DEN NORSKE STATS OLJESELSKAP AS, Plaintiff-Appellant, v. HEEREMAC VOF; Heerma Marine Contractors; Heerema Offshore Services U.S., Inc.; Heerema Offshore Construction Group, Inc.; Jan Meek; Pieter Heerema; McDermott International, Inc.; McDermott, Inc.; J. Ray McDermott, SA; J. Ray McDermott, Inc.; J. Ray McDermott Gulf Contractors, Inc.; McDermott Engineers & Constructors (USA), Inc.; McDermott Engineering Houston LLC; McDermott-ETPM, Inc.; Saipem SPA; Saipem International BV; Saipem UK Limited; Saipem (Portugal)—Comercio Maritimo, Sociedade Unipessoal, SA, Defendants-Appellees.
No. 99-20763.
United States Court of Appeals, Fifth Circuit.
Feb. 5, 2001.
241 F.3d 420
Jonathan D. Schiller, William A. Isaacson, Boies, Schiller & Flexner, Washington, DC, for Heeremac Vof, Heerma Marine Contractors, Heerema Offshore
William J. Linklater, Michael A. Pollard, Baker & McKenzie, Chicago, IL, Jacks C. Nickens, Clements, O‘Neill, Pierce, Nickens & Wilson, Houston, TX, for Heerma Marine Contractors, Heerema Offshore Services U.S. Inc., Heerema Offshore Construction Group Inc., Jan Meek and Pieter Heerema.
Charles Alan Gilman (argued), Patricia Farren, Cahill, Gordon & Reindel, New York City, Innes A. Mackillop, White, Mackillop & Boham, Houston, TX, for McDermott Intern., Inc., McDermott, Inc., J. Ray McDermott SA, J. Ray McDermott Inc., J. Ray McDermott Gulf Contractors Inc., McDermott Engineers & Constructors (USA) Inc., McDermott Engineering Houston LLC and McDermott-ETPM Inc.
Robin C. Gibbs, Kathy Dawn Patrick (argued), John Albert Basinger, Gibbs and Bruns, Houston, TX, for Saipem SPA, Saipem Intern. BV, Saipem UK Ltd. and Saipem (Portugal)—Comercio Maritimo, Sociedade Unipessoal, SA.
Before JOLLY, HIGGINBOTHAM and EMILIO M. GARZA, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
This appeal requires us to interpret the scope of the United States antitrust laws and their application to foreign conduct. The plaintiff is a Norwegian oil corporation that conducts business solely in the North Sea. It seeks redress under the United States antitrust laws against the defendants for an alleged anticompetitive conspiracy that supposedly inflated the plaintiff‘s operating costs in the North Sea. Supreme Court precedent makes clear as a general proposition that United States antitrust laws “do not regulate the competitive conditions of other nations’ economies,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 582, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). More specifically, today we are bound by the plain language of the Foreign Trade Antitrust Improvements Act (FTAIA). Thus, even though the plaintiff alleges that the antitrust conspiracy raised prices in the United States, it fails to assert jurisdiction under the antitrust laws because the plaintiff‘s injury did not arise from that domestic anticompetitive effect. Accordingly, we find that the district court properly dismissed the plaintiff‘s antitrust claims for lack of subject matter jurisdiction. It follows that we affirm the court‘s determination that the plaintiff lacked antitrust standing to bring these claims in United States federal court.
I
We begin with the basics. Sections 1 and 2 of the Sherman Act prohibit restraints of trade and monopolization. Section 1 reads:
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony....
II
The plaintiff, Den Norske Stats Oljeselskap As (“Statoil“), is a Norwegian oil company that owns and operates oil and gas drilling platforms exclusively in the North Sea. The defendants are providers of heavy-lift barge services in the Gulf of Mexico, the North Sea, and the Far East. Only six or seven heavy-lift barges exist in the world. These immense vessels have cranes capable of hoisting and transporting offshore oil platforms and decks weighing in excess of 4,000 tons. During the 1993–1997 time frame, which is at issue in this suit, the three defendants controlled these barges.2 Between 1993 and 1997, Statoil purchased heavy lift barge services from the HeereMac and Saipem defendants in the North Sea.
