Minn-Chem, Inc. v. Agrium Inc.
2011 U.S. App. LEXIS 19433
7th Cir.2011Background
- This is a multi-district antitrust class action alleging a global cartel among potash producers to fix prices and restrict output, affecting U.S. and foreign markets.
- Defendants include Agrium, PCS, Mosaic (Canadian mines) with Canpotex; and Silvinit, IPC, Uralkali, and Belaruskali (Russian/Belarusian operations) with Belaruskali later dismissed via Foreign Sovereign Immunities Act.
- Plaintiffs allege offshore conspiracies in Brazil, China, and India that allegedly set price benchmarks influencing U.S. potash prices, from 2003 to present.
- The district court denied the motion to dismiss under Rule 12(b)(1)/(b)(6) but certified for interlocutory review; the Seventh Circuit granted review and now reverses.
- The key issue is whether the FTAIA allows the Sherman Act claim to proceed given that conduct occurred abroad and only indirectly affected U.S. commerce.
- The court ultimately holds that, under the FTAIA, the complaint fails to plead a direct, substantial, and reasonably foreseeable effect on U.S. commerce and must be dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FTAIA bars the Sherman Act claim | Plaintiffs argue FTAIA applies only to import or direct effects, not general offshore conspiracy. | Defendants contend FTAIA blocks extraterritorial antitrust claims absent import commerce or direct effects on U.S. commerce. | FTAIA bars the suit; dismissal required. |
| Whether the complaint plausibly pleads direct-effects on U.S. commerce | Plaintiffs claim foreign cartel prices in Brazil, China, and India directly affect U.S. prices via benchmarks. | Defendants argue the complaint lacks specific facts tying overseas conduct to U.S. potash prices; ripple effects are insufficient. | Complaint insufficient; direct-effects pleading fails. |
Key Cases Cited
- United Phosphorus, Ltd. v. Angus Chemical Co., 322 F.3d 942 (7th Cir. 2003) (FTAIA jurisdictional vs. merits question; guidance on offshore conduct)
- F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (S. Ct. 2004) (FTAIA aims to limit extraterritorial reach; exceptions for import or direct effects)
- Arbaugh v. Y&H Corp., 546 U.S. 500 (S. Ct. 2006) (clear-statement rule; thresholds as jurisdictional vs. substantive)
- Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869 (S. Ct. 2010) (extraterritorial reach; merits-question framing; -remand not required)
- Turicentro, S.A. v. American Airlines, Inc., 303 F.3d 293 (3d Cir. 2002) (distinguishes import-commerce vs. direct-effects in FTAIA analysis)