# Opposition Brief — Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co., 137 S. Ct. 2320 (2017) (No. 16-1220)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2017

## Text

shih —-45-3017
GRUEFS , IN THE SEEIGE oF ei art

Supreme Court of the United States

——- — spo -.

EC No. 16-1220 | PILED]
A

ANIMAL SCIENCE PRODUCTS, INC., ET AL.,
s Petitioners,
HEBEI WELCOME PHARMACEUTICAL Co. LTD., ET AL.,
Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF IN OPPOSITION

JONATHAN M. JACOBSON
Counsel of Record

DANIEL P. WEICK

JUSTIN A. COHEN

WILSON SONSINI GOODRICH
& RosatI, P.C.

1301 Avenue of the Americas,
40th Floor

New York, New York 10019

(212) 497-7700

jjacobson@wsgr.com

Scott A. SHER
BRADLEY T. TENNIS
WILSON SONSINI GOODRICH
& Rosati, P.C.
1700 K Street, N.W.,
Fifth Floor
Washington, D.C. 20006
(202) 973-8800

June 5, 2017 Attorneys for Respondents

Law Lawety

q a al

QUESTIONS PRESENTED

1. Whether a federal appellate court may review
a federal district court’s decision to exercise
jurisdiction over a case under Federal Rule of Civil
Procedure 12(b){1), consistent with unanimous
federal practice since the earliest days of the federal
judiciary.

2. Whether this Court should review the Second
Circuit’s narrow decision granting deference to the
formal statement of a foreign government on the
meaning and operation of its regulatory regime where
that conclusion is wholly consistent with this Court’s
decision in United States v. Pink, 315 U.S. 203 (1942),
and does not conflict with any decision of any other
circuit.

3. Whether this Court should overturn decades of
precedent and _ eliminate’ international comity
abstention in the antitrust class-action context—a
question Petitioners did not raise below.

PARTIES TO THE PROCEEDING

Petitioners are Animal Science Products, Inc. and
The Ranis Company, Inc., plaintiffs-appellees below.

Respondents are Hebei Welcome Pharmaceutical
Co. Ltd. and North China Pharmaceutical Group
Corporation, defendants-appellants below.

il
CORPORATE DISCLOSURE STATEMENT

Pursuant to Supreme Court Rule 29, Hebei
Welcome Pharmaceutical Co. Ltd. hereby discloses
that North China Pharmaceutical Co. Ltd. is its
parent company and no other publicly held
corporation holds more than 10% of its stock. North
China Pharmaceutical Group Corporation hereby
discloses that it is a state-owned enterprise under the
indirect ownership of the State-Owned Assets
Supervision and Administration Commission
(“SASAC”) of the Hebei Province of the People’s
Republic of China, that Jizhong Energy Group Co.,
Ltd. (which is wholly owned by the SASAC) is its
direct parent company, and that no publicly held
corporation holds more than 10% of its stock.

1V

TABLE OF CONTENTS

Page

py) © Py £it,y) + oy) cee V
a EL, TPE AE aR ORE SPREE I aT ae 1
ee ee ee ss casbuicdoawmeadets 4
REASONS FOR DENYING THE PETITION ......... 11
3 PETITIONERS’ ASSERTIONS THAT

THE PANEL SHOULD NOT HAVE

REVIEWED THE DISTRICT COURT'S

MOTION TO DISMISS ORDER DO

NOT PRESENT A QUESTION

MERITING THIS COURT'S REVIEW ......... 11

I. THE COURT OF APPEALS
CORRECTLY RECOGNIZED A TRUE
CONFLICT BETWEEN U.S. AND
CHINESE LAW, AND THERE IS NO
CIRCUIT SPLIT ON THE NARROW
ISSUE DECIDED IN THE OPINION

lil. THERE IS NO REASON TO DISTURB
SETTLED LOWER COURT LAW ON
THE APPLICABILITY OF
INTERNATIONAL COMITY IN
ANTITRUST CLASS ACTIONG.................... 27

aiid let icheenttanelialatice copoehatsbitnsts pat estan 33

TABLE OF AUTHORITIES

Page(s)
CASES

Abbott v. Abbott,

ge ER ST eevee ene Caer 20
Access Telecom, Inc. v. MCI Telecomms. Corp..,

197 F.3d 694 (5th Cir. 1999)........................... 20
Allstate Life Ins. Co. v. Linter Grp. Ltd.,

994 F.2d 996 (2d Cir. 1993) ................-.scrscceee 13
Arbaugh v. Y&H Corp.,

is adnmindeegnaneienndie 15

Bellotti v. Baird,
aiid duchinbebae 13

Bennett v. Pippin,
poe fT: fe ab) eer 15

Bolivarian Republic of Venez. v. Helmerich
& Payne Intl Drilling Co.,

581 U.S. _,

og A Bs By, Rene eunear ees 15, 33
Briscoe v. Bell,

oC SEUSS aes ee erencave ee 14

Capron v. Van Noorden,
eee I eusiciboadi sbdedimeiade 3

Chavez v. Carranza,
559 F.3d 486 (6th Cir. 2009)..........0..00..0... 22, 23

ClearOne Comme'ns, Inc. v.
Biamp Sys.,
663 F.3a 1163 (10th Cir. 3011)...........0.2...00000: 14

vi

Daewoo Motor Am., Inc. v. Gen. Motors Corp.,

459 F.3d 1249 (11th Cir. 2006)....................... 12
Empagran S.A. v. F. Hoffmann-La Roche Ltd.,

417 F.3d 1267 (D.C. Cir. 2006) .................0000.. 31
F. Hoffmann-La Roche Ltd v. Empagran S.A..,

Se ae Bee MI onic cucnisde ncdidedndacecwssinecss 24, 30

Fortino v. Quasar Co., a Div. of Matsushita
Elec. Corp. of Am.,

O60 F.2d SES (7th Cir. 1081).........ccccccccsccecoseess 13
Hartford Fire Ins. Co. v. California,
Be GP PUG CR hcdsceddccscscvessccs . 17, 29, 31, 32

Indus. Inv. Dev. Corp. v. Mitsui & Co.,
671 F.2d 876 (5th Cir. 1982),
vacaied, 460 U.S. 1007 (1983) «0.0.0.0... eee 31

In re Gollehon,
No. CO-14-031,
2015 WL 1746496
(B.A.P. 10th Cir. Apr. 17, 2015).............2.....:.. 15

In re Lorazepam & Clorazepate Antitrust Litig.,
18 ¢ EF ye tee : ) ) eee 15

In re Monosodium Glutamate Antitrust Litig.,
477 F.3a G35 (Oth Cir. B007).......-.ccccccccesssscses. 31

In re Oil Spill by the Amoco Cadiz Off the
Coast of Fr. on March 16, 1978,
954 F.2d 1279 (7th Cir. 1992)......00...0c eee. 23

In re Uranium Antitrust Litig.,
617 F.2d 1248 (7th Cir. 1980)......................... 31

In re Vitamin C Antitrust Litig.,
584 F. Supp. 2d 546 (E.D.N-Y. 2008) ............... 8

In re Vitamin C Antitrust Litig.,
810 F. Supp. 2d 522 (E.D.N.Y. 2011) ..cececceceese. 8

vil

In re Vitamin C Antitrust Litig.,
No. 06-md-1738 (BMC)(JQO),
2012 WL 4511308
(E.D.N.Y. Oct. 1, BOIUD)...0..cccrccecerccrssscesesesescoooses 9

In re Vitamin C Antitrust Litig.,
No. 06-md-1738 (BMC)(JO),
2013 WL 6191945
(E.D.N.Y. Nov. 26, BOUB) 0 .vsccsesvesescsosvoncedecessosees 9

In re Vitamin C Antitrust Litig.,
837 F.3d 175 (2d Cir. 2016) ........ccceceeeeeeeneeerees 10

JP Morgan Chase Bank v. Altos Hornos de
Mex., S.A. de C.V.,
A12. F.3d 418 (2d Cir. 2005) .......cccceceeeeeereeerrees 11

Karaha Bodas Co. v. Perusahaan Pertambangan
Minyak Dan Gas Bum
Negara (“Pertamina’),
313 F.3d 70 (2d Cir. 2002) ...........ccecceeeeeeneeeeee 23

Mannington Mills, Inc. v. Congoleum Corp.,
595 F.2d 1287 (3d Cir. 1979) .........+ 10, 17, 25

