Amicus Curiae Brief — F. Hoffmann-La Roche Ltd v. Empagran SA

MOTION FLED

NOV 2 6 2003 fy)

No. 03-724

Jn the Supreme Court of the Anited States

F. HOFFMAN-LAROCHE, LTD., ET AL.,

Petitioners,

V.

EMPAGRAN, S.A., ET AL.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the

District of Columbia Circuit

MOTION FOR LEAVE TO FILE BRIEF AS AMICUS

CURIAE AND BRIEF OF THE CHAMBER OF

COMMERCE OF THE UNITED STATES AS AMICUS

CURIAE IN SUPPORT OF PETITIONERS

ROBIN S. CONRAD Roy T. ENGLERT, JR.*

National Chamber MAX HUFFMAN

Litigation Center, Inc. Robbins, Russell, Englert,

1615 H Street, N.W. Orseck & Untereiner LLP

Washington, D.C. 20062 1801 K Street, N.W.

(202) 463-5337 Suite 41]

Washington, D.C. 20006

(202) 775-4500

* Counsel of Record

MOTION FOR LEAVE TO FILE BRIEF

AS AMICUS CURIAE

Under Rule 37.2 of the Rules of this Court, the Chamber of

Commerce of the United States moves for leave to file the

accompanying brief as amicus curiae in support of the petition

for a writ of certiorari. Counsel for petitioners has consented to

the filing of this brief, but counsel for respondents has refused

consent.

The Chamber is a nonprofit corporation organized under

the laws of the District of Columbia and is the world’s largest

business federation. The Chamber represents an underlying

membership of more than three million companies and pro-

fessional organizations of every size, in every industry sector,

and from every region of the country. An important function of

the Chamber is to represent the interests of its members in mat-

ters before Congress, the Executive Branch, and the courts. To

that end, the Chamber regularly files amicus curiae briefs in

cases that raise issues of vital concern to the Nation’s business

community. The Chamber is well situated to brief the Court on

the importance of the issues presented in the petition to compa-

nies collectively responsible for a substantial portion of total

U.S. economic activity.

This case is an excellent vehicle for the Court to clear up

the growing confusion among the lower courts regarding the

right of foreign actors suffering injuries abroad to sue in U.S.

courts and take advantage of U.S. antitrust laws. In the decision

below, the D.C. Circuit interpreted the Foreign Trade Antitrust

Improvements Act (FTAIA), 15 U.S.C. § 6a, in a manner that

rejects the views of the Executive Branch, conflicts directly with

a prior decision by the Fifth Circuit, and fails to follow the

rationale of recent decisions of the Third and Seventh Circuits.

Together with the decision last year in Kruman v. Christie's

Int'l PLC, 284 F.3d 384 (2d Cir. 2002), cert. dismissed, 124

S. Ct. 27 (2003), the decision vastly expands the ability of

plaintiffs to seek compensation in U.S. courts for injuries arising

from the foreign effects of allegedly anticompetitive behavior.

The D.C. Circuit’s expansion of the antitrust jurisdiction of

U.S. courts threatens the Chamber’s members with a dramatic

increase of global forum shopping in the antitrust arena.

Unusually permissive features of the American judicial system

~— including class actions, permissive discovery rules, and

provisions for multiple and punitive damages — have proved

immensely attractive to foreign plaintiffs with a basis to invoke

U.S. court jurisdiction. Thus, even though foreign governments

have developed their own mechanisms for redress of antitrust

violations, the D.C. Circuit’s construction of the FTAIA will

invite foreign plaintiffs to sue here. Under this state of affairs,

U.S. courts will become the global arbiters of civil liability for

antitrust issues ranging from international price-fixing conspira-

cies to run-of-the-mill localized mergers — even when the claims

at issue have little or no connection to the United States.

The likely flood of antitrust actions undoubtedly will inflate

litigation costs and potential civil liability borne by the

Chamber’s members. But the D.C. Circuit’s permissive new

rule is entirely one-sided: members of amicus Chamber who are

the victims of antitrust violations will gain no increased protec-

tions. If anything, affording permissive access to U.S. courts for

foreign antitrust plaintiffs will dilute civil recoveries available

to U.S. plaintiffs, even while inflating civil liability to U.S.

defendants.

Members of amicus Chamber, a large and increasing num-

ber of which transact business in foreign countries, have a sub-

stantial interest in seeing the restoration of the limits placed on

U.S. antitrust jurisdiction by the FTAIA. At a minimum, mem-

bers of the Chamber need a coherent rule among the appellate

courts in this country to order their legal expectations rationally.

The Chamber therefore should be granted leave to file the

attached amicus brief.

Respectfully submitted.

ROBIN S. CONRAD

National Chamber

Litigation Center, Inc.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

NOVEMBER 2003

Roy T. ENGLERT, JR.

Counsel of Record

MAX HUFFMAN

Robbins, Russell, Englert,

Orseck & Untereiner LLP

1801 K Street, N.W.

Suite 41]

Washington, D.C. 20006

(202) 775-4500

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...............00200005. ii

INTEREST OF THE AMICUS CURIAE ..............-

STATEMENT ............. ccc ceccecccucceueceues 1

SUMMARY OF THE ARGUMENT ................. 4

ARGUMENT ................. cee ceeccceeeceeees 6

I. The Decision Below Would Produce Over-

whelming Burdens on U.S. Businesses, Would

Flood U.S. Courts With Claims by Foreign

Plaintiffs, and Has No Countervailing Benefits .. 6

II. The Decision Below Undermines the

Enforcement Authority of Other Countries’

Antitrust Agencies and Risks Creating

PE, ndecccacundaseenesneecee 13

Ill. The Worldwide Standing Rule that the D.C.

Circuit Propounded Has No Basis in This

Court’s Law and Undermines Congress’s

Intent in Enacting the FTAIA ........... roe

GREED eccncccnuccceasteecadecessscesent 20

(i)

TABLE OF AUTHORITIES

Page(s)

Cases

Air Freight Haulage Co. v. Ryd-Air, Inc. 1978-2

Trade Cas. ¥ 62, 321 (S.D.N.Y. 1978) ............ 18

Atlantic Richfield Co. v. USA Petroleum Co.,

SED Ncdecuaddveueeenssesescess 19

Brunswick Corp. v. Pueblo Bowl-o-Mat, Inc.,

SPEED obdeocedascenssenee 2, 6, 19, 20

Commissioner of Competition v. Air Canada,

2003 Comp. Trib. 13 (Jul. 22,2003) ............. 18

Coopers & Lybrand v. Livesay, 437 U.S. 463

DEE od bGnSCEndnEeesseuseenunaeseeencedees 10

Den Norske Stats Oljeselskap As v. HeereMac

v.of., 241 F.3d 420 (Sth Cir. 2001) ........ 3, 4, 8,19

Ferromin Int'l Trade Corp. v. UCAR Int'l, Inc.,

153 F. Supp. 2d 700 (E.D. Pa. 2001), appeal

pending, No. 01-3329 (3d Cir.).................. 13

In re Copper Antitrust Litig., 117 F. Supp. 2d 875

Dn ct4stbuchdnddvediensaseeueus 19

In re Microsoft Corp. Antitrust Litig.,

127 F. Supp. 2d 702 (D. Md. 2001) .............. 19

In re Rhéne-Poulenc Rorer, Inc., 51 F.3d 1293

CE nb benticicteviduedssedccuscenes 10

In re Sotheby's Holdings, Inc., Fed. Sec. L.

