Fire,
supra, at 797, n. 24;
United States v.
Nippon
Paper Industries Co., 109 F. 3d 1, 8 (CA1 1997);
Mannington Mills, Inc. v.
Congoleum Corp., 595
F. 2d 1287, 1294–1295 (CA3 1979).
In our view, however, this approach is too
complex to prove workable. The Sherman Act covers many different
kinds of anticompetitive agreements. Courts would have to examine
how foreign law, compared with American law, treats not only price
fixing but also, say, information-sharing agreements,
patent-licensing price conditions, territorial product resale
limitations, and various forms of joint venture, in respect to both
primary conduct and remedy. The legally and economically technical
nature of that enterprise means lengthier proceedings, appeals, and
more proceedings—to the point where procedural costs and delays
could themselves threaten interference with a foreign nation’s
ability to maintain the integrity of its own antitrust enforcement
system. Even in this relatively simple price-fixing case, for
example, competing briefs tell us (1) that potential treble-damage
liability would help enforce widespread anti-price-fixing norms
(through added deterrence) and (2) the opposite, namely that such
liability would hinder antitrust enforcement (by reducing
incentives to enter amnesty programs). Compare,
e.g.,
Brief for Certain Professors of Economics as
Amici Curiae
2–4 with Brief for United States as
Amicus Curiae 19–21.
How could a court seriously interested in resolving so empirical a
matter—a matter potentially related to impact on foreign
interests—do so simply and expeditiously?
We conclude that principles of prescriptive
comity counsel against the Court of Appeals’ interpretation of the
FTAIA. Where foreign anticompetitive conduct plays a significant
role and where foreign injury is independent of domestic effects,
Congress might have hoped that America’s antitrust laws, so
fundamental a component of our own economic system, would commend
themselves to other nations as well. But, if America’s antitrust
policies could not win their own way in the international
marketplace for such ideas, Congress, we must assume, would not
have tried to impose them, in an act of legal imperialism, through
legislative fiat.
Second, the FTAIA’s language and
history suggest that Congress designed the FTAIA to clarify,
perhaps to limit, but not
to expand in any significant
way, the Sherman Act’s scope as applied to foreign commerce. See
House Report 2–3. And we have found no significant indica-
tion that at the time Congress wrote this statute courts would have
thought the Sherman Act applicable in these circumstances.
The Solicitor General and petitioners tell us
that they have found no case in which any court applied the Sherman
Act to redress foreign injury in such circumstances. Tr. of Oral
Arg. 21; Brief for United States as
Amicus Curiae 13;
Brief for Petitioners 13; see also
Den Norske, 241
F. 3d, at 429 (“[W]e have found no case in which jurisdiction
was found in a case like this—where a foreign plaintiff is injured
in a foreign market with no injuries arising from the
anticompetitive effect on a United States market”). And respondents
themselves apparently conceded as much at a May 23, 2001, hearing
before the District Court below. 2001 WL 761360, at *4.
Nevertheless, respondents now have called to
our attention six cases, three decided by this Court and three
decided by lower courts. In the first three cases the defendants
included both American companies and foreign companies jointly
engaged in anticompetitive behavior having both foreign and
domestic effects. See
Timken Roller Bearing Co. v.
United States,
341 U. S. 593, 595
(1951) (agreements among American, British, and French corporations
to eliminate competition in the manufacture and sale of
anti-friction bearings in world, including United States, markets);
United States v
. National Lead Co.,
332 U. S. 319, 325–328
(1947) (international cartels with American and foreign members,
restraining international commerce, including United States
commerce, in titanium pigments);
United States v
.
American Tobacco Co.,
221 U. S. 106, 171–172
(1911) (American tobacco corporations agreed in England with
British company to divide world markets). In all three cases the
plaintiff sought relief, including relief that might have helped to
protect those injured abroad.
In all three cases, however, the plaintiff was
the Government of the United States. A Government plaintiff, unlike
a private plaintiff, must seek to obtain the relief necessary to
protect the public from further anticompetitive conduct and to
redress anticompetitive harm. And a Government plaintiff has legal
authority broad enough to allow it to carry out this mission. 15 U.
S. C. §25; see also,
e.g.,
United States v.