McKesson Corp. v. Islamic Republic of Tran,
672 F.3d 1066 (D.C. Cir. 2012) .......--2-2:0 21, 22

McKesson HBOC, Inc. v. Islamic Republic
of Iran,
271 F.3d 1101 (D.C. Cir. 2001),

vacated in part,

390 F.3d 280 (D.C. Cir. BIDS) .nccvcvscecescesoscoveces 22
Moore v. Sims,

442 U.S. 415 (1979) .... 2. cccereereeeeceerreeeeerereeeenenes 14
Morrison v. Nat! Austl. Bank Ltd.,

G1 US. 247 (2010) ...-..-nes0-ceeeesseesseesecnnees 30, 31

Mujica v. AirScan Inc.,
771 F.3d 580 (9th Cir. 2014),
cert. denied, 136 S. Ct. 690 (2015) ...-.... eee 28

viii
Nolfi v. Ohio vf Oil Corp.,
STG Fe GO COem Cae. BOVE) oo ccccscccccacccccicccscces 14

O.N.E. Shipping Ltd. v. Flota Mercante
Grancolombiana, S.A.,

re Fe ee Gs BOOED svnncdcicdccsccecsssicccsesi 10
Ohio Forestry Ass'n, Inc. v. Sierra Club,

Cc ca 13
Plymouth Dealers’ Ass'n v, United States,

Pe ee Ce Re ae Baas cc enicnesccnndcscnstass 17
Raines v. Byrd,

Be ee id cosetiieeasipviervineanei punto 14
Republic of Philippines v. Westinghouse

lec. Corp.,
Be ee OO Ce CE, TI savicisecvinsciviverssscscsavas: 28

RJR Nabisco, Inc. v. European Cmty.,
Re ay Is chins scndnsaiuhensienksie vaccines 33

Societe Nationale Industrielle Aerospatiale v.
U.S. Dist. Court for the S. Dist. of Jowa,

Ea ata et 2 ar ap ete Ra 28
Timberlane Lumber Co. v. Bank of Am.,

N.T. & S.A.,

549 F.2d 597 (9th Cir. 1976)............... 10, 17, 25
Trugman-Nash, Inc. v. N.Z. Dairy Bd.,

954 F. Supp. 733 (S.D.N.Y. 1997)................... 12
Underhill v. Hernandez,

ee I n\ cseec cdsncoucemeveavevcsucsancsh 26
United States v. Co tainer Corp. of Am..,

Be re I Ceci hcesstesisscevevecess: =o Saat oeueins 17

United States v. McNab,
331 F.3d 1228 (11th Cir. 2003)........... 20, 21, 25

iX

United States v. Pink,

A UD 1 5c: cu cunctlivaxinasenncveptaddens 1,19
United States v. Socony- Vacuum Oil Co.,

ee cis ROP CUED osc cacccsicecncctes sh iaieebalasiaananionsne 17
United States v. Trenton Potteries Co.,

a, CN ND ici ia cn cskconlocncivetecedebsacsesctas 17
Verlinden B.V. v. Cent. Bank of Nigeria,

eS cs 16
Zivotofsky ex rel. Zivotofsky v. Clinton,

ee RT inact Ee Re er A

STATUTES
ee nt reas ss eo deaibidueceeneppebninbans ye
RULES
nn a i a a, t, aay oe Be
en ee Oy) aiid ice catc sane esaeudanmasid 7, 14, 15
BE NER Se i AO a 9,13
eS cn esicladenunnebansisaieuues Y
OTHER AUTHORITIES

1B PHILLIP E. AREEDA & HERBERT HOVENKAMP,

ANTITRUST LAW (4th ed. 2016)...............ccc0ccee 29

Benjamin G. Bradshaw, et al.,
International Comity in the
Enforcement of U.S. Antitrust
Law in the Wake of In re Vitamin

C, 31 ANTITRUST 87 (2017)..........sc0eeseeseees

Brief of Amicus Curiae The Republic of
El Salvador in Support of
Appellant, Chavez v. Carranza,
Case No, 06-6234 (6th Cir. Apr.

| Kiel Sreet Mia le
H.R. Rep. No. 97-686 (1982) .......cccccccececesseceeseeees

Restatement (Fourth) of Foreign
Relations Law of the United
States (Am. Law Inst., Tentative

ee fe | eee

RESTATEMENT (THIRD) OF FOREIGN
RELATIONS LAW OF THE UNITED

RRS SRE eo eel ee eee

U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N,
ANTITRUST GUIDELINES FOR
INTERNATIONAL ENFORCEMENT

AND COOPERATION (2017) .........:cceceeeceeneees

292

eee eee at ee

]

INTRODUCTION

Seventy-five years ago in United States v. Pink,
315 U.S. 203 (1942), this Court affirmed a
fundamental principle of respect for foreign
governments’ explanations of the meaning of their
own laws and regulations before U.S. courts. In the
proceedings in this case, the district court failed to
adhere to Pink and_e rejected the formal
representations of a foreign government as to the
meaning of its own laws. The district court
essentially permitted private class-action attorneys to
use the federal courts to contest a foreign sovereign's
regulatory regime.

The U.S. Court of Appeals for the Second
Circuit properly disapproved of the district court's
approach, holding that “when a foreign government,
acting through counsel or otherwise, directly
participates in U.S. court proceedings by providing a
sworn evidentiary proffer regarding the construction
and effect of its laws and regulations, which is
reasonable under the circumstances presented, a U.S.
court is bound to defer to those statements.” Pet. App.
25a. The Second Circuit’s unanimous decision
comport: with this Court’s precedent, cogently
harmonizes appellate case law, creates no division of
authority, and provides clear guidance to the lower
courts hearing cases that implicate comit; concerns.
It thus raises no issue meriting this Court’s review.

This case arises against the backdrop of
China’s attempt to modernize its economy in an
orderly way. The government of the People’s Republic
of China has closely regulated a number of key
industries for many years to ensure a smooth
transition from a centralized command economy to a
socialist market economy. As part of this transition,

the relevant government Ministry ! established a
regulatory framework that directed Chinese vitamin
C producers to reach agreement on minimum export
prices and to observe export volume restrictions.
Years later, Petitioners filed a private antitrust class
action in the United States alleging that Respondents
and other Chinese vitamin C manufacturers had
conspired to fix prices. The Ministry made an
unprecedented appearance before the district court in
support of Respondents’ motion to dismiss to explain
that Chinese law in fact required the conduct at the
root of Petitioners’ antitrust complaint: an agreement
to coordinate pricing.

The district court did not afford the Ministry’s
interpretation of its own laws the respect required by
this Court—the same respect that the USS.
Government would expect when explaining U.S. law
to a foreign court. Discounting the Ministry’s
description of a regime created through its own
exercise of sovereign authority to regulate the
Chinese economy, the district court instead relied on
its own assessment of China’s complex, unfamiliar
regulatory system. The district court adopted a view
of Chinese law directly contrary to the Ministry’s and
allowed the case to proceed to trial—without allowing
the jury the benefit of even considering the Ministry’s
explanation. The trial proceedings resulted in a
judgment requiring Respondents to pay over $150
million for conduct that the Chinese government
clearly stated was required by Chinese law.

' Both the Ministry of Foreign Trade and Economic Cooperation
(“MOFTEC”) and Ministry of Commerce (“MOFCOM”),
MOFTEC’s successor entity, issued regulations relevant to this
case. For simplicity, both are herein referred to as “the Ministry.”

Unsurprisingly, this intrusion of U.S. class-
action lawyers into China’s domestic economic
regulation strained relations between the two
countries: while Respondents’ appeal was pending
below, the Chinese government relayed its objection
to the U.S. Department of State in an official
diplomatic statement, and the Ministry reaffirmed its
interpretation of its own regulations. The Second
Circuit properly corrected the district court’s error by
giving appropriate deference to the Ministry’s
explanation and concluding that international comity
required that the case be dismissed.

No issue identified by Petitioners merits this
Court’s review. First, in challenging the Second
Circuit’s review of Respondents’ motion to dismiss,
Petitioners disregard the fact that international
comity abstention represents a_ threshold
determination for resolution under Federal Rule of
Civil Procedure 12(b)(1), not an issue whose
resolution depends on further developments at trial.
This Court has held since its earliest cases that
vacating a trial judgment and remanding with
instructions to dismiss is the appropriate way to
resolve the district court’s improper exercise of
jurisdiction. See Capron v. Van Noorden, 6 U.S. 126,
127 (1804). The Second Circuit did not err in
following that approach, and no other court of
appeals has deviated from it.