Rep. § 91,059, 2000 WL 1234601

Se MDD sccccoceécneddssdcndces 9

Kruman v. Christie's Int'l PLC, 284 F.3d 384

DEED Sakebcuusdenbedoeedsdesénenes passim

ill

TABLE OF AUTHORITIES—Continued

Page(s)

Kruman v. Christie's Int'l PLC, 129 F. Supp 2d

620 (S.D.N.Y. 2001), rev'd, 284 F.3d 384

SSE, BED cbcccdcccdcccussecesencecvens 4,14

Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

GR es SOE ov ceccccccccoccecesosesens 13

Midwest Machinery, Inc. v. Northwest Airlines,

Inc., 167 F.3d 439 (8th Cir. 1999) ............-.4.. 18

Piper Aircraft Corp. v. Reyno, 454 U.S. 235

SED casvcdencsddennasteucéecenessensdesees 6

Statutes

Clayton Act § 4,15 U.S.C.§15 ............. 6,7, 10, 18

Foreign Trade Antitrust Improvements Act,

Lt | al | FPPPPrrrrrrrrTrrrrrr rT Teele passim

International Antitrust Enforcement Assistance

Act of 1994, 15 U.S.C. §§ 6200-6212 ............ 16

Protection of Trading Interests Act,

Be Be, SPO cccccccscccseteenesses 14, 15

Miscellaneous

Agreement Between the Government of the United

States of America and the Government of

Australia on Mutual Antitrust Enforcement

Assistance (April 27, 1999), available at

http://www.usdoj.gov/atr/public/international/

Kk | PP PPPPrrrrrerrrrrrrrrririTr ee 16

iv

TABLE OF AUTHORITIES—Continued

Page(s)

Agreement Between the Government of the United

States of America and the Government of

Australia Relating to Cooperation on

Antitrust Matters (Jun. 29, 1982), available

at http://www.usdoj.gov/atr/ public/

international/docs/austral.us.txt ................. 16

Hannah L. Buxbaum, The Private Attorney General

in a Global Age: Public Interests in Private

International Antitrust Litigation, 26 Y ALE J.

ee E vivedtdnnetheduddassuoesess 14

Ronald W. Davis, /nternational Cartel & Monopol-

ization Cases Expose a Gap in Foreign Trade

Antitrust Improvements Act, ANTITRUST, Summer

PGE GN ncndstddectentccnawabesenbaweses 12

Deputy Assistant Attorney General Makan Delrahim,

Department of Justice Perspectives on Interna-

tional Antitrust Enforcement: Recent Legal

Developments and Policy Implications (Nov. 18,

2003), available at http://www.usdoj.gov.atr/

public/speeches/201509.pdf ................. passim

Secretary of Commerce Donald L. Evans, Remarks at

the meeting of the National Corngrowers Assoc-

iation (July 16, 2001), available at http://www.

commerce.gov.opa/speeches/Evans/2001/July_

16_Evans-Com_Assoc.html .................... 3

Michael Freeman, “Here Comes Treble,” Forbes.com,

Aug. 27, 2003, available at http://www.cmht.

com/casewatch/cases/itnTreble html .............. 8

HENRY J. FRIENDLY, FEDERAL JURISDICTION: A

GENERAL VIEW (1973) ............0.0..0000005. 1]

v

TABLE OF AUTHORITIES—Continued

Page(s)

| WILBUR L. FUGATE, FOREIGN COMMERCE AND THE

ANTITRUST LAws (Sth ed. 1996) ............. 14, 15

Thomas Greene & Robert L. Hubbard, State Antitrust

Enforcement Distribution Restraints, in PLI 42d

Annual Advanced Antitrust Seminar 1289 (2003) .... 9

Joseph P. Griffin, Foreign Governmental Reactions to

U.S. Assertions of Extraterritorial Jurisdiction,

6 GEO. MASON L. REV. 505 (1998). ............45. 7

H.R. REP. No. 97-686 (1982),

reprinted in 1982 U.S.C.C.A.N. 2487 ............. 20

Lily Henning, Antitrust Goes Global: D.C. Circuit

Opens the Door to Foreign Victims of Vitamin

Price Fixing, LEGAL TIMES, Oct. 13,2003 ..... 7,11, 12

William E. Kovacic, Lessons of Competition Policy

Reform in Transition Economics for U.S. Antitrust

Policy, 74 ST. JOHN’S L. REV. 361 (2000) ....... 2,17

Raymond Krauze & John Mulcahy, Antitrust Violations,

40 AM. CRIM. L. REV. 241 (2003) .........020005 10

A.V. Lowe, Blocking Extraterritorial Jurisdiction: The

British Protection of Trading Interests Act, 1980,

Ff 8 kf RPT ree 15

Mass Torts and Class-Action Lawsuits: Oversight

Hearings Before the House Committee on the

Judiciary, Subcommittee on Courts and Intel-

lectual Property, 105th Cong. (Mar. 5, 1998)

(testimony of former Attorney General Dick

Thornburgh), available at http://www.house.

gov/judiciary/41156.htm ...........-660 eee eeee 1]

973 Parl. Deb., H.C. (Sth ser.) (1979) ..........-.54.5. 15

vi

TABLE OF AUTHORITIES—Continued

Page(s)

Assistant Attorney General R. Hewitt Pate, Anti-Cartel

Enforcement, the Core Antitrust Mission 10 (May

16, 2003), available at http://www.usdoj.gov.atr/

public/speeches/201199.pdf ................005. 10

United Kingdom Response to U.S. Diplomatic Note

Concerning the U.K. Protection of Trading Inter-

ests Bill (Nov. 27, 1979), 21 I.L.M. 847 (1982) ..... 15

U.S. Department of Justice, Horizontal Merger

DR Seta ci aeo ator acer ecuer ene eases 17

SPENCER WEBER WALLER, ANTITRUST AND AMERICAN

BUSINESS ABROAD (3d ed. 1997) ................ 14

Spencer W. Waller, The United States as Antitrust

Courtroom to the World: Jurisdiction and

Standing Issues in Transnational Litigation,

14 Loy. CONSUMER L. REV. 523 (2002) ............ 7

http://www.cmht.com/casewatch/antitrust/auctions.

