F. Hoffman-La Roche Ltd. v. Empagran S. A.
Annotate this Case
542 U.S. 155 (2004)
OCTOBER TERM, 2003
F. HOFFMANN-LA ROCHE LTD. V. EMPAGRAN S.A.
SUPREME COURT OF THE UNITED STATES
F. HOFFMAN-La ROCHE LTD. et al. v. EMPAGRAN S. A. et al.
certiorari to the united states court of appeals for the district of columbia circuit
No. 03–724. Argued April 26, 2004—Decided June 14, 2004
The Foreign Trade Antitrust Improvements Act of 1982 (FTAIA) provides that the Sherman Act “shall not apply to conduct involving trade or commerce … with foreign nations,” 15 U. S. C. §6a, but creates exceptions for conduct that significantly harms imports, domestic commerce, or American exporters. In this case, vitamin purchasers filed a class action alleging that vitamin manufacturers and distributors had engaged in a price-fixing conspiracy, raising vitamin prices in the United States and foreign countries, in violation of the Sherman and Clayton Acts. As relevant here, defendants (petitioners) moved to dismiss the suit as to the foreign purchasers (respondents), foreign companies located abroad, who had purchased vitamins only outside United States commerce. In dismissing respondents’ claims, the District Court applied the FTAIA and found none of its exceptions applicable. The Court of Appeals reversed, concluding that the FTAIA’s exclusionary rule applied, but so did its exception for conduct that has a “direct, substantial and reasonably foreseeable effect” on domestic commerce that “gives rise to a [Sherman Act] claim,” §§6a(1)(A), (2). Assuming that the foreign effect, i.e., higher foreign prices, was independent of the domestic effect, i.e., higher domestic prices, the court nonetheless concluded that the Act’s text, legislative history, and policy goal of deterring harmful price-fixing activity made the lack of connection between the two effects inconsequential.
Held: Where the price-fixing conduct significantly and adversely affects both customers outside and within the United States, but the adverse foreign effect is independent of any adverse domestic effect, the FTAIA exception does not apply, and thus, neither does the Sherman Act, to a claim based solely on the foreign effect. Pp. 4–19.
(a) Respondents’ threshold argument that the transactions fall outside the FTAIA because its general exclusionary rule applies only to conduct involving exports is rejected. The House Judiciary Committee changed the bill’s original language from “export trade or export commerce,” H. R. 5235, to “trade or commerce (other than import trade or import commerce)” deliberately to include commerce that did not involve American exports but was wholly foreign. Pp. 5–6.
(b) The FTAIA exception does not apply here for two reasons. First, this Court ordinarily construes ambiguous statutes to avoid unreasonable interference with other nations’ sovereign authority. This rule of construction reflects customary international law principles and cautions courts to assume that legislators take account of other nations’ legitimate sovereign interests when writing American laws. It thereby helps the potentially conflicting laws of different nations work together in harmony. While applying America’s antitrust laws to foreign conduct can interfere with a foreign nation’s ability to regulate its own commercial affairs, courts have long held such application nonetheless reasonable, and hence consistent with prescriptive comity principles, insofar as the laws reflect a legislative effort to redress domestic antitrust injury caused by foreign anticompetitive conduct. However, it is not reasonable to apply American laws to foreign conduct insofar as that conduct causes independent foreign harm that alone gives rise to a plaintiff’s claim. The risk of interference is the same, but the justification for the interference seems insubstantial. While some of the anticompetitive conduct alleged here took place in America, the higher foreign prices are not the consequence of any domestic anticompetitive conduct sought to be forbidden by Congress, which rather wanted to release domestic (and foreign) anticompetitive conduct from Sherman Act constraint when that conduct causes foreign harm. Contrary to respondents’ claim, the comity concerns remain real as other nations have not in all areas adopted antitrust laws similar to this country’s and, in any event, disagree dramatically about appropriate remedies. Respondents’ alternative argument that case-by-case comity analysis is preferable to an across the board exclusion of foreign injury cases is too complex to prove workable. Second, the FTAIA’s language and history suggest that Congress designed the Act to clarify, perhaps to limit, but not to expand, the Sherman Act’s scope as applied to foreign commerce. There is no significant indication that at the time Congress wrote the FTAIA courts would have thought the Sherman Act applicable in these circumstances, nor do the six cases on which respondents rely warrant a different conclusion. Pp. 6–16.
(c) Respondents’ additional linguistic arguments might show a natural reading of the statute, but the comity and history considerations previously discussed make clear that respondents’ reading is not consistent with the FTAIA’s basic intent. Their deterrence-based policy argument is also unavailing in light of the contrary arguments by the antitrust enforcement agencies. Pp. 16–18.
(d) On remand, the Court of Appeals may consider whether respondents properly preserved their alternative argument that the foreign injury here was not in fact independent of the domestic effects; and, if so, it may consider and decide the related claim. Pp. 18–19.
315 F. 3d 338, vacated and remanded.
Breyer, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Stevens, Kennedy, Souter, and Ginsburg, JJ., joined. Scalia, J., filed an opinion concurring in the judgment, in which Thomas, J., joined. O’Connor, J., took no part in the consideration or decision of the case.