Second, the decision below comports with this
Court’s decades-old guidance in Pink and _ the
decisions of other lower courts that have considered
explanations of foreign law offered to a U.S. court by
a foreign sovereign. The Second Circuit properly
relied on the Ministry’s construction of its own
regulatory regime to hold that a true conflict existed
between Chinese and U.S. law that, together with a

number of other factors balancing competing U.S.
and Chinese interests, required the district court to
abstain from exercising jurisdiction on international
comity grounds. The court’s decision is narrow. The
high level of deference to a foreign government’s view
of its own laws is required only when the foreign
government directly participates in the case to
articulate its position in a sworn evidentiary proffer
and where that position is reasonable. Nothing in the
Second Circuit’s reasoning on this point merits
review in this Court.

Third, lower courts have consistently
recognized that, in rare circumstances like this,
federal courts should abstain from exercising
jurisdiction on international comity grounds.
Petitioners never argued (or even suggested) below
that the international comity doctrine no longer
applies to antitrust actions, and no holding from this
Court or any court of appeals supports such a rule.
The Court should therefore reject Petitioners’ request
that it entertain academic’ speculation that
Petitioners themselves never even advanced below.
See Zivotofsky ex rel. Zivotofsky v. Clinton, 566 U.S.
189, 201 (2012) (“Ours is a court of final review and
not first view.”) (citation omitted),

Petitioners fail to identify any issue
warranting this Court’s review. The petition should
be denied.

STATEMENT OF THE CASE

1. Petitioners, plaintiffs and appellees below,
are Animal Science Products, Inc. and The Ranis
Company, Inc., class representatives for (1) a class of
direct and indirect purchasers of vitamin C seeking
injunctive relief and (2) a class of direct purchasers of
vitamin C seeking damages for alleged overcharges.

5

Respondents, defendants and appellants below, are
Hebei Welcome Pharmaceutical Co. Ltd. (“Welcome”),
a Chinese vitamin C manufacturer, and North China
Pharmaceutical Group Corporation (“NCPG”), a
holding company that owns a minority share of North
China Pharmaceutical Co. Ltd., which in turn holds a
majority share of Welcome. NCPG disputes the U.S.
courts’ personal jurisdiction over it in this case.

2. Since 1989, the Ministry has regulated
foreign trade in medicinal products by Chinese
companies through the Chamber of Commerce of
Medicines and Health Products Importers &
Exporters (the “Chamber”). The Chamber is
established and overseen by the Ministry and “must
implement ... administrative rules and regulations
relating to foreign trade and economy” as part of its
“coordination and industry regulation” functions. Dkt.
167-3 at 16, Case No. 13-4791 (2d Cir. July 28, 2014).
Unlike similarly named organizations in the United
States, the Chamber is an instrument of the
government. The Ministry exercises plenary
authority over the Chamber, including by selecting or
approving senior Chamber officials (often drawn from
Ministry staff), approving the Chamber budget, and
requiring the Chamber to submit annual plans and
records of important meetings and activities for
review.

Chinese vitamin C manufacturers were subject
to two regulatory regimes established and supervised
by the Ministry and the Chamber during tlie relevant
time period of this case. In 1997, the Ministry issued
the Notice Relating to Strengthening’ the
Administration of Vitamin C Production and Export
by Ministry of Foreign Trade and Economic
Cooperation and State Drug Administration (Nov. 27,
1997). The 1997 Notice directed the Chamber to

6

establish a Vitamin C Sub-Committee responsible for
“coordinating the Vitamin C export market, price and
customers of China, to improve the competitiveness of
Chinese Vitamin C produc[t] in the world market and
promote the healthy development of Vitamin C export
of China.” Dkt. 154-2 at 86, Case No. 13-4791 (2d Cir.
July 28, 2014).

In 2002 a new Ministry notice superseded the
1997 Notice and established a regulatory system
known as “price verification and chop” (“PVC”). The
2002 Notice was issued to avoid antidumping
complaints from foreign governments and facilitate
China’s entry into the World Trade Organization,
while maintaining the Ministry’s efforts to direct an
orderly transition to a socialist market economy.
Under the PVC system, the General Administration
of Customs would permit exports of vitamin C only if
the relevant contract had received approval from the
Chamber in the form of a “chop.” The Chamber’s chop
signified that the contract complied with Ministry
and Chamber requirements, including by setting a
price at or above the minimum price set by
coordination through the Chamber.

The Ministry explained below that vitamin C
exporters were required under both the 1997 and
2002 regimes to coordinate on prices and export
volumes. Contrary to Petitioners’ claim, Pet. 11, the
Ministry’s brief established that it was authorized to
interpret the relevant Chinese regulations. The
Ministry explained that it is the equivalent of a
cabinet-level department in the U.S. Government
system and that it “drafts and enforces laws and
regulations governing domestic and foreign trade,
and regulates market operation to achieve an
integrated, competitive and orderly market system.”
Dkt. 69 at 1, Case No. 06-md-01738 (E.D.N.Y. Sept.

22, 2006). The Ministry promulgated the notices
establishing the regulatory regimes at issue in this
case and directed and oversaw the Chamber’s efforts
to implement the requirements of those regimes.

The Ministry explained below that, under the
1997 Notice, it directly enforced price and export
quantity coordination through an export licensing
system. In 2002, to implement the new regulatory
system for vitamin C, the Sub-Committee enacted a
revised charter. The Sub-Committee remained
obligated to “coordinate|] and guide[] vitamin C
import and export activities, promote[] self-discipline
in the industry, maintain|] the regular order of
vitamin C import and export operations, and protect[]
the interests of the state, the industry and [its]
members.” Dkt. 154-2 at 89, Case No. 13-4791 (2d Cir.
July 28, 2014). The Chamber’s responsibilities
continued to be to “coordinate and guide the import
and export of medicines and health products[,| .. .
maintain the order of foreign trade, defend fair
competition, secure interests of the state and the
trade[, and] safeguard lawful rights and interests of
member organizations.” /d. at 76.

3. Petitioners filed a class-action complaint
against Respondents and other Chinese vitamin C
manufacturers in the Eastern District of New York
on January 26, 2005, alleging a conspiracy to fix
prices and output volumes of vitamin C in violation of
Section 1 of the Sherman Act, 15 U.S.C. § 1.
Respondents argued that Chinese law compelled the
conduct at issue and moved to dismiss the complaint
under Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6) on the basis of the foreign sovereign
compulsion doctrine, the act of state doctrine, and/or
international comity abstention. The Ministry
appeared as amicus curiae—the first time any entity

of the Chinese government had ever done so before a
U.S. court—and filed a brief supporting the motion.
Pet. App. 6a n5. The Ministry stated that regulations
promulgated under its authority required Chinese
vitamin C manufacturers to agree on price and
output levels to aid an orderly transition from a
centralized command economy to a socialist market
economy. Judge David G. Trager denied Respondents
motion, concluding that further factual development
was required to evaluate the “ambiguous” record as to
whether Respondents’ conduct was in fact voluntary.
584 F. Supp. 2d 546, 557-59 (E.D.N.Y. 2008).

On summary judgment, Respondents
reasserted the same three defenses. 810 F. Supp. 2d
522, 525-26 (E.D.N.Y. 2011). In addition to the
Ministry’s statements, Respondents offered expert
reports by Professor Shen Sibao, Dean and Professor
of Law at the University of International Business &
Economics in Beijing and Dean of the Shanghai
University Law School, and Professor James B. Speta,
Professor of Law at Northwestern University.
Professors Sibao and Speta explained that vitamin C
was a reguiated industry in China and that Ministry
regulations required coordination on _ price.
Petitioners did not offer a Chinese law expert of their
own. 810 F. Supp. 2d at 526 n.5.