RN here le here eo ere 11

http://www.cmht.com/casewatch/cases/

I ok dpc beududvesessen ens tans) 8

http://www.globalcompetitionreview.com/home/

EE 43 44 604 d04 000 dd on KAdeRURSe RESO ee en 17

BRIEF OF AMICUS CURIAE IN

SUPPORT OF PETITIONERS

INTEREST OF THE AMICUS CURIAE'

The interest of the amicus curiae is described in the

accompanying motion for leave to file this brief.

STATEMENT

This case is about global forum shopping. It is an attempt

by foreign plaintiffs to take advantage of the liberality of the

U.S. antitrust laws; the openness of U.S. courts; pro-plaintiff

aspects of the Federal Rules of Civil Procedure; and the gen-

erosity of U.S. juries. The precise issue petitioners ask the

Court to review is whether a provision of the Foreign Trade

Antitrust Improvements Act (FTAIA), 15 U.S.C. § 6a—a statute

passed in 1982 based on a recommendation by the Reagan

Administration to amend existing law to /imit aspects of U.S.

antitrust jurisdiction that had caused international friction —

gives these plaintiffs the keys to U.S. courts to seek redress for

injuries they claim to have suffered in the Ukraine, Australia,

Ecuador, and Panama.

The provision that has caused the circuits such consterna-

tion, producing a three- or four-way circuit split (Pet. 8-12), is

this (15 U.S.C. § 6a):

Sections 1 to 7 of this title 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 —

' Under Rule 37.6 of the Rules of this Court, amicus curiae states that

no counsel for a party has written this brief in whole or in part and that

no person or entity, other than the amicus curiae, its members, or its

counsel, has made a monetary contribution to the preparation and sub-

mission of this brief.

2

(A) on trade or commerce which is not trade or

commerce with foreign nations, 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; and

(2) such effect gives rise to a claim under the provisions

of sections | to 7 of this title, other than this section.

If sections | 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.

For 20 years after the statute’s enactment, businesses like

members of amicus have ordered their legal affairs with a

settled understanding. Businesses have understood that the

FTAIA’s plain language precludes claims for purely foreign

injury and that the FTAIA should be read in harmony with this

Court’s rules for antitrust injury. Those rules, as expressed in

Brunswick Corp. v. Pueblo Bowl-o-Mat, Inc., 429 U.S. 477

(1977), and its progeny, dictate that courts dismiss claims based

on injuries that do not “flow[] from that which makes defen-

dants’ acts unlawful” (id. at 489) — i.e., the domestic effects

identified in the text of the FTAIA. During that period — which

witnessed the transition of former command economies to

market economies — international and multinational commerce

flourished. See William E. Kovacic, Lessons of Competition

Policy Reform in Transition Economies for U.S. Antitrust

Policy, 74 ST. JOHN’S L. REV. 361, 361-363 (2000). Part of that

economic story has been the creation of antitrust enforcement

systems worldwide — such that in the years since 1950, when

ours was the only “robust system of antitrust laws,” scores of

countries have developed antitrust regimes. /d at 362. Multi-

national businesses have learned to order their affairs based on

the myriad regulatory schemes they face worldwide.

3

In the last 20 years, globalization of U.S. commerce has

produced extraordinary benefits to the U.S. economy. During

the prosperous 1990s, exports accounted for one-quarter of

overall economic growth, and trade liberalization is credited

with causing sustained economic growth during that decade.

Secretary of Commerce Donald L. Evans, Remarks at the

Meeting of the National Corngrowers Association (July 16,

2001), available at http://www.commerce.gov/opa/speeches/

Evans/2001/July_16 Evans _Com_Assoc.html.

The understanding that U.S. business and the U.S. antitrust

enforcement agencies had of the reach of U.S. antitrust laws was

well stated by the Fifth Circuit’s decision in Den Norske Stats

Oljeselskap As v. HeereMac v.o.f., 241 F.3d 420, 428 (Sth Cir.

2001): “{Tjhe FTAIA precludes subject matter jurisdiction

* * * where the situs of the injury is overseas and that injury

arises from effects in a non-domestic market.” In HeereMac,

the Fifth Circuit affirmed dismissal for lack of jurisdiction of a

claim brought by a foreign plaintiff claiming competitive injury

in the North Sea — interpreting the FTAIA to require that the

plaintiff bringing the lawsuit suffer domestic effects from the

alleged anticompetitive conduct. /d. at 427-428.

Within the past year the balance in global antitrust enforce-

ment has been upset twice by decisions from U.S. courts of

appeals that impose U.S. antitrust laws and standards on interna-

tional conduct. This result was never envisioned by Congress,

and has not played into the risk calculations of businesses

making the decision to engage in global commerce. See Deputy

Assistant Attorney General Makan Delrahim, Department of

Justice Perspectives on International Antitrust Enforcement:

Recent Legal Developments and Policy Implications 7-8

(Nov. 18, 2003), available at http://www.usdoj.gov/atr/public/

speeches/201509.pdf (Delrahim Remarks). First, the Second

Circuit in Kruman v. Christie's Int'l PLC, 284 F.3d 384 (2d Cir.

2002), cert. dismissed, 124 S. Ct. 27 (2003), and now the D.C.

Circuit in the decision below, have interpreted the FTAIA to

permit suit under U.S. antitrust laws by foreign plaintiffs claim-

4

ing injury suffered only abroad. Pet. App. 20a; Kruman, 284

F.3d at 390. According to the D.C. Circuit, both jurisdiction

and standing can be supported by reference to an injury suffered

by someone other than the plaintiff: “the plaintiff must” only

“allege that some private person or entity has suffered actual or

threatened injury as a result of the U.S. effect of the

defendant’s” antitrust violation. Pet. App. 23a (emphasis

added).

Dissenters from the interpretation of the FTAIA followed

by the decision below include Judge Henderson of that court

(Pet. App. 40a); Judges Sentelle and Randolph, who voted for

en banc review (Pet. App. 44a); Judge Hogan, whose opinion

the D.C. Circuit reversed (Pet. App. 45a); and Judge Kaplan of

the Southern District of New York (Kruman v. Christie's Int'l

PLC, 129 F. Supp. 2d 620, 624 (S.D.N.Y. 2001), rev’d, 284

F.3d 384 (2d Cir. 2002)). The U.S. government consistently has

taken the position that HeereMac, not Kruman or the decision

below, reflects the proper interpretation of the FTAIA. See

Pet. 7; Pet. App. 67a; Delrahim Remarks 7 (“[W]e believe that

Kruman and Empagran have profoundly disturbing policy im-

plications.”’). Indeed, except for the misguided holdings of the

court below and the Second Circuit, there is near unanimity of

belief that — as a matter of statutory interpretation, antitrust

policy, and international comity — U.S. law does not afford

relief to foreign plaintiffs claiming foreign injury.