E. I. du Pont de Nemours & Co.,
366 U. S. 316, 334
(1961) (“[I]t is well settled that once the Government has
successfully borne the considerable burden of establishing a
violation of law, all doubts as to the remedy are to be resolved in
its favor”). Private plaintiffs, by way of contrast, are far less
likely to be able to secure broad relief. See
California
v.
American Stores Co.,
495 U. S. 271, 295
(1990) (“Our conclusion that a district court has the power to
order divestiture in appropriate cases brought [by private
plaintiffs] does not, of course, mean that such power should be
exercised in every situation in which the Government would be
entitled to such relief”); 2 P. Areeda & H. Hovenkamp,
Antitrust Law ¶ ;¶ ;303d–303e, pp. 40–45 (2d ed. 2000)
(distinguishing between private and government suits in terms of
availability, public interest motives, and remedial scope);
Griffin, Extraterritoriality in U. S. and EU Antitrust Enforcement,
67 Antitrust L. J. 159, 194 (1999) (“[P]rivate plaintiffs
often are unwilling to exercise the degree of self-restraint and
consideration of foreign governmental sensibilities generally
exercised by the U. S. Government”). This difference means that the
Government’s ability, in these three cases, to obtain relief
helpful to those injured abroad tells us little or nothing about
whether this Court would have awarded similar relief at the request
of private plaintiffs.
Neither did the Court focus explicitly in its
opinions on a claim that the remedies sought to cure only
independently caused foreign harm. Thus the three cases tell us
even less about whether this Court then thought that foreign
private plaintiffs could have obtained foreign relief based solely
upon such independently caused foreign injury.
Respondents also refer to three lower court
cases brought by private plaintiffs. In the first,
Industria
Siciliana Asfalti, Bitumi, S. p. A. v
. Exxon Research
& Engineering Co., 1977 WL 1353 (SDNY, Jan. 18,
1977)
, a District Court permitted an Italian firm to
proceed against an American firm with a Sherman Act claim based
upon a purely foreign injury,
i.e., an injury suffered in
Italy. The court made clear, however, that the foreign injury was
“
inextricably bound up with . . . domestic restraints of
trade,” and that the plaintiff
“was injured . . . by
reason of an alleged restraint of our domestic trade,”
id., at *11, *12 (emphasis added),
i.e., the
foreign injury was dependent upon,
not independent of,
domestic harm. See Part VI,
infra.
In the second case,
Dominicus Americana
Bohio v.
Gulf & Western Industries, Inc., 473
F. Supp. 680 (SDNY 1979), a District Court permitted Dominican
and American firms to proceed against a competing American firm and
the Dominican Tourist Information Center with a Sherman Act claim
based upon injury apparently suffered in the Dominican Republic.
The court, in finding the Sherman Act applicable, weighed several
different factors, including the participation of American firms in
the unlawful conduct, the partly domestic nature of both conduct
and harm (to American tourists, a kind of “export”), and the fact
that the domestic harm depended in part upon the foreign injury.
Id., at 688. The court did not separately analyze the
legal problem before it in terms of independently caused foreign
injury. Its opinion simply does not discuss the matter. It
consequently cannot be taken as significant support for application
of the Sherman Act here.
The third case,
Hunt v.
Mobil Oil
Corp., 550 F. 2d 68, 72 (CA2 1977), involved a claim by
Hunt, an independent oil producer with reserves in Libya, that
other major oil producers in Libya and the Persian Gulf (the “seven
majors”) had conspired in New York and elsewhere to make it more
difficult for Hunt to reach agreement with the Libyan government on
production terms and thereby eliminate him as a competitor. The
case can be seen as involving a primarily foreign conspiracy
designed to bring about foreign injury in Libya. But, as in
Dominicus, the court nowhere considered the problem of
independently caused foreign harm. Rather, the case was about the
“act of state” doctrine, and the sole discussion of Sherman Act
applicability—one brief paragraph—refers to other matters. 550
F. 2d, at 72, and n. 2. We do not see how Congress could
have taken this case as significant support for the proposition
that the Sherman Act applies in present circumstances.
The upshot is that no pre-1982 case provides
significant authority for application of the Sherman Act in the
circumstances we here assume. Indeed, a leading contemporaneous
lower court case contains language suggesting the contrary. See
Timberlane Lumber Co. v
. Bank of America, 549
F. 2d 597, 613 (CA9 1976) (insisting that the foreign
conduct’s domestic effect be “sufficiently large to present a
cognizable injury
to the plaintiffs” (emphasis
added)).