Judge Brian M. Cogan, assigned to the case
after Judge Trager’s passing, recognized that the
Ministry was the “highest authority in China
authorized to regulate foreign trade.” Id. at 525.
Nonetheless, Judge Cogan deemed the Ministry’s
statement “particularly undeserving of deference,” id.
at 551, and suggested that it was a “post-hoc attempt
to shield defendants’ conduct,” id. at 552. The district
court thus refused to defer to the Ministry’s
explanation, treating discrepancies between the

9

Ministry’s statements and Petitioners’ (mis)reading
of Ministry and Chamber regulations as an invitation
to “parse out [Respondents’] precise legal role within
China’s complex vitamin C market regulatory
framework.” Pet. App. 29a-30a. After conducting his
own analysis of Chinese law, Judge Cogan concluded,
contrary to the Ministry’s explanation of its own
regulations, that Respondents’ conduct was not
compelled. /d. at 553-67. The court denied
Respondents’ summary judgment motion on that
basis. Id. at 525.

Trial was held from February 25, 2013 to
March 14, 2013. Judge Cogan excluded much of the
evidence supporting Respondents’ compulsion defense
at trial—including the Ministry’s highly relevant and
authoritative explanations of Chinese law—in an
unpublished written order and several bench orders.
2012 WL 4511308 (E.D.N.Y. Oct. 1, 2012). The jury
was ultimately asked only to decide whether there
was “compulsion in fact,” but, even on that limited
question, the exclusion of the most relevant evidence
hampered Respondents severely in their ability to
present their defenses to the jury. The jury returned
a verdict against Respondents, awarding pre-trebled
damages of $54.1 million. Respondents moved orally
for judgment as a matter of law under Rule 50(a) at
the conclusion of trial and filed a written motion
under Rule 50(b) after the jury verdict was returned.
Respondents’ Rule 50(b) motion identified the same
three grounds advanced at the motion to dismiss and
summary judgment stages. Judge Cogan again
denied Respondents’ imotions. 2013 WL 6191945
(E.D.N.Y. Nov. 26, 2013).

4. Respondents filed a notice of appeal
designating all prior judgments, orders, and opinions
on December 23, 2013. As relevant to the decision

10

below, Respondents sought review of “[w)hether the
district court erred in failing to dismiss the case on
international comity and/or act of state grounds.” Dkt.
175 at 3, Case No. 13-4791 (2d Cir. Aug. 11, 2014).
While the appeal was pending, the Chinese
government filed an official diplomatic statement
with the U.S. Department of State, noting that the
case was of “great importance” to China and again
emphasizing that Chinese law compelled’ the
Respondents’ conduct. The Ministry again
participated as an amicus before the Second Circuit.
Diplomatic Correspondence between Embassy for the
People’s Republic of China and the: United States
Department of State, Dkt. 111-3, Case No. 13-4791
(2d Cir. May 23, 2014).

The Second Circuit issued its unanimous
opinion on September 20, 2016. 8377 F.3d 175 (2d Cir.
2016). The court held that the district court abused
its discretion by not abstaining from exercising
jurisdiction on international comity grounds. In
particular, the court of appeals held that, given the
Ministry’s appearance in the case, the district court
had erred by failing to give conclusive deference to
the Ministry’s reasonable interpretation of Chinese
law, as required by this Court in Pink. Pet. App. 11a-
12a. The Second Circuit applied the international
comity balancing test developed by the circuit courts
in Timberlane Lumber Co. v. Bank of Am., N.T. &
S.A., 549 F.2d 597, 614-15 (9th Cir. 1976), and
Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d
1287, 1297-98 (3d Cir. 1979). See also O.N.E.
Shipping Ltd. v. Flota Mercante Grancolombiana,
S.A., 830 F.2d 449, 451-52 (2d Cir. 1987);
RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF
THE UNITED STATES § 403 (1987). The Second Circuit
concluded that the Ministry’s explanation, together

1]

with the record available at the motion to dismiss
stage, established conclusively that it was impossible
for Respondents to comply with both Chinese law and
the Sherman Act. Pet. App. 27a-33a. In addition, the
court found that each of the remaining Timberlane
and Mannington Mills comity abstention factors
“decidedly weigh{ed| in favor of dismissal and
counselled] against exercising jurisdiction in this
case,” Pet. App. 34a, a point which Petitioners never
contested. Accordingly, the Second Circuit vacated
the district court’s judgment, reversed the order
denying the motion to dismiss, and remanded with
instructions to dismiss with prejudice. Pet. App. 38a.

Petitioners filed a petition for rehearing en
banc on October 4, 2016, which was denied without
noted dissent on November 4, 2016. Dkt. 259, Case
No. 13-4791 (2d Cir. Nov. 4, 2016). The petition for a

writ of certiorari followed.
REASONS FOR DENYING THE PETITION

5 PETITIONERS’ ASSERTIONS THAT THE
PANEL SHOULD NOT HAVE REVIEWED
THE DISTRICT COURT’S MOTION TO
DISMISS ORDER DO NOT PRESENT A
QUESTION MERITING THIS COURT'S
REVIEW

1. Petitioners argue that the Second Circuit
should not have reviewed Respondents’ pre-trial
motion to dismiss after trial was held and that
Respondents’ international comity arguments were
not properly preserved in post-trial motions. Pet. 19-
20, 22. But international comity abstention
implicates a federal court’s exercise of subject matter
jurisdiction and is an issue for the court, not a jury.
See, e.g., JP Morgan Chase Bank v. Altos Hornos de
Mexico, S.A. de C.V., 412 F.3d 418, 424 (2d Cir. 2005)

12

(“International comity ... involves not the choice of
law but rather the discretion of a national court to
decline to exercise jurisdiction over a case before
it[.]"). Respondents therefore properly moved to
dismiss principally under Rule 12(b)(1), arguing inter
alia that the court should decline jurisdiction on the
basis of international comity. Dkt. 67 at 2-3, 33, Case
No. 06-md-01738 (E.D.N.Y. Sept. 22, 2006); see also,
e.g., Daewoo Motor Am., Inc. v. Gen. Motors Corp.,
459 F.3d 1249, 1259 (11th Cir. 2006) (affirming
dismissal on the basis of mternational comity im
response to Rule 12(b)(1) motion); Trugman-Nash,
Inc. v. N.Z. Dairy Ba., 954 F. Supp. 733, 737 (S.D.N_Y.
1997) (dismissing antitrust claims for lack of
jurisdiction based on Timberlane factors).
Respondents appealed the denial of their motion to
dismiss on international comity grounds to the
Second Circuit, and Petitioners offer no compelling
argument for disturbing the Second Circuit’s decision

to review that order.

2. International comity abstention was an
explicit basis for Respondents’ motion to dismiss.
Respondents expressly appealed “all” pre-judgment
orders, noted the failure to dismiss the case on
international comity grounds among the questions
presented on appeal, cited the standard of review for
a denial of a motion to dismiss on international
comity grounds, and asserted dismissal on comity
grounds as specific headings in their opening and
reply briefs. Nonetheless, prior to their petition for
rehearing en banc, Petitioners never argued or even
suggested that the Second Circuit could not review
the order on Respondents’ motion to dismiss or that
Respondents had not properly preserved their
international comity abstention argument. There is
no reason for this Court to review a purely procedural

13

question that Petitioners never raised below. See
Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726,

738 (1998).

3. Petitioners claim for the first time before
this Court that the comity issue was somehow waived
because it was not presented in a motion under
Federal Rule of Civil Procedure 50(a). Pet. 21-22.
Petitioners waived their waiver argument by not
presenting it below. And in any event, Petitioners’
argument incorrectly conflates the compulsion
issue -a factual defense tried to the jury—with the
comity issue in which the jury has no role.
Respondents raised the question of comity at all
appropriate points before the district court. The
comity issue was not put before the jury (as Rule 50(a)
assumes) because it is an issue for the court, not an
issue for the jury. Indeed, the jury did not consider
comity at all and was not shown the most relevant
evidence—-Chinese regulations and the Ministry’s
explanation of their meaning.

Moreover, comity does not implicate jury-
triable issues and instead goes to the threshold
question of whether a court should decline to exercise
jurisdiction over a matter. The law clearly allows
appellate review of abstention of jurisdiction even
where not adequately raised at the district court level.
Bellotti v. Baird, 428 U.S. 132, 143 n.10 (1976).
Indeed, “abstention may be raised by the [appellate]
court Sua sponte.” Id. Courts have also routinely held
that international comity issues cannot be waived.
See, e.g., Fortino v. Quasar Co., a Div. of Matsushita
Elec. Corp. of Am., 950 F.2d 389, 391 (7th Cir. 1991)
(“Comity . . . is an accepted reason for an appellate
court to consider issues that would otherwise have
been deemed waived because not raised in [a] timely
fashion[.]”); Allstate Life Ins. Co. v. Linter Grp. Ltd.,

14

994 F.2d 996, 1000 (2d Cir, 1993) (“The presence of
(New York forum selection and choice of law] clauses,
however, does not preclude a court from granting
comity where it is otherwise warranted.”). The
Second Circuit thus acted properly in reviewing
Respondents’ comity argument as a_ threshold
challenge.

