Minn-Chem, Incorpora v. Agrium Inco
2012 U.S. App. LEXIS 13131
| 7th Cir. | 2012Background
- Potash is a homogeneous commodity used primarily in fertilizers; global potash production is dominated by a small set of firms, including PCS, Mosaic, Agrium, Uralkali, Belaruskali, Silvinit, and IPC, which together controlled about 71% of world supply in 2008.
- The Complaint alleges a worldwide cartel restrained output to inflate potash prices and used benchmark pricing across markets, with U.S. purchasers experiencing large price increases from 2003 to 2008.
- The district court denied dismissal but allowed interlocutory appeal; the Seventh Circuit initially questioned FTAIA interpretation and reverted to en banc review.
- The court’s central task is interpreting the Foreign Trade Antitrust Improvements Act (FTAIA) and applying it to antitrust claims involving import commerce and potential extraterritorial effects.
- The court ultimately holds that the FTAIA sets forth an element of a Sherman Act claim (not a jurisdictional limit) and that the complaint plausibly states a claim under the Sherman Act here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the FTAIA impose a jurisdictional limit or an element of the claim? | FTAIA limits jurisdiction over foreign conduct. | FTAIA restricts Sherman Act reach by foreign conduct. | FTAIA is an element, not jurisdiction; case may proceed. |
| Do the Complaint’s allegations meet the FTAIA’s import/export/foreign commerce requirements? | Complaint alleges import transactions and foreign conduct affecting U.S. commerce. | Some conduct occurred outside import trade and may be outside Sherman Act reach. | Complaint plausibly alleges import and foreign-conduct effects on U.S. commerce. |
| What does “direct” effect mean under the FTAIA in this context? | Effects on U.S. prices from foreign supply restrictions are direct. | “Direct” should require immediate or proximate causation. | Courts should follow a proximate-cause interpretation (not purely immediate) consistent with statute. |
| Are the alleged effects on U.S. potash prices substantial and foreseeable? | Cartel controlled ~71% of supply; U.S. imports and prices rose dramatically. | Effects may be too attenuated or speculative. | Allegations show substantial and foreseeable effects on U.S. market. |
Key Cases Cited
- Empagran S.A. v. F. Hoffman-La Roche Ltd., 542 U.S. 155 (U.S. 2004) (FTAIA; foreign conduct harming U.S. commerce may be actionable; foreign injury in foreign markets not actionable)
- Hartford Fire Insurance Co. v. California, 509 U.S. 764 (U.S. 1993) (foreign conduct with effects on U.S. commerce; import/export distinctions under Sherman Act)
- United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942 (7th Cir. 2003) (en banc retained jurisdictional view on FTAIA before reconsideration)
- United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945) (early test for Sherman Act coverage of imports based on effects on U.S. commerce)
- Empagran S.A. v. F. Hoffman-La Roche Ltd., 542 U.S. 155 (U.S. 2004) (reiterates scope of FTAIA and limitations on applying U.S. antitrust to foreign injury)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (standard for pleading plausibility to survive Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard for plausible claims; supports Rule 12(b)(6) analysis)