SUMMARY OF THE ARGUMENT

The flood of litigation that stands to be unleashed by the

decision below — which opens the courts of the United States to

foreign plaintiffs who suffered no injury in the United States —

1s by itself enough reason for this Court to grant certiorari. The

distinctive features of the U.S. civil litigation system and the

relative severity of U.S. laws will exert an inexorable pull on

foreign plaintiffs seeking the most favorable forum for their

claims. The inevitable flow of litigation to the United States is

not justified by an increase in deterrence, as the D.C. Circuit

uncritically assumed. Indeed, ratcheting up the exposure of

5

defendants in civil actions in U.S. courts undermines detection

of cartel behavior, as the U.S. antitrust authorities and the

Solicitor General advised the D.C. Circuit in vain.

Giving the class-action bar access to worldwide potential

plaintiffs, for injury not suffered in the United States, is a recipe

for disaster. “Blackmail settlements” (Judge Friendly’s term)

can only increase. The only reason there has not been even

more of a rash of litigation than has already been spawned by

the decision below and the Second Circuit’s Kruman decision

is that lawyers like respondents’ counsel have been publicly tell-

ing potential plaintiffs to await this Court’s action before suing.

There is no reason to await another case before resolving

the issue cleanly presented by the petition. The hydraulic pres-

sure to settle these massive cases makes it important for this

Court to seize the opportunity to address one that has not settled.

International friction will inevitably result if the decision

below stands. Expansive interpretations of U.S. antitrust juris-

diction have caused friction for decades, even with our closest

trading allies. Other nations can and do protect their own citi-

zens through antitrust or antitrust-like regimes, and there is no

need or justification for the United States to substitute its for-

ums and procedures for those nations’ forums and procedures.

The holding below that foreign plaintiffs may sue for

foreign injuries as long as “some private person or entity has

suffered actual or threatened injury” in the United States, Pet.

App. 23a (emphasis added), would open the U.S. courts to anti-

trust cases challenging conduct far different from the price fix-

ing at issue in this case. Canadian consumers and competitors,

for example, plainly would be able to challenge in U.S. courts

the effects on intra-Canadian routes of the merger between Air

Canada and Canadian Airlines. This Court, not a divided D.C.

Circuit, should decide whether U.S. antitrust jurisdiction is to be

so expansive, and whether the views of the Executive Branch in

this sensitive matter of foreign relations are to be rejected.

6

On the merits, the Chamber urges reversal for all the rea-

sons given by petitioners and the Solicitor General. In particu-

lar, even respondents concede that the FTAIA incorporates the

“antitrust injury” principle of Brunswick, and that principle re-

quires dismissal of claims that stem not from “that which makes

defendants’ acts unlawful” (429 U.S. at 489) — the acts’ do-

mestic effects — but from foreign effects that the FTAIA plainly

states are not enough to constitute a violation of U.S. law.

ARGUMENT

I. The Decision Below Would Produce Overwhelming

Burdens on U.S. Businesses, Would Flood U.S.

Courts With Claims by Foreign Plaintiffs, and Has

No Countervailing Benefits

U.S. courts long have been a favored forum for plaintiffs

seeking the liberality of this Nation’s damages laws and the

generosity of American juries. See, e.g., Piper Aircraft Corp.

v. Reyno, 454 U.S. 235, 247 (1981) (rejecting plaintiffs’ argu-

ment that more favorable U.S. products liability and wrongful

death laws permitted suit in the U.S. for an airplane crash with

no other connection to the United States). Although the busi-

ness risk that litigation poses is by no means a story unique to

this case or to the U.S. antitrust scheme, the FTAIA is one of the

most important battlegrounds for plaintiffs’ continuing efforts

to realize the benefits of the U.S. forum instead of other, more

appropniate forums.

A. The decision of the court below, combined with the

Kruman decision from the Second Circuit, threatens a tidal

wave of litigation by foreign plaintiffs who, before Kruman,

could not sue for their injuries incurred wholly abroad (whether

or not, in the D.C. Circuit’s words, “some private person or enti-

ty has suffered actual or threatened injury” in the United States,

Pet. App. 23a (emphasis added)).

The U.S. antitrust regime has many features that make suit

in the United States attractive to foreign plaintiffs. The prospect

of treble damages available under Clayton Act § 4, 15 U.S.C.

7

§ 15, is itself a substantial incentive. See Spencer W. Waller,

The United States as Antitrust Courtroom to the World:

Jurisdiction and Standing Issues in Transnational Litigation, 14

Loy. CONSUMER L. REV. 523, 532 (2002). Other features in-

clude “extensive discovery, jury trials, class actions, contingent

fees, and even potentially punitive damages.” J/bid.; see also

Joseph P. Griffin, Foreign Governmental Reactions to U.S.

Assertions of Extraterritorial Jurisdiction, 6 GEO. MASON L.

REV. 505, 516 (1998) (“[A]spects of American antitrust practice

that are not often found outside the United States [include] jury

trials, wide-ranging pretrial discovery without judicial super-

vision, enforcement by private plaintiffs, extraterritorial discov-

ery, treble damages, class actions, contingent fees, [and] lack of

contribution among co-conspirators.”’).

Taken together, those features provide compelling reasons

to bring suit in the United States. “As a moth is drawn to the

light, so is a litigant drawn to the United States. If he can only

get his case into their courts, he stands to win a fortune.” Smith

Kline & French Labs Ltd. v. Bloch, [1983] 1 W.L.R. 730 (C.A.

1982) (Lord Denning). Kruman and the decision below

combine open U.S. jurisdictional rules, traditional treble

damages, and broad U.S. notions of pre-trial discovery into

a multi-color brochure for international antitrust tourism that

will surely be — indeed, already is — irresistible to many for-

eign plaintiffs whose alleged injuries have little to do with

cognizable U.S. interests. We do not think that is what U.S.

antitrust law should be about.

Delrahim Remarks 17. Respondents’ counsel clearly is aware

of foreign plaintiffs’ interest. See Lily Henning, Antitrust Goes

Global: D.C. Circuit Opens the Door to Foreign Victims of

Vitamin Price Fixing, LEGAL TIMES, Oct. 13, 2003 (Antitrust

Goes Global) (quoting respondents’ counsel Paul Gallagher as

saying that class actions, jury trials, contingent fees, and discov-

ery are reasons why foreign plaintiffs seek U.S. courts).