4. The decision below does not create a circuit
split as this case does not present the issue suggested
by Petitioners. Pet. 19-20. In fact, reversal with
instruction to dismiss is among the more common
dispositions on appeal, and it is the only appropriate
course if the district court erred in exercising
jurisdiction. See Raines v. Byrd, 521 U.S. 811, 830
(1997) (on direct appeal. vacating judgment of district
court and “remand[ing] with instructions to dismiss
the complaint for lack of jurisdiction”); Moore v. Sims,
442 U.S. 415, 434 (1979) (reversing judgment of
district court and remanding with instructions to
dismiss the case after finding district court should
have abstained): Briscoe v. Bell, 432 U.S. 404, 415
(1977) (finding that courts below erred in finding they
had jurisdiction and vacating with instructions to
dismiss the complaint).

Petitioners rely on cases involving refusal to
review pre-trial orders issued under Federal Rule of
Civil Procedure 12(b)(6)—not jurisdictional
challenges under Rule 12(b)(1). Pet. 20. In Nolfi v.
Ohio Kentucky Oil Corp., the Sixth Circuit held that
after a trial on the merits has occurred, it could not
review the district court’s denial of a Rule 12(b)(6)
motion to dismiss for failure to plead a Section 10(b)
securities claim with sufficient particularity. 675 F.3d
538, 545 (6th Cir. 2012). In ClearOne
Communications, Inc. v. Biamp Systems, the Tenth
Circuit ruled that it would be improper to review a

15

denial of pre-trial motion to dismiss for failure to
state a claim premised on the conclusion that
additional factual development would be necessary.
653 F.3d 1163, 1172 (10th Cir. 2011). For the same
reason, the Tenth Circuit declined to review the pre-
trial order denying the appellant's Rule 12(b)(6)
motion to dismiss seeking resolution of a purely legal
question in In re Gollehon, No. CQ-14-031, 2015 WL
1746496, at *5 (B.A.P. 10th Cir, Apr. 17, 2015). And
in Bennett v. Pippin, the Fifth Circuit held that
because “Rule 12(b)(6) measures the sufficiency of the
plaintiffs allegations|[,] a district court’s denial of a
Rule 12(b)(6) dismissal becomes moot” after a full
trial on the merits. 74 F.3d 578, 585 (5th Cir. 1996).

By contrast, appellate courts routinely review,
after a full trial on the merits, orders involving Rule
12(b)(1) motions to dismiss. See Arbaugh v. YRH
Corp., 546 U.S. 500, 506-07 (2006) (“The objection
that a federal court lacks . . . jurisdiction may be
raised by a party . . . at any stage in the litigation,
even after trial and the entry of judgment. By contrast,
the objection that a complaint fail{s] to state a claim
upon which relief can be granted . . . may not be
asserted post-trial.”) (citations omitted) (emphasis
added); Jn re Lorazepam & Clorazepate Antitrust
Litig., 631 F.3d 537, 540-41 (D.C. Cir. 2011) (“As far
as jurisdiction is concerned, it does not matter if he
should have recognized this sooner. Capron holds
that the parties cannot confer jurisdiction by
consent.”). Indeed, this Court has consistently called
for resolving jurisdictional questions at the earliest
possible stage. Cf. Bolivarian Republic of Venez. v.
Helmerich & Payne Int'l Drilling Co., 581 U.S. __, 137
S. Ct. 1312, 1314 (2017) Gurisdictional question
involving foreign sovereign’; immunity from suit
should ordinarily be resolved “as near to the outset of

16

the case as is reasonably possible” (citing Verlinden
B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493-94
(1983)). The Second Circuit’s procedural approach
thus conforms to the unanimous practice of federal
courts reviewing threshold questions.

5. Finally, even if Petitioners correctly
identified a circuit split—and they have not—this
case is a poor vehicle for resolving it. Regardless of
which order the Second Circuit reviewed, only one
outcome was possible: dismissal.

The Second Circuit accepted the Ministry’s
views as conclusive for purposes of establishing a
conflict between Chinese and U.S. law.:Pet. App. 33a.
In addition, the court found that the record available
at the motion to dismiss stage was sufficient to decide
that the remaining comity abstention factors
“decidedly weigh{ed] in favor of dismissal and
counsel[ed] against exercising jurisdiction[.]” Jd. 34a.
The record developed after the motion to dismiss
stage was therefore irrelevant to the decision below,
regardless of which specific district court order was
reviewed. The Second Circuit's decision to review the
motion to dismiss rather than the Rule 50 motions
therefore was not dispositive. This fact further
militates against review of the first question
presented.

Il. THE COURT OF APPEALS CORRECTLY
RECOGNIZED A TRUE CONFLICT
BETWEEN U.S. AND CHINESE LAW, AND
THERE IS NO CIRCUIT SPLIT ON THE
NARROW ISSUE DECIDED IN THE
OPINION BELOW

1. Under the decisions of this Court and of the
lower courts, abstention on international comity
grounds is warranted where there is a “true conflict”

17

between U.S. and foreign law. Hartford Fire Ins. Co.
v. California, 509 U.S. 764, 797-98 (1993) (citation
omitted); see also Mannington Mills, 595 F.2d at 1297;
Timberlane Lumber, 749 F.2d at 1384. A “true
conflict” exists where foreign law requires activity “in
some fashion prohibited by the law of the United
States” or where “compliance with the laws of both
[the United States and the foreign country] is
otherwise impossible.” Hartford Fire, 509 U.S. at 799.

2. Section 1 of the Sherman Act prohibits any
“contract, combination .. . or conspiracy” that
unreasonably restrains trade. 15 U.S.C. § 1.
Agreements to set prices or output volumes are per se
violations of Section 1. United States v. Trenton
Potteries Co., 273 U.S. 392 (1927). “Any combination
which tampers with price structures is engaged in an
unlawful activity.” United States v. Socony-Vacuum
Oil Co., 310 U.S. 150, 221 (1940). It is the act of
coordination itself—not agreement on any specific
price or output level—that violates the Act. Even
agreements to set “reasonable” prices or output levels
are per se unlawful. United States v. Container Corp.
of Am., 393 U.S. 333, 337 (1969); Socony-Vacuum,
310 U.S. at 224 n.59; see also Plymouth Dealers’ Ass’n
v. United States, 279 F.2d 128, 132 (9th Cir. 1960)
(use of “uniform list price in most instances only as a
starting point, is of no consequence”; illegal per se
because it “was a starting point” and “was in some
instances... respected and followed”).

The only relevent question is thus whether
Chinese law required cvordination on export price or
volume. And Petitioners conceded this conflict in
their briefing below: “Chinese law . . . required the
Chamber and its Subcommittee to actively coordinate
to set vitamin C export prices and quantities.” Dkt.
174 at 25, Case No. 13-4791 (2d Cir. Aug. 11, 2014).

18

The Second Circuit, properly deferring to the
Ministry's explanation of Chinese law and
considering it together with the record oi the motion
to dismiss, reached the same conclusion.?

The Second Circuit observed that’ the
Ministry’s explanation established that vitamin C
manufacturers were “compelled .. . to set and
coordinate vitamin C prices and export volumes”
under the 1997 Notice. Pet. App. 8a. It further
concluded that Respondents’ conduct was compelled
under the 2002 PVC system. The 2002 Notice refers
to “industry-wide negotiated prices” and states that
“PVC procedure shall be convenient for exporters
while it is conducive for the chambers to coordinate
export price and industry self-discipline.” Dkt. 154-2
at 66, Case No. 13-4791 (2d Cir. July 28, 2014).
(emphasis added). The Second Circuit properly
deferred to the Ministry’s reasonable explanation
that these references to “negotiated” and
“coordinate[d]” prices mean that vitamin C
manufacturers remained obligated under the 2002
Notice to negotiate and agree on a minimum export
price. Pet. App. 27a. The Second Circuit further
credited the Ministry’s reasonable explanation that
terms such as “industry _ self-discipline,”
“coordination,” and “voluntary restraint” are terms of
art of Chinese regulatory policy “connoting the
government’s expectation that private actors actively
self-regulate to achieve the government’s policy goals.”
Id. 28a. In other words, the PVC regime was a

2 The Second Circuit recognized that in some cases a trial court
may require discovery on the “countervailing interests and
policies” before ruling on comity. In this case, however, the
record available at the motion to dismiss stage was “sufficient to
determine what Chinese law required and whether abstention
was appropriate.” Pet. App. 37a n.14.