Taken together, these two sets of
considerations, the one derived from comity and the other
reflecting history, convince us that Congress would not have
intended the FTAIA’s exception to bring independently caused
foreign injury within the Sherman Act’s reach.
V
Respondents point to several
considerations that point the other way. For one thing, the FTAIA’s
language speaks in terms of the Sherman Act’s
applicability to certain kinds of
conduct. The
FTAIA says that the Sherman Act applies to foreign “conduct” with a
certain kind of harmful domestic effect. Why isn’t that the end of
the matter? How can the Sherman Act both
apply to the
conduct when one person sues but
not apply to the same
conduct when another person sues? The question of who can or
cannot sue is a matter for other statutes (namely, the Clayton Act)
to determine.
Moreover, the exception says that
it applies if the conduct’s domestic effect gives rise to
“
a claim,” not to “
the plaintiff’s claim” or
“
the claim
at issue.” 15 U. S. C. §6a(2)
(emphasis added). The alleged conduct here did have domestic
effects, and those effects were harmful enough to give rise to “a”
claim. Respondents concede that this claim is not their own claim;
it is someone else’s claim. But, linguistically speaking, they say,
that is beside the point. Nor did Congress place the relevant words
“gives rise to a claim” in the FTAIA to suggest any geographical
limitation; rather it did so for a here neutral reason, namely, in
order to make clear that the domestic effect must be an
adverse (as opposed to a beneficial) effect. See House
Report 11 (citing
National Bank of Canada v
. Interbank
Card Assn., 666 F. 2d 6, 8 (CA2 1981)).
Despite their linguistic logic, these
arguments are not convincing. Linguistically speaking, a statute
can apply and not apply to the same conduct, depending upon other
circumstances; and those other circumstances may include the nature
of the lawsuit (or of the related underlying harm). It also makes
linguistic sense to read the words “a claim” as if they refer to
the “plaintiff’s claim” or “the claim at issue.”
At most, respondents’ linguistic arguments
might show that respondents’ reading is the more natural reading of
the statutory language. But those arguments do not show that we
must accept that reading. And that is the critical point.
The considerations previously mentioned—those of comity and
history—make clear that the respondents’ reading is not consistent
with the FTAIA’s basic intent. If the statute’s language reasonably
permits an interpretation consistent with that intent, we should
adopt it. And, for the reasons stated, we believe that the
statute’s language permits the reading that we give it.
Finally, respondents point to policy
considerations that we have previously discussed,
supra,
at 11, namely, that application of the Sherman Act in present
circumstances will (through increased deterrence) help protect
Americans against foreign-caused anticompetitive injury. As we have
explained, however, the plaintiffs and supporting
enforcement-agency
amici have made important
experience-backed arguments (based upon amnesty-seeking incentives)
to the contrary. We cannot say whether, on balance, respondents’
side of this empirically based argument or the enforcement
agencies’ side is correct. But we can say that the answer to the
dispute is neither clear enough, nor of such likely empirical
significance, that it could overcome the considerations we have
previously discussed and change our conclusion.
For these reasons, we conclude that
petitioners’ reading of the statute’s language is correct. That
reading furthers the statute’s basic purposes, it properly reflects
considerations of comity, and it is consistent with Sherman Act
history.
VI
We have assumed that the
anticompetitive conduct here independently caused foreign injury;
that is, the conduct’s domestic effects did not help to bring about
that foreign injury. Respondents argue, in the alternative, that
the foreign injury was not independent. Rather, they say, the
anticompetitive conduct’s domestic effects were linked to that
foreign harm. Respondents contend that, because vitamins are
fungible and readily transportable, without an adverse domestic
effect (
i.e., higher prices in the United States), the
sellers could not have maintained their international price-fixing
arrangement and respondents would not have suffered their foreign
injury. They add that this “but for” condition is sufficient to
bring the price-fixing conduct within the scope of the FTAIA’s
exception.
The Court of Appeals, however,
did not address this argument, 315 F. 3d, at 341, and, for
that reason, neither shall we. Respondents remain free to ask the
Court of Appeals to consider the claim. The Court of Appeals may
determine whether respondents properly preserved the argument, and,
if so, it may consider it and decide the related claim.
For these reasons, the judgment of the Court
of Appeals is vacated, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.
Justice O’Connor took no part in the
consideration or decision of this case.
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