8

In this Court, respondents’ counsel characterize the conflict

and confusion among the circuits as falling “at the margins of

federal antitrust law” (Br. in Opp. 16). On the website of lead

counsel, however, they were far more candid in highlighting the

far-reaching effect of the decision below:

[T]he full D.C. Circuit Court of Appeals, widely regarded as

the most important appellate court below the Supreme

Court, * * * ruled in [this case] that foreign plaintiffs may

bring claims in U.S. Courts under U.S. antitrust laws * * *

even though the foreign plaintiffs’ injuries did not arise

from transactions in the United States. * * * Paul Gallagher,

a partner with Cohen, Milstein Hausfeld & Toll, P.L.L.C.,

counsel] for the foreign plaintiffs and who argued the appeal

said, “This is a major ruling in favor of the ability of foreign

persons to vindicate their rights in U.S. courts against com-

panies involved in international cartels. This ruling means

that litigation against the vitamin manufacturers by foreign

plaintiffs will continue in the trial court, with the vitamins

defendants being exposed to potential damages in the

billions of dollars. The implications to the vitamin defen-

dants are enormous.”

http://www.cmht.com/casewatch/cases/cwvitaminpr.htm]

(visited Nov. 22, 2003). Likewise, respondents’ counsel dis-

cussed the generalized ramifications of the D.C. Circuit’s result.

“It’s a very, very significant case in terms of the implications

for both domestic and foreign companies that do business in the

United States,’ says Paul T. Gallagher, the plaintiff's lawyer.

* * * ‘It really increases the potential downside, the potential

damages that a foreign defendant is exposed to in a U.S. court.””

Michael Freeman, “Here Comes Treble,” Forbes.com, Aug. 27,

2003, available at http://www.cmht.com/casewatch/cases/

itnTreble.html.

The raft of ill effects from the exceptionally liberal rule

adopted by the court below was understood by the Fifth Circuit

in HeereMac, 241 F.3d at 427-428: “[A]ny entities, anywhere,

that were injured by any conduct that also had sufficient effect

9

on United States commerce could flock to the United States

federal court for redress, even if those plaintiffs had no

commercial relationship with any United States market and their

injuries were unrelated to the injuries suffered in the United

States.” .

B. Contrary to the conclusion of the court below (Pet. App.

30a-33a), the harms discussed above are not outweighed by

possible benefits of increased deterrence. The court’s deter-

rence rationale has no logical upper limit. If the goal of the

FTAIA truly is to deter certain types of conduct at all costs, the

punitive scheme might be extended up to and including impos-

ing a corporate “death penalty.” Compare Thomas Greene &

Robert L. Hubbard, State Antitrust Enforcement Distribution

Restraints, in PLI 42d Annual Advanced Antitrust Seminar

1289, 1297 (2003) (“A number of states also have corporate

‘death penalties’ whereby a corporation's charter can be revoked

for antitrust violations.”). One struggles in vain to understand

why the D.C. Circuit thought payment of thrice the damages

stemming from the U.S. effects of the conspiracy, p/us criminal

fines, plus enormous civil penalties in other countries (see

Pet. 5), plus such damages as may be available to private plain-

tiffs under the laws of other countries, is insufficient deterrence.

Rather, as the Solicitor General argued to the court below,

opening the U.S. courts to all those with claims based on purely

foreign injury would have the perverse effect of decreasing in-

centives for firms to break from cartels, because the increased

potential civil liability in cases like this one will be impossible

to bear. The corporate leniency policy followed by the Antitrust

Division (Pet. App. 78a) eliminates the threat of criminal prose-

cution for a cooperating corporation and its officers who break

from, and disclose, a cartel. Corporate Leniency Policy, 4

Trade Reg. Rep. (CCH) 4 13,113, at 20,649-21, 20,649-22

(Aug. 10, 1993). See Jn re Sotheby's Holdings, Inc., Fed. Sec.

L. Rep. J 91,059, 2000 WL 1234601, at *3 (S.D.N.Y. Aug. 31,

2000) (noting that Christie’s International PLC disclosed the

price-fixing agreement, later the subject of a certiorari petition

10

(No. 02-340) raising the same issue as this case, under the

Antitrust Division’s corporate leniency policy).

The corporate leniency policy has been considered highly

effective. “This [FTALA] issue has arisen precisely because of

the successful detection and prosecution of international cartels

by the Division and other antitrust agencies in recent years.”

Assistant Attorney General R. Hewitt Pate, Anti-Cartel Enforce-

ment, the Core Antitrust Mission 10 (May 16, 2003), available

at http://www.usdoj.gov/atr/public/speeches/201199.pdf. See

also Raymond Krauze & John Mulcahy, Antitrust Violations, 40

AM. CRIM. L. REV. 241, 270-271 (2003) (crediting the policy

with the majority of U.S. cartel enforcement successes in recent

years). To the extent that the fear of private treble-damages

liability under 15 U.S.C. § 15 is greater than the fear of criminal

prosecution, the leniency policy will be ineffective.’

C. The plaintiffs’ bar in this country — not ill-used foreign

plaintiffs — drives purported international class actions. Recog-

nition of the power of the class-action device is not new, and not

limited to cases involving worldwide treble-damages classes.

This Court and myriad lower federal courts and commentators

have discussed the effect that class certification has on litiga-

tion. “Certification of a large class may so increase the defen-

dant’s potential economic damages liability and litigation costs

that he may find it economically prudent to settle and to aban-

don a meritorious defense.” Coopers & Lybrand v. Livesay, 437

U.S. 463, 476 (1978). Class certification presents such pres-

sures because defendants cannot “stake their companies on the

outcome of a single jury trial.” Jn re Rhéne-Poulenc Rorer, Inc.,

51 F.3d 1293, 1299 (7th Cir. 1995). Class actions have been de-

7

-

A bill currently under consideration in Congress would increase

criminal penalties for cartel behavior. The same bill would reduce

damages recovery in certain private suits to “address[{] a major disin-

centive that currently confronts companies who are contemplating expos-

ing cartel activity to the Division — the threat of treble damage lawsuits

*** Ofcourse, without cartel detection, the potential compensation to

consumers harmed by antitrust crime is zero.” Delrahim Remarks 15-17.

