942 F.3d 88
2d Cir.2019Background
- Biocad JSC, a Russian pharmaceutical firm that developed biosimilars to Roche’s monoclonal antibody cancer drugs, alleged that Roche, Genentech, La Roche, and R‑Pharm conspired in Russia to block Biocad’s ability to enter the U.S. market after patent exclusivity expired.
- Alleged tactics included discriminatory/pricing schemes, underwriting below‑cost sales through a Russian distributor, kickbacks and exclusion from Russian government programs, restricting U.S. drug samples needed for FDA testing, tying, and fraudulent auction bids.
- Biocad sued in Southern District of New York under the Sherman Act, Clayton Act, Robinson‑Patman Act, and New York Donnelly Act seeking damages and injunctive relief.
- The district court dismissed under Rules 12(b)(1) and 12(b)(6), finding Biocad failed to plead antitrust standing and that the Foreign Trade Antitrust Improvements Act (FTAIA) barred the claims.
- On appeal the Second Circuit affirmed: Biocad’s claims fall outside the Sherman Act because the alleged foreign conduct did not "involve import trade or import commerce" as required by the FTAIA; Biocad had waived reliance on the FTAIA’s domestic‑effects exception.
- Chief Judge Katzmann concurred, agreeing with the FTAIA holding and writing separately about the appropriate standard for pleading antitrust standing for potential entrants (preparedness factors, not a rigid probability‑of‑FDA‑approval rule).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FTAIA import exclusion applies | Biocad: Defendants’ foreign conduct was directed at and intended to prevent Biocad’s future imports into the U.S., so it “involved” import commerce | Roche et al.: The FTAIA import exclusion covers only foreign conduct that directly/immediately constitutes or acts upon import transactions, not merely conduct intended to affect future imports | Held: Import exclusion does not apply here; Biocad’s allegations concern foreign conduct with only speculative/future effects on U.S. import commerce and thus fall outside the Sherman Act |
| Whether the FTAIA domestic‑effects exception saves the claims | Biocad: (on appeal) the domestic‑effects exception applies because defendants intended and caused effects in the U.S. | Defendants: Biocad waived that argument below; facts do not show a direct, substantial, reasonably foreseeable domestic effect giving rise to a Sherman Act claim | Held: Biocad waived reliance on the domestic‑effects exception; court declined to consider it on appeal |
| Antitrust standing (preparedness of a would‑be entrant) | Biocad: adequately pleaded intent and preparedness to enter the U.S. market once exclusivity expired | Defendants: Biocad failed to plead antitrust injury because it was not a market participant and did not plausibly show it was prepared (e.g., probable FDA approval) | Held: Court did not reach standing because FTAIA disposition was dispositive; concurrence would treat preparedness as fact‑intensive and use multi‑factor test rather than a rigid probable‑FDA‑approval rule |
| State Donnelly Act and Clayton injunctive relief | Biocad: state and injunctive claims should survive if federal antitrust claims are viable | Defendants: Donnelly tracks federal law; injunctive relief depends on a viable Sherman Act claim | Held: Donnelly and Clayton Section 16 claims fail because federal Sherman Act claims are barred by FTAIA |
Key Cases Cited
- F. Hoffmann‑La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004) (explaining FTAIA’s general bar and exceptions for foreign conduct)
- Lotes Co. v. Hon Hai Precision Indus. Co., 753 F.3d 395 (2d Cir. 2014) (interpreting FTAIA’s "direct" requirement and cautioning against collapsing import and domestic‑effects exceptions)
- Kruman v. Christie’s Int’l PLC, 284 F.3d 384 (2d Cir. 2002) (analyzing whether foreign conduct targeted import markets or merely affected foreign auctions)
- Minn‑Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012) (applying import exclusion where transactions involved direct shipments into U.S.)
- Abramski v. United States, 573 U.S. 169 (2014) (statutory interpretation principles; consider text, structure, purpose)
- Turicentro, S.A. v. American Airlines Inc., 303 F.3d 293 (3d Cir. 2002) (import commerce requires direct involvement in bringing goods/services into U.S.)
- Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430 (6th Cir. 2012) (import exclusion applied where agreement affected prices for transactions with U.S. buyers)
- Carpet Group Int’l v. Oriental Rug Importers Ass’n, 227 F.3d 62 (3d Cir. 2000) (import exclusion applied to foreign efforts that impacted U.S. importers)