19

decentralized means of regulation whereby the
Ministry would adopt the export prices that the
industry was directed to negotiate. /d.

The Second Circuit therefore concluded that
there was a true conflict between U.S. and Chinese
law because under both the 1997 and 2002 Notices,
vitamin C manufacturers were required to coordinate
to set a minimum export price and thereby violate the
Sherman Act. Pet. App. 33a. The court properly
rejected Petitioners’ argument that there was a
conflict only if Chinese law required agreement on a
specific price, an argument wholly contrary to this
Court’s seminal decisions in Trenton Potteries and
Socony, but which the district had accepted. Jd. 28a,
32a-33a.

3. This Court’s precedent calls for precisely the
degree of deference to a foreign sovereign’s
statements regarding the meaning of their own laws
that was applied by the Second Circuit. In United
States vu. Pink, the Court’ considered’ the
extraterritorial effect of the Russian decrees of
nationalization in light of a declaration from the
Soviet Commissariat for Justice provided through
diplomatic channels at the request of the United
States. 315 U.S. at 219. Finding that the
Commissariat was empowered to interpret Russian
law, the Court “[did] not stop to review all the
evidence in the voluminous record” and accepted the
Commissariat’s official declaration as “conclusive.” /d.
at 217-18, 220. Consistent with Pink, the Second
Circuit held here that conclusive deference is due
where (1) an entity of a foreign sovereign authorized
to interpret the relevant law appears before a U.S.
court and (2) offers an interpretation of the foreign
sovereign’s domestic law that is (3) reasonable under

20

the circumstances presented.* Accord Abbott v. Abbott,
560 U.S. 1, 10 £=(2010) (accepting Chilean
government’s interpretation of Chilean domestic law).

4. There is no circuit split on the narrow issue
decided by the Second Circuit—-the degree of
deference owed to a foreign government when it
appears formally in a case. None of the cases cited by
Petitioners conflicts with the Second Circuit’s
decision. In Access Telecom, Inc. v. MCI
Telecommunications Corp., defendants relied on an
official circular produced outside of the litigation by a
Mexican administrative agency. 197 F.3d 694, 714
(5th Cir. 1999). No agency representative appeared
before the court at any stage in the pri seedings to
endorse the circular, and, in any event, it was not
clear that the agency was authorized to interpret,
rather than simply enforce, Mexican law. Jd.; cf. Pet.
App. 6a (the Ministry is the “highest authority within
the Chinese government authorized to regulate
foreign trade” and provided a statement on the
meaning of regulations that the Ministry itself
issued).

United States v. McNab did not even concern
the meaning of Honduran law or a conflict between
U.S. and Honduran law, and in any event it is clearly
distinguishable. The question in McNab was merely
whether Honduran regulations were valid during the
relevant time period. 331 F.3d 1228 (11th Cir. 2003).
The Honduran’ government had _ consistently

3 Petitioners mistakenly contend that there was no “sworn
evidentiary proffer” in this case. Pet. 17 n.5. As the Second
Circuit noted, the “proffer” in this case is not the Ministry's
amicus brief itself but the Mitnick Declaration attached to the
brief, which provided authenticated copies of the regulations
cited by the Ministry. Pet. App. 8a n.6.

21

represented that the defendants had violated valid
Honduran’ regulations throughout the U.S.
Government's investigation and prosecution of Lacey
Act violations. Jd. at 1233-35. Only after the
defendants were convicted did the Honduran
government change course and contend in an amicus
brief filed by the Honduran Embassy that the
underlying Honduran regulations were invalid. Id. at
1240. Faced with conflicting statements by Honduran
government officials, the court conducted its own
evaluation of the validity of the regulations at issue.
Id. at 1242. In sharp contrast, in this case the
Chinese government has consistently maintained
that Respondents were required under Chinese law
to coordinate export prices. Moreover, the Eleventh
Circuit’s decision expressly approved district courts
generally deferring to the statements of “foreign
officials charged with enforcing the laws of their
country,” deeming such statements to be “[a]mong the
most logical sources for the court to look to in its
determination of foreign law.” Jd. at 1241. The
holding in McNab thus entirely aligns with the
Second Circuit’s approach.

Petitioners’ reliance on McKesson Corp. v.
Islamic Republic of Iran, 672 F.3d 1066 (D.C. Cir.
2012), is similarly misplaced. Iran conceded that
Iranian law provided for a private cause of action
under the Treaty of Amity but argued that the Treaty
did not allow a plaintiff to invoke that cause of action
in a U.S. court. Iran’s arguments on this point
concerned the text, context, and _ practical
consequences of the Treaty, not Iran’s domestic law.
Id. at 1079-80. Moreover, Iran had offered numerous
arguments and affidavits on various points of Lranian
law in the course of a contentious, decades-long
litigation arising under the Treaty of Amity, through

22

which Iran had voluntarily subjected itself to the
jurisdiction of U.S. courts. Jd. at 1070-72. The court
properly declined to defer to lran’s interpretations
that were inconsistent with its prior statements. See,
e.g., id. at 1081-82 (finding that lran’s argument that
its domestic law precluded liability for the actions of
the government’s agents was “fatally flawed” because
it contradicted Iran’s representations that the Treaty
of Amity was lex specialis superseding Iranian
general law); McKesson HBOC, Inc. v. Islamic
Republic of Iran, 271 F.3d 1101, 1108-09 (D.C. Cir.
2001) (declining to defer to Iran’s argument that
lranian law mandated a “come to the company”
requirement for dividend payments in light of Iran’s
own affidavits stating merely that there was a strong
presumption that Iranian companies would pay
dividends in that way), vacated in part, 320 F.3d 280
(D.C. Cir. 2003). In this case, the Ministry’s
statement concerned the meaning of China’s domestic
laws and regulations, not a treaty, and its
representations remained consistent throughout the
litigation.

In Chavez v. Carranza, 559 F.3d 486 (6th Cir.
2009), the Republic of El Salvador filed an amicus
brief arguing that a suit under the U.S. Alien Tort
Claims Act and Torture Victims Protection Act
should not proceed because it would interfere with
the Salvadoran Amnesty Law. Brief of Amicus Curiae
The Republic of El Salvador in Support of Appellant
at 4-5, Chavez v. Carranza, Case No. 06-6234 (6th Cir.
Apr. 18, 2008). In other words, the foreign
government merely articulated a conflict between the
goals of a domestic policy initiative and the proposed
application of U.S. law. However, the brief pointed to
no provision of the Amnesty Law suggesting that it
was intended to preclude prosecution or liability

23

outside of El Salvador. Indeed, the Sixth Circuit
noted that the Amnesty Law “cannot be interpreted
to apply extraterritorially.” 559 F.3d at 495
(emphasis added). Accordingly, the court was not
bound to defer. Cf. Pet. App. 25a n.8 (deference may
not be appropriate where a foreign sovereign’s
interpretation is not supported by “documentary
evidence or reference of law” (citing Karaha Bodas Co.
v. Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (“Pertamina”), 313 F.3d 70, 92 (2d Cir. 2002)).
Here, the Ministry offered a _ reasonable
interpretation of specific ambiguous provisions of the
relevant Chinese regulations. Pet. App. 27a-28a.

Finally, In re Oil Spill by the Amoco Cadiz Off
the Coast of France on March 16, 1978, 954 F.2d 1279
(7th Cir. 1992), cited by Petitioners as conflicting
with the decision below, Pet. 26-27, in fact confirms
the rule that conclusive deference is owed to a foreign
sovereign when the conditions of the Second Circuit’s
holding are met. The Republic of France appeared as
a party and offered an interpretation of an ambiguous
provision of French law that the court confirmed was
“plausible” based on the text of the provision. 954
F.2d at 1312. The court’s observation that the French
government had consistently advanced the same
position in other disputes serves merely as
confirmation that the French government’s position
in Amoco was reasonable. Id. Although the Seventh
Circuit used language of “substantial deference,”
neither its conclusion nor its approach differs from
the Second Circuit’s below. Jd. (“If all of the litigants
were private parties, we would need to decide
whether this understanding of the law is correct. But
the Republic of France appears in this court and
assures us that Article 16 applies to oil that reaches
shore. . . . Giving the conclusions of a sovereign

24

nation less respect than those of an administrative
agency [under Chevron) is unacceptable.”).