1]

scribed as “judicial weapons of mass destruction. These suits

promise such devastating consequences that even the most inno-

cent of defendants must settle or risk total destruction.” Mass

Torts and Class-Action Lawsuits: Oversight Hearings Before

the House Committee on the Judiciary, Subcommittee on Courts

and Intellectual Property, 105th Cong. (Mar. 5, 1998) (testi-

mony of former Attorney General Dick Thornburgh), available

at http://www.house.gov/judiciary/41156.htm. Judge Friendly

termed this the “blackmail settlement.” HENRY J. FRIENDLY,

FEDERAL JURISDICTION: A GENERAL VIEW 120 (1973).

The power of the class-action device takes on entirely new

meaning in the context of worldwide classes.’ If the interpreta-

tions of the FTALA adopted in Kruman and the decision below

stand, it is fair to expect that plaintiffs’ class counsel will take

global the search for class action plaintiffs. In the specific case

of the litigation that spawned the petition, this is occurring.

“Already, some lawyers have begun to cast their nets for clients,

hopping planes to places as far afield as the Czech Republic to

look for purchasers who bought vitamins from cartel members.”

Antitrust Goes Global, supra.

Given this reality, it is disingenuous for respondents to

argue to this Court that there has not been an outpouring of

litigation resulting from the D.C. Circuit’s reading of the

FTAIA. Br. in Opp. 15. There has been substantial litigation

raising this issue (see Pet. 12 n.3). That there has not been even

more stems to a degree from the control respondents’ counsel

themselves possess over the floodgates. A recent interview with

plaintiffs’ counsel in these cases demonstrates that fact:

“Kenneth Adams, the Dickstein partner who spearheaded the

> Respondents’ counsel in this case have trumpeted their success in

bringing into the U.S. antitrust class-action fold billions of potential

worldwide plaintiffs. Referring to the settlement in Kruman’s, the firm

notes on its website: “This settlement marks the first time that claims on

behalf of foreign plaintiffs under U.S. antitrust laws have resolved in a

U.S. court, a milestone in U.S. antitrust jurisprudence.” http://www.

cmht.com/casewatch/antitrust/auctions.html (visited Nov. 22, 2003).

12

firm’s vitamin litigation, says he’s been contacted by a host of

foreign plaintiffs, but has advised them to wait until the appeals

in Empagran have run their course before filing suit.” Antitrust

Goes Global, supra.

The wave of treble-damages suits that the decision below

allows, if its interpretation of the FTAIA stands, will severely

harm the American business community, including large num-

bers of Chamber members. Allowing foreign plaintiffs whose

injuries arise from foreign effects to sue in the United States can

increase potential liability by millions, if not billions, of dollars.

This reality is exemplified by the graphic electrodes case pend-

ing before the Third Circuit (see Pet. 12), and by the settlement

in Kruman before this Court could consider the issue (Pet. 10).

Even those who support the FTAIA reading followed by the

court below, and the even more expansive reading in Kruman,

note the far-ranging impact of the decisions. See, e.g., Ronald

W. Davis, /nternational Cartel & Monopolization Cases Expose

a Gap in Foreign Trade Antitrust Improvements Act, ANTI-

TRUST, Summer 2001, at 53, 57 (“{T]he mind boggles at

expanded class action proceedings, where counsel for purchas-

ers in Alabama and Texas sit at the counsel table with attorneys

for subclasses of purchasers in Albania and Tajikistan.”’).

D. Respondents’ argument that the Court should wait until

“{o}ther federal law questions that will be addressed on remand”

are staged for this Court’s review (Br. in Opp. 7-8) is utterly dis-

ingenuous. If the Court denies certiorari, it is exceedingly un-

likely that the FTAIA issue will be presented to the Court as

part of this litigation. Indeed, in Kruman, the certiorari petition

was dismissed when the parties settled, rather than face contin-

ued uncertainty. Pet. 10. For the same reason, the Court should

not wait for the pending cases respondents cite (Br. in Opp. 14)

to present themselves for review. Preliminarily, MM Global

Servs. v. Dow Chem. Co., 283 F. Supp. 2d 689 (D. Conn. 2003),

is controlled by Kruman. And experience teaches that, in light

of the hydraulic pressures to settle, these cases might never

make it as far as an appellate decision — much less a certiorari

13

petition. The present case offers a golden opportunity for this

Court to settle an issue of profound economic and foreign-

relations significance, and the Court should seize the opportuni-

ty and not await some other case.

The Court should not wait for the Third Circuit’s decision

in the UCAR appeals (Pet. 12 n.3). That case, arising out of an

alleged worldwide conspiracy to fix prices and allocate markets

for graphite electrodes, involves a particularly lopsided ratio of

foreign injury to domestic injury. The district court reduced the

defendants’ post-trebling liability in the United States on one

part of that case from $687 million to $54 million after dismiss-

ing the foreign plaintiffs’ claims for injury abroad. Ferromin

Int'l Trade Corp. v. UCAR Int'l, Inc., 153 F. Supp. 2d 700, 706

(E.D. Pa. 2001), appeal pending, No. 01-3329 (3d Cir.); see also

153 F. Supp. 2d at 703 (noting an even more lopsided ratio in

different aspect of the case). That lopsided ratio shows the dra-

matic effects of an erroneous decision to accept the rule the

D.C. Circuit accepted, but it does nothing to make the case any

more suitable a vehicle than this one for deciding the clean legal

issue presented in the petition.

II. The Decision Below Undermines the Enforcement

Authority of Other Countries’ Antitrust Agencies

and Risks Creating Political Conflict

A. This Court has noted that “American antitrust laws do

not regulate the competitive conditions of other nations’ econo-

mies.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

U.S. 574, 582 (1986). Yet the expansive reading of the FTAIA

adopted beloy imposes U.S. antitrust law — and, in particular,

the internationally controversial judgments of U.S. lawmakers

concerning class-action procedures and enhanced damages for

antitrust violations — on the global community. Rejecting that

reading of the FTAIA, the district judge whose opinion the Sec-

ond Circuit reversed aptly stated that such a reading “impute[s]

14

to Congress an intention to establish an antitrust regime to cover

the world.” Kruman, 129 F. Supp. 2d at 624."

Expansion of U.S. antitrust jurisdictron is certain to upset

foreign governments. “Other countries have for decades pro-

tested the perceived aggression with which the United States has

imposed its competition laws abroad.” Hannah L. Buxbaum,

The Private Attorney General in a Global Age: Public Interests

in Private International Antitrust Litigation, 26 Y ALE J. INT’L

L. 219, 249 (2001); see 1 WILBUR L. FUGATE, FOREIGN Com-

MERCE ANDTHE ANTITRUST LAWS § 2.16 (Sth ed. 1996) (“{flor-

eign nations, including close allies of the United States, have

protested the assertion of U.S. extraterritorial jurisdiction”).

