U.S. Must Not Become World's Antitrust Regulator, Business Tells Supreme Court

Paris and Washington, February 26, 2004 – The International Chamber of Commerce has called on the United States Supreme Court to overturn a lower court decision subjecting transactions among foreign companies outside the United States to American antitrust jurisdiction.

ICC, representing companies in more than 130 countries, told the Supreme Court that the decision would impose a massive burden on international companies and cause them to rethink completely their manner of doing business and their potential exposure under U.S. antitrust law.

The business organization filed an amicus curiae – friend of the court – brief to support an appeal by a group of European pharmaceutical companies against a ruling of the Court of Appeals of the District of Columbia. The appeals court had ruled that foreign antitrust plaintiffs may sue in U.S. courts for antitrust damages entirely incurred outside the United States.

Business told the Supreme Court that the decision would impose a massive burden on international companies

The companies contesting the appeals court ruling are Hoffmann-La Roche, BASF, Rhône-Poulenc and some of their subsidiaries. The ruling referred to a price fixing suit brought by an Ecuadorean company, Empagran, involving sales of vitamins.

With more than 8,000 member companies in over 140 countries, ICC is the largest, most representative private sector association in the world. It is represented in the U.S. by the United States Council for International Business (USCIB), its American national committee based in New York.

Paul Victor, a New York lawyer who led the drafting of the ICC brief, said: "If permitted to stand, the decision would open the U.S federal courts to a flood of claims brought by foreign parties, even though the claims have no direct connection to the United States."

To sue in U.S. courts, claimants would merely have to demonstrate that the alleged conspiracy also gave rise to some other claim that did have a sufficient relationship to U.S. commerce, Mr. Victor, of the law firm Weil, Gotshal & Manges, said.

The ICC brief said: "If the ruling of the Court of Appeals is allowed to stand, the United States will indeed become the regulator of the competitive conditions of markets throughout the world.

"That result would impose a massive burden on international businesses, and in fact would likely exceed the limits of Congress's jurisdiction to prescribe laws affecting the interests of other nations."

The ICC brief to the Supreme Court said that the risk of being exposed to class actions and the imposition of treble damages was of critical importance to businesses engaging in international trade. The Court of Appeals' approach would, in essence, subject virtually every transaction in an allegedly "international " industry to the regulation of United States laws and courts.

This would be so "no matter where that transaction took place, regardless of the nationality of the seller and purchaser, and regardless whether another inconsistent, or even conflicting competition regime also applied to the same business transaction."

The brief said the majority view of the Court of Appeals was contrary to the intent of the U.S. Congress under the Foreign Trade Antitrust Improvements Act. A fundamental tenet of U.S. antitrust jurisdictional analysis was that "American antitrust laws do not regulate the competitive conditions of other nations' economies " .

ICC pictured the reaction if U.S. companies were dragged into foreign courts in connection with treble damage class action lawsuits under foreign law concerning product sales entirely with the United Sates.

"The domestic business community, Congress and U.S. courts would without question be up in arms. More extreme possibilities present themselves: in an industry where products are sold throughout the world, US (and foreign) businesses could find themselves facing litigation regarding those same US transactions in dozens of courts throughout the world."

In addition to ICC and the litigating parties in the case, seven countries, including the UK, Germany, Japan and Canada, filed amicus briefs supporting ICC's interpretation of the law.

Recently, both ICC and USCIB joined in a related amicus brief to the Supreme Court, concerning what business groups see as misuse of the U.S. Alien Tort Statute to lodge spurious human rights lawsuits against multinational companies. Oral arguments for that case are scheduled for March.

USCIB promotes an open system of global commerce. Its membership includes some 300 leading U.S. companies, professional services firms and associations whose combined annual revenues exceed $3 trillion. As American affiliate of the leading international business and employers organizations, including ICC, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade.

Contacts:
Jonathan Huneke, USCIB Communications
(212) 703-5043 or jhuneke@uscib.org

Dawn Bartram, ICC Communications
(011-33-1) 49.53.29.07 or dawn.bartram@iccwbo.org

Full text of the ICC amicus brief to the Supreme Court (PDF file)

ICC website

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