In sum, each of the cases cited by Petitioners
as inconsistent with the decision below either
afforded similarly conclusive deference to the foreign
sovereign or involved circumstances where (1) the
foreign sovereign did not formally appear before the
Court, (2) the foreign sovereign did not interpret its
own domestic law, and/or (3) the foreign sovereign
offered an obviously unreasonable interpretation
under the circumstances. There is thus no conflict in
the lower courts regarding the degree of deference
owed to a foreign sovereign’s interpretation of its own
domestic law when formally presented to a U.S. court,
and the Second Circuit’s adherence to this Court’s
guidance in Pink does not warrant review.

5. Nor ts there any reason to revisit the basic
principle of deference affirmed in Pink. Indeed, this
case exemplifies the need for a clear rule of conclusive
deference given the “unique and complex nature of
the Chinese legal- and economic-regulatory system
and the stark differences between the Chinese system
and ours.” Pet. App. 29a. A clear rule of conclusive
deference is particularly important in antitrust cases,
which the Second Circuit recognized may present
“unique international concerns.” Jd. 15a. The
deference standard set out in Pink allows courts to
more capably and credibly balance the competing
sovereign interests at stake in antitrust cases
involving foreign conduct: the U.S. Government’s
interest in protecting American commerce and
foreign governments’ interests in regulating their
own economies. Cf. F. Hoffmann-La Roche Ltd v.
Empagran S.A., 542 U.S. 155, 165 (2004) (“No one
denies that America’s antitrust laws, when applied to
foreign conduct, can interfere with a foreign nation’s

25

ability independently to regulate its own commercial
affairs.”).

6. Petitioners’ speculation that foreign
governments might be improperly influenced to
protect defendants in U.S. proceedings, Pet. 27-28,
provides no reason for this Court’s review. The
passage Petitioners cite from United States v. McNab
has no bearing on the issues presented by this case.
The concern expressed by the Eleventh Circuit in
McNab was that a foreign government might
retroactively invalidate its laws to _ frustrate
application of the Lacey Act, which depends upon
violation of foreign law as a predicate. 331 F.3d at
1242. This has nothing to do with representations
made by foreign governments as to the meaning of
their existing laws before U.S. courts. Petitioners
cannot point to any case where a foreign sovereign
has subverted a U.S. tribunal by falsely asserting a
conflict between its law and U.S. law or by
manufacturing such a _ conflict for purposes of
litigation.

In addition, courts already have the flexibility
to take jurisdiction in appropriate cases, even where
the court is bound to defer to a foreign sovereign’s
representation that there is a true conflict between
U.S. and foreign law. The Timberlane and
Mannington Mills comity balancing test applied
below sets out additional relevant factors bearing on
whether abstention is appropriate. Mannington Mills,
595 F.2d at 1297-98; Timberlane Lumber, 549 F.2d at
614-15. The Second Circuit found that every one of
these nine factors “decidedly weigh{s| in favor of
dismissal and _ counsel{s] against exercising
jurisdiction” in this case, Pet. App. 34a, and
Petitioners have never disputed that conclusion.

26

Finally, defining a rule of law on the basis of
speculation that a foreign government might
improperly impede the application of U.S. law in a
U.S. court is antithetical to the principles of foreign
relations. See Underhill v. Hernandez, 168 U.S. 250,
252 (1897) (“[Clourts of one country will not sit in
judgment on the acts of the government of another,
done within its own territory.”). The district court’s
speculation about the Chinese government’s motives
illustrates the problem. The Chinese government
made an unprecedented appearance before a U.S.
court to provide the district court with the benefit of a
clear, authoritative explanation of Chinese law. Pet.
App. 6a n.5. In return, the district court suggested
that the Chinese government’s chosen regulatory
scheme was a “post-hoc attempt to shield defendants’
conduct from antitrust scrutiny.” Jd. 12la-122a. The
Chinese government subsequently filed an official
diplomatic statement with the U.S. Department of
State protesting its treatment and reconfirming the
“great importance” it places on proper respect for its
sovereignty before the courts of other nations.
Diplomatic Correspondence between Embassy for the
People’s Republic of China and the United States
Department of State, Dkt. 111-3, Case No. 13-4791
(2d Cir. May 23, 2014). This shows that diplomatic
negotiations and multilateral institutions, not private
lawsuits in federal court, provide the proper forum
for resolving any concerns the United States may
have with Chinese export policies.

The significant international tension caused by
the district court’s reasoning shows the wisdom of the
rule of deference announced in Pink and faithfully
applied by the decision below. Speculation about
potential gamesmanship by foreign governments
need not raise concerns, for the Second Circuit’s

27

holding expressly requires that the proffered
interpretation be “reasonable” to receive deference.
The Court therefore has no cause to revisit that rule
and every reason to allow the controversy presented
by this case to end here.

Ill. THERE IS NO REASON TO DISTURB
SETTLED LOWER COURT LAW ON THE
APPLICABILITY OF INTERNATIONAL
COMITY IN ANTITRUST CLASS
ACTIONS

Petitioners’ final question presented asks the
Court to wade into an academic debate over the
propriety of international comity abstention vel non.
Whatever academic interest the question may hold, it
does not in any way meet this Court’s criteria for
review.

1. As a threshold matter, Petitioners have
waived their argument that international comity
abstention should not apply on a case-by-case basis
because they failed to raise it at any stage in the
proceedings below. Respondents have consistently
urged the courts below to dismiss this case as a
matter of international comity. In _ response,
Petitioners conceded that the doctrine remains valid,
but argued only that comity abstention does not
apply because the evidence of conflict, in their
(incorrect) view, was insufficient. Petitioners have
never argued (until now) that the multifactor test
outlined in Timberlane and Mannington Mills can no
longer be applied to abstain on a case-by-case basis.
Even in their motion for rehearing en banc, with full
knowledge of the Second Circuit’s reasoning,
Petitioners did not contend that the Second Circuit
erred in analyzing international comity under that
test.

28

Despite ample opportunity to do so, nowhere
below have Petitioners argued that courts cannot
abstain from exercising jurisdiction on a case-by-case
basis. Petitioners should not be allowed to assert this
argument for the first time before this Court.

2. Even if Petitioners had argued this issue
below, Petitioners’ request for relief would effectively
eliminate the comity abstention doctrine as a judicial
consideration. Such a result would overturn decades
of settled law without justification.

This Court has long’ recognized that
international comity is a fundamental judicial
consideration guiding the exercise of jurisdiction in
cases involving foreign parties: “[W]Je have long
recognized the demands of comity in suits involving
foreign states, either as parties or as sovereigns with
a coordinate interest in the htigation.” Societe
Nationale Industrielle Aerospatiale v. U.S. Dist. Court
for the S. Dist. of Iowa, 482 U.S. 522, 546 (1987).
Indeed, “the concept of international comity
requires .. . a more particularized analysis of the
respective interests of the foreign nation and the
requesting nation|[.]” Jd. at 543-44.

The international comity test that was
formulated in Timberlane and supplemented in
Mannington Mills has been settled law in the lower
courts for decades.’ Indeed, it has been formally

4 See, e.g., Mujica v. AirScan Inc., 771 F.3d 580, 602-04 (9th Cir.
2014) (analyzing Timberlane factors even after finding true
conflict not required for adjudicatory comity analysis), cert.
denied, 136 S. Ct. 690 (2015); Republic of Philippines v.
Westinghouse Elec. Corp., 43 F.3d 65, 76 (3d Cir. 1994) (“[A]ny
exercise of jurisdiction to prescribe and enforce sanctions based
on the effects of foreign activity in a domestic court requires the
court to balance the interests it seeks to protect against the

29

adopted in Section 403 of the American Law
Institute’s Restatement (Third) of Foreign Relations
Law of the United States. Although Professor
Hovenkamp initially criticizes the Timberlane comity
test, his treatise further acknowledges not only that
it has been “well received,” but also that courts rarely
abstain from exercising jurisdiction on comity
grounds. 1B PHILLIP E. AREEDA & HERBERT
HOVENKAMP, ANTITRUST LAW { 273 (4th ed. 2016).
The Timberlane test hardly provides the “get out of
jail free card” that Petitioners imagine. Pet. 6. Rather,
“the flexibility of the comity analysis allows courts to
take into account the legal, political, and economic
conditions that shape foreign defendants’ actions.”
Benjamin G. Bradshaw, et al., International Comity
in the Enforcement of U.S. Antitrust Law in the Wake
of In re Vitamin C, 31 ANTITRUST 87, 91 (2017).