In the face of this perceived aggression, those governments

do not rest idle. “Foreign governments have reacted with ve-

hemence towards the extraterritorial enforcement of U.S. anti-

trust laws in a number of circumstances. * * * [P]olite diplomat-

ic notes of concern and diplomatic notes of protest have been

supplemented by various foreign ‘blocking’ statutes.” Joseph P.

Griffin, supra, 6 GEO. MASON L. REV. at 505. One such “block-

ing statute,” the United Kingdom Protection of Trading Interests

Act of 1980 (PTIA), creates obstacles to foreign discovery by

allowing the Secretary of State for Trade to block a request for

documents or other discovery made by a foreign authority.

PTIA § 2, 21 I.L.M. 834, 835 (1982). And the PTIA allows

British citizens to avoid paying foreign judgments by allowing

the Secretary of State for Trade to prevent enforcement of

foreign judgments for multiple (treble) damages. PTIA § 5, id.

at 837. Another section takes the United Kingdom’s resistance

to treble damages one step further, creating a cause of action for

persons doing business in the United Kingdom to sue for two-

* The Antitrust Division specifically has rejected this view. “[Courts’]

antitrust jurisdiction and processes should continue to focus, as they

traditionally and successfully have * * *, on protecting U.S. commerce,

U.S. consumers, and competition in U.S. markets.” Delrahim Remarks

17.

15

thirds of a foreign treble-damages antitrust judgment. SPENCER

WEBER WALLER, ANTITRUST AND AMERICAN BUSINESS

ABROAD § 4:17, at 4-34 & -35 (3d ed. 1997); PTIA § 6, 21

I.L.M. at 837-838.

These provisions arise from a significant policy difference

with the United States. See A.V. Lowe, Blocking Extraterritori-

al Jurisdiction: The British Protection of Trading Interests Act,

1980, 75 AM. J. INT’LL. 257, 277 (1981) (“the unenforceability

of competition judgments ‘reflects the principle whereby sov-

ereign states do not accept an obligation to enforce the public

economic policies of other sovereign states’”’) (quoting 973 Parl.

Deb., H.C. (Sth ser.) (1979) 1546). Unlike the United States,

the Bntish Government considers multiple damage awards

penal, and will not enforce them. See, e.g., United Kingdom

Response to U.S. Diplomatic Note Concerning the U.K.

Protection of Trading Interests Bill (Nov. 27, 1979), 21 I.L.M.

847, 849 (1982). The British Government, in addition, does not

agree with encouraging private citizens to act as private attor-

neys general. As that government has explained, the U.S. policy

replaces “the usual discretion of public authority to enforce laws

in a way which has regard to the interests of society” with “a

motive on the part of the plaintiff to pursue defendants for

private gain thus excluding international considerations of a

public nature.” /bid. In addition, “where criminal and civil pen-

alties co-exist, those engaged in international trade are exposed

to double jeopardy.” /bid.

But the tensions between the United States and the United

Kingdom in this arena are not unique. Other countries also have

adopted statutes with provisions similar to those contained in

the PTIA. Canada, the Netherlands, Australia, Germany,

France, and New Zealand have statutes that block foreign dis-

covery. WALLER, supra, § 4:16; 1 FUGATE, supra, § 3.11.

These blocking statutes “were directed principally at American

antitrust enforcement.” WALLER, supra, § 4:16. Australia and

Canada have statutes that allow blocking of the enforcement of

foreign antitrust judgments. Jd. § 4:17. Australia’s and

16

Canada’s statutes also contain “clawback” provisions that create

the right to sue to recover money paid under a foreign antitrust

judgment that is deemed unenforceable. /bid. “When a coun-

try’s allies begin competing with each other in enacting legisla-

tion directed at frustrating, and indeed retaliating against,

actions of the first country, conflict and resentment is clear.” Jd.

§ 4:19.

Australia is particularly pertinent to the FTAIA issue raised

by the petition, because it is the situs of some of the alleged

injury in this case. Furthermore, as any weekly reader of

BNA’s Antitrust and Trade Regulation Report can attest,

Australia has one of the world’s most active antitrust enforce-

ment authorities. Australia and the United States have entered

into an agreement (see Agreement Between the Government of

the United States of America and the Government of Australia

on Mutual Antitrust Enforcement Assistance (April 27, 1999),

available at http://www.usdoj.gov/atr/public/international/docs/

usaus7.wpd) to facilitate the exchange of confidential informa-

tion during the course of civil or criminal antitrust investigations

pursuant to the International Antitrust Enforcement Assistance

Act of 1994, 15 U.S.C. §§ 6200-6212. As long ago as 1982 -

the year the FTAIA was passed — Australia had an agreement

relating to cooperation on antitrust matters with the United

States. See Agreement Between the Government of the United

States of America and the Government of Australia Relating to

Cooperation on Antitrust Matters (Jun. 29, 1982), available at

http://www.usdoj.gov/atr/public/international/docs/austral.us.

txt. Given this history of cooperation, one can safely infer that

Australia’s hostility is not to the substance of U.S. antitrust

laws, but to the efforts of the United States to dictate to other

countries how their citizens will be compensated (as plaintiffs)

or regulated and punished (as defendants). This case, in which

foreign plaintiffs seek to recover from foreign defendants for

foreign injuries — just because someone else felt an injury in the

United States from the same conduct — arises at the apex of

concern by fmendly U.S. trading partners about U/S.

unilateralism in antitrust matters. “As part of our efforts to

17

enhance our international efforts towards cooperation on cartel

enforcement, many countries pointed to the impact of

Empagran for their reluctance to enter into information sharing

pacts with the United States.” Delrahim Remarks 10.

This country should not unthinkingly impose its antitrust

laws and policy choices on the rest of the world. That is par-

ticularly true when the decisions are not the considered policy

judgment of Congress or the Executive Branch, but actually fly

in the face of the views of those charged with enforcing the anti-

trust laws. Pet. 7-8; Delrahim Remarks 7-10. The United States

has encouraged other nations to adopt and enforce antitrust

laws. See Kovacic, Lessons, supra, at 362. “We now live ina

world where there are nearly 100 jurisdictions with antitrust

laws of one sort or another, from Albania to Zambia, where both

foreign governments and foreign firms take antitrust seriously.”

Delrahim Remarks 2. Three of the four sovereign nations where

the effects alleged in this case occurred — the Ukraine, Australia,

and Panama — have their own antitrust authorities. See http://

www.globalcompetitionreview.com/home/links.cfm (visited

Nov. 23, 2003). The United States “‘should be hesitant to skew

the development of other countries’ antitrust regimes, private

and public, by encouraging a dependence on U.S. treble damage

actions for the redress of antitrust injuries.” Delrahim

Remarks 8.

