Antitrust

1 1 4 The sole question on review for the Supreme Court was whether U.S. courts must defer to a foreign government's reasonable construction of its own laws. On June 14, 2018, the Supreme Court unanimously reversed the Second Circuit's ruling, holding that a foreign sovereign's interpretation of its own law is not "conclusive" for U.S. courts, and that courts need only give "respectful consideration" to foreign sovereign submissions. THE DISTRICT COURT RULING Plaintiffs were purchasers of vitamin C in the United States who alleged that the defendants, Chinese vitamin manufacturers, formed an agreement to sell vitamin C in the U.S. at artificially high prices in violation of U.S. antitrust law. The defendants did not contest that they agreed to fix prices; instead, they filed a motion to dismiss on the basis that applicable Chinese regulations required them to do so. In a historic move, the Ministry of Commerce of the People's Republic of China filed an amicus curiae brief with the district court in support of dismissal, explaining that the defendants, as members of a chamber of commerce in China, were required to implement the Ministry's regulations regarding the vitamin C trade, which compelled manufacturers to set prices "at or above the minimum acceptable price set by coordination through the Chamber." Despite the Ministry's intervention, the U.S. District Court for the Eastern District of New York denied the motion to dismiss and instead ordered the parties to engage in discovery on the issue of whether the defendants were indeed compelled by Chinese law to fix prices. Following discovery, the defendants once again asked the Court to dismiss the lawsuit on summary judgment, and the Court again denied the defendants' motion, expressly "declining to defer to the Ministry's interpretation of Chinese law" in light of certain provisions in the Chinese regulations that appeared to undermine the Ministry's interpretation. In other words, the District Court refused to credit the Chinese government's explanation of its own law. The case went to trial and in March 2013, a federal jury found the Chinese vitamin manufacturers (those who had not yet settled with plaintiffs) liable for violating Sherman Act Section 1, and awarded the plaintiffs nearly US$147 million in treble damages. The Chinese manufacturers appealed. SECOND CIRCUIT'S DECISION On appeal, the Second Circuit considered whether the District Court abused its discretion by improperly asserting jurisdiction on international comity grounds. Finding in the affirmative, the Second Circuit vacated the District Court's order denying the defendants' motion to dismiss and returned the case to the lower court with instructions to dismiss with prejudice. ANTITRUST LITIGATION 21 T H E D E F E N D A N T S , A S M E M B E R S O F A C H A M B E R O F C O M M E R C E I N C H I N A , W E R E R E Q U I R E D T O I M P L E M E N T T H E M I N I S T R Y ' S R E G U L A T I O N S In re vitamin C Antitrust Litigation

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