Despite having had an opportunity to strike
down the Timberlane multifactor test in Hartford
Fire, this Court expressly refused to do so after
finding no true conflict between American and
British law. 509 U.S. at 799 (“We have no need in this
litigation to address other considerations that might
inform a decision to refrain from the exercise of
jurisdiction on grounds of international comity.”).
Indeed, the Court’s conflict of law analysis was
consistent with the Timberlane test and with the
analysis performed by the panel below. See Pet. App.
33a (analyzing remaining Timberlane comity factors
after determining true conflict between U.S. and
Chinese law).

interests of any other sovereign that might exercise authority
over the same conduct.” (citing Timberlane)).

30

Petitioners claim that the Court rejected the
Timberlane test in F. Hoffmann-La Roche Ltd v.
Empagran S.A. Pet. 31. Not so. Empagran addressed
the extraterritorial application of the Foreign Trade
Antitrust Improvements Act (“FTAIA”), not whether
comity abstention would be appropriate in a
particular case. See 542 U.S. at 168-69 (discussing
whether independent foreign injury cases are within
the scope of the FTAIA). The Court looked to the
FTAIA’s language and legislative history to
determine whether Congress gave federal courts
statutory jurisdiction to hear cases involving purely
foreign conduct. /d. at 169-70. That is not at issue
here. See id. at 172-73 (acknowledging that scope of
FTAIA is a_ separate consideration from comity
concerns under Timberlane). Before the Second
Circuit, Respondents argued that the district court
should have abstained from exercising jurisdiction in
this case because Chinese law compelling
Respondents’ conduct conflicted with American
antitrust law. The panel below dismissed this case on
those grounds, not because of statutory jurisdiction
concerns.°®

Petitioners’ remaining authority similarly does
not address international comity abstention on a
case-by-case basis. In Morrison v. National Australia.
Bank Ltd., the Court analyzed whether Section 10(b)

° This Court has noted that the U.S. Government may be able to
obtain broader relief than private plaintiffs. See Empagran, 542
U.S. at 170 (“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.”); see also U.S. DEP’T OF JUSTICE & FED.
TRADE COMM’N, ANTITRUST GUIDELINES FOR INTERNATIONAL
ENFORCEMENT AND COOPERATION 25-26 (2017). But this case is
brought by private plaintiffs, not the government.

31

of the Securities Exchange Act applies to cases
involving securities traded on foreign exchanges. 561
U.S. 247, 261 (2010). The Court concluded that
applying “judicial-speculation-made-law” was not
appropriate and that instead, it should preserve “a
stable background against which Congress can
legislate|.|” /d. at 261.° But Congress has already
legislated on the _ extraterritoriality of federal
antitrust laws, and in doing so, made no change to
the international comity abstention doctrine. See
Hartford Fire, 509 U.S. at 798; H.R. Rep. No. 97-686,
at 13 (1982) (‘If a court determines that the
requirements for subject matter jurisdiction are met,
(the Foreign Trade Antitrust Improvements Act]
would have no effect on the court!’s}] ability to employ
notions of comity or otherwise to take account of the
international character of the transaction.” (citing
Timberlane)).

3. Contrary to Petitioners’ claims, Pet. 33-34,
the opinion below preserves the distinction between a
foreign sovereign compulsion defense and a true

6 The additional cases Petitioners cite also address statutary
jurisdiction, which is not at issue here. See In re Monosodium
Glutamate Antitrust Litig., 477 F.3d 535, 538-39 (8th Cir. 2007)
(determining whether foreign purchases of allegedly price fixed
praducts were within the scope of the FTALA); Empagran S.A. v.
F. Hoffmann-La Roche Lid., 417 ¥.3d 1267, 1271 (D.C. Cir. 2005)
(same). And in /ndustrial Investment Development Corp, v.
Mitsui & Co., the Fifth Circuit actually applied the 7imberiane
test. 671 F.2d 876, 885 (Sth Cir. 1982), vacated, 460 U.S. 1007
(1983). Petitioners’ citation to Jndustrial Investment
Development Corp. actually referred to In re Uranium Antitrust
Litigation, 617 F.2d 1248, 1255 (7th Cir. 1980)—not
Timberlane—and concerned the proper standard of review for a
district court's decision as to whether to exercise extraterritorial
jurisdiction, not whether courts should apply the Timberlane
test. Pet. 32.

32

conflict for purposes of comity analysis. Whether
Respondents’ specific conduct—exporting vitamin C
at the specific prices challenged by Petitioners—-was
compelled by Chinese law does not “weigh heavily” in
a proper “true conflict” analysis. Pet. App. 32a-33a.
The key question is whether “compliance with the
laws of both countries is impossible”’—that is,
“whether the PVC regime, on its face, required
[Respondents] to violate U.S. antitrust laws in the
first instance.” Jd. (citing Hartford Fire, 509 U.S. at
799). The Ministry’s statements, coupled with
Petitioners’ concession that Chinese law required
coordination on price and output, resolve that
question.

The panel below did not address Respondents’
foreign sovereign compulsion defense and, as such,
whether the Second Circuit would have ruled for
Respondents on those grounds is irrelevant. See Pet.
App. 37a-38a. The jury’s factual finding on
compulsion is of no concern because the most
important evidence—China’s statements that the
conduct was compelled—was excluded from the
evidence available to the jury. On the other hand, the
Second Circuit found that the Ministry’s official
statements “should be credited and _ accorded
deference” here. See id. 27a. The panel had no need to
reach the compulsion defense, but there is no reason
to believe the result would have been different had
the court of appeals decided the case on compulsion
grounds rather than comity.

4. The amicus brief of Professors Dodge and
Stephan also fails to provide support for review of the
third question presented. The amici rely on a section
of the tentative draft of the Fourth Restatement that

33

has merely been presented “for discussion only.” ’
Restatement (Fourth) of Foreign Relations Law of the
United States, at xxi (Am. Law Inst., Tentative Draft
No. 2, Mar. 22, 2016). As discussed above, Section 403
of the Third Restatement remains the official position
of the American Law Institute. Further, the
authorities relied on by the amici overlap with the
cases cited by Petitioners and only address the
extraterritorial scope of legislation, not whether a
court should abstain from exercising jurisdiction in a
particular case. See supra, at 28-30 (distinguishing
Empagran and Morrison); RJR Nabisco, Inc. ov.
European Cmty., 136 S. Ct. 2090, 2107-08 (2016)
(discussing whether RICO applies to cases involving
foreign injuries). There is simply no conflict between
the decision below and these cases.

CONCLUSION

For the foregoing reasons, the petition for a
writ of certiorari should be denied.

7 Cf. Bolivarian Republic of Venez., 137 S. Ct. at 1321
(referencing different section of Restatement (Fourth) that has
been “approved” and may be “cited as representing the
Institute’s position until the official text is published”); see
Restatement (Fourth) of Foreign Relations Law of the United
States § 455, Reporter’s Note 12, at 9 (Am. Law Inst., Tentative
Draft No. 2, Mar. 22, 2016). The portion cited by amici has not
been approved.

June 5, 2017

34

Respectfully Submitted,

JONATHAN M. JACOBSON
Counsel of Record

DANIEL P. WEICK

JUSTIN A. COHEN

WILSON SONSINI GOODRICH

& ROSATI, P.C.

1301 Avenue of the

Americas, 40th Floor

New York, New York 10019

(212) 497-7700

jjacobson@wsgr.com

Scott A, SHER

BRADLEY T. TENNIS
WILSON SONSINI GOODRICH
& ROSATI, P.C.

1700 K Street, N.W..,

Fifth Floor

Washington, D.C. 20006
(202) 973-8800

Attorneys for Respondents

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0743%3A03. Public record. Not legal advice.