B. The result below is not in any way limited to major

international cartels like those alleged in Kruman and this case.

Challenges to run-of-the-mill business transactions, between

foreign companies that also transact business in the United

States, threaten to become a staple of U.S. District Court

dockets. In 2000, Canada’s two major air carriers — Air Canada

and Canadian Airlines —- merged into one company. As a result,

routes throughout Canada, and routes between Canadian and

U.S. origins and destinations, were faced with a diminution in

the number of competitors, and thus perhaps a diminution in

competition, under traditional understandings of U.S. antitrust

doctrine. See U.S. Department of Justice, Horizontal Merger

?

18

Guidelines § 2.0 (“Other things being equal, market concentra-

tion affects the likelihood that one firm, or a small group of

firms, could successfully exercise market power.”’). Concerns

for competitive effects in Canadian air markets have appropn-

ately been the subject of inquiry by Canada’s Competition Tn-

bunal. See, e.g., Commissioner of Competition v. Air Canada,

2003 Comp. Trib. 13 (Jul. 22, 2003). And Canadian plaintiffs

have availed themselves of Canada’s antitrust regime to protect

their interests in markets where the dominant Air Canada firm

competes. See ibid. (intervention by WestJet Airlines, Ltd.).

Likewise, where Air Canada competes in U.S. markets, it

has been subjected to suits by plaintiffs claiming injury from

activities in those markets. See, e.g., Air Freight Haulage Co.

v. Ryd-Air, Inc., 1978-2 Trade Cas. § 62, 321 (S.D.N.Y. 1978)

(dismissing antitrust suit against defendants including Air Can-

ada). Under any reading of the FTAIA, plaintiffs claiming inju-

ry in the United States flowing from the Air Canada-Canadian

Airlines merger would have a basis to sue in U.S. courts. For

example, a U.S. plaintiff reliant on air service in a route — such

as Toronto to Washington, D.C. — where Air Canada and

Canadian Airlines previously competed clearly had a cause of

action under U.S. antitrust law to contest the merger. See 15

U.S.C. § 15 (permitting private damages actions for violations

of the antitrust laws); Midwest Machinery, Inc. v. Northwest

Airlines, Inc., 167 F.3d 439 (8th Cir. 1999) (allowing private

damages action to challenge consummated airline merger).

But the rule adopted below substantially broadens the range

of possible antitrust lawsuits. Under that interpretation of the

FTAIA, Canadian consumers or competitors could sue in the

United States for harm they claim to have suffered on intra-

Canadian routes — so long as “some private person or entity has

suffered actual or threatened injury” in the United States as a

result of the merger. Pet. App. 23a (emphasis added). In the

Chamber’s view, such a reductio ad absurdum — and the obvi-

ous affront to Canada that it entails — is practically enough by it-

self to show the D.C. Circuit’s error on the merits. In any event,

19

such an untoward result should not be allowed to result from a

2-1 D.C. Circuit decision, denied rehearing en banc by a 4-3

vote, contrary to the views of the Executive Branch. Even if

such a result is somehow correct, this Court has a responsibility

to announce the governing rule itself, not allow tremendous

international friction to result from the votes of a small number

of D.C. Circuit judges.

III. The Worldwide Standing Rule that the D.C. Circuit

Propounded Has No Basis in This Court’s Law and

Undermines Congress’s Intent in Enacting the

FTAIA

On the merits, the Chamber agrees with the arguments in

the petition and in the amicus brief filed by the Solicitor General

in support of rehearing below. The Chamber can therefore state

its own views in abbreviated form.

A bedrock principle of U.S. antitrust law is that “a plaintiff

must prove the existence of ‘antitrust injury, which is to say

injury of the type the antitrust laws were intended to prevent and

that flows from that which makes defendants’ acts unlawful.’”

Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334

(1990) (quoting Brunswick, 429 U.S. at 489). Plaintiffs injured

. in foreign countries by the foreign effects of defendants’ alleged

price-fixing activities neither suffer injury of the type the

American antitrust laws were intended to prevent nor suffer

injury that flows from that which makes defendants’ acts

unlawful. That which makes defendants’ acts unlawful is the

domestic effects, not the foreign effects, of defendants’

activities. Under black-letter “antitrust injury” doctrine, respon-

dents are not proper plaintiffs under the U.S. antitrust laws.

The legislative history of the FTAIA has been the subject

of some debate among the various courts considering this issue,

and among the briefs before this Court. Compare Pet. 14-15;

HeereMac, 241 F.3d at 428-429 & n.25; Jn re Microsoft Corp.

Antitrust Litig., 127 F. Supp. 2d 702, 716 (D. Md. 2001); Jn re

Copper Antitrust Litig., 117 F. Supp. 2d 875, 887 (W.D. Wis.

20

2000), with Br. in Opp. 23 & n.13; Pet. App. 24a. But there is

no debate about Congress’s intent in the arena of antitrust

standing: ‘“[T]he Committee does not intend to alter existing

concepts of antitrust injury or antitrust standing.” H.R. REP.

No. 97-686, at 11 (1982), reprinted in 1982 U.S.C.C.A.N. 2487,

2496.

Remarkably, respondents read the FTAIA as importing the

Brunswick rule. Br. in Opp. 22 (“Clause 2 imports the require-

ments of ‘antitrust standing’ that a plaintiff may recover only

for ‘injur[ies] of the type the antitrust laws were intended to pre-

vent.”’’) (quoting Brunswick, 429 U.S. at 489). Respondents

thus correctly understand that the FTAIA left unchanged the

antitrust injury doctrine this Court clearly stated in Brunswick

(Br. in Opp. 22), but incorrectly interpret the decision below to

accord with the Brunswick rule. Indeed, the Court need look no

further than Brunswick to resolve the legal issue that has split

the circuits. Brunswick makes clear that any one antitrust viola-

tion gives rise to claims by some plaintiffs, while it does not

give rise to claims by others. Antitrust standing turns on the

nature of the injury incurred by the party seeking access to the

courts — not the fact of antitrust injury in a vacuum. For this

reason, along with those petitioners and the Solicitor General

have stated, the judgment below should be reviewed and

reversed.

CONCLUSION

For the foregoing reasons and those stated in the petition,

the petition for a writ of certiorari should be granted.

21

Respectfully submitted.

ROBIN S. CONRAD

National Chamber

Litigation Center, Inc.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

NOVEMBER 2003

ROY T. ENGLERT, JR.

Counsel of Record

MAX HUFFMAN

Robbins, Russell, Englert,

Orseck & Untereiner LLP

1801 K Street, N.W.

Suite 4/1

Washington, D.C. 20006

(202) 775-4500