Statoil alleges that the defendants conspired to fix bids and allocate customers, territories, and projects between 1993 and 1997. Under the alleged arrangement, the defendants agreed that HeereMac and McDermott would have exclusive access to heavy-lift projects in the Gulf of Mexico, while Saipem would receive a higher allocation of North Sea projects in exchange for staying out of the Gulf. The defendants also allegedly agreed to submit embellished bids on heavy-lift projects. As a result of this conspiracy, Statoil contends that it paid inflated prices for heavy-lift barge services in the North Sea.3 Statoil further argues that the conspiracy compelled it to charge higher prices for the crude oil it exported to the United States.4 Finally, Statoil asserts that purchasers of heavy-lift services in the Gulf of Mexico were forced to pay inflated prices for those services because of the conspiracy.5
III
By way of background, it should be noted that in December 1997, the United States Department of Justice filed a criminal complaint against defendants HeereMac and Jan Meek, one of HeereMac‘s managing directors. The complaint alleged that the defendants conspired “to suppress and eliminate competition by rigging bids for the sale of heavy-lift derrick barge and related marine construction services in the United States and else
Following the guilty pleas, numerous companies across the globe filed suit in United States federal court seeking redress for injuries stemming from defendants’ conduct. The first of these suits was filed in the Southern District of Texas in June 1998 by Phillips Petroleum Company and three of its foreign-based subsidiaries.7
On January 22, 1999, the court dismissed Phillips‘s claims for injuries sustained by its foreign subsidiaries relating to projects in foreign waters but allowed those claims asserting injury from projects in United States waters to proceed. While the court acknowledged the worldwide nature of the alleged conspiracy in its order, it nonetheless held that subject matter jurisdiction did not exist for those claims pled by foreign-based subsidiaries for injuries allegedly sustained on foreign platforms.8 Specifically, the court determined that those claims did not fall within the ambit of the United States antitrust laws because the claims did not arise from a direct and substantial effect on United States commerce.9
Statoil filed this suit in the same court in December 1998. The court dismissed Statoil‘s complaint against the defendants on July 12, 1999.10 In its order, the court relied heavily upon its decision in the Phillips case and found no subject matter jurisdiction over the claims because “Statoil‘s damages arise from its projects in the Norwegian sector of the North Sea“; thus, the FTAIA‘s requirement that the effect on domestic commerce “gives rise” to the antitrust claim was not satisfied. See
IV
The issue presented to us is primarily one of statutory interpretation. Specifically, this appeal requires us to interpret the relevant provisions of the FTAIA to determine whether the defendants’ conduct and Statoil‘s injury in the North Sea presents a justiciable claim in the federal courts of the United States.
It is not helpful that the federal courts have generally disagreed as to the extraterritorial reach of the antitrust laws and have employed assorted tests to determine the scope of the Sherman Act. The histo
V
A
We review de novo a district court‘s ruling on a
We first outline Statoil‘s argument that United States antitrust jurisdiction encompasses the conduct and injury in its complaint.
B
Statoil argues that the FTAIA does not preclude the district court‘s jurisdiction over its antitrust claims. Specifically, Statoil argues that the FTAIA was enacted exclusively to ensure that the conduct pro
Addressing specifically the FTAIA‘s requirement that the domestic effect “gives rise” to its antitrust claim, Statoil primarily argues that, because the defendants operating in the Gulf of Mexico were able to maintain their monopolistic pricing only because of their overall market allocation scheme (which included agreements regarding operations in the North Sea), Statoil‘s injury in the North Sea was a “necessary prerequisite to” and was “the quid pro quo for” the injury suffered in the United States domestic market. Statoil alleges that the market for heavy-lift services in the world is a single, unified, global market; therefore, because the United States is a part of this worldwide market, the effect of the conspiracy, whether in the United States or in the North Sea, “gives rise” to any claim that is based upon this conspiracy.17
C
We must disagree with Statoil‘s arguments based on our reading of the antitrust statutes. Although we are controlled by the plain language of the statutes, we also find that the legislative history of the FTAIA and applicable case law supports our determination that the district court lacked jurisdiction over Statoil‘s claims.
We begin with an analysis of the relevant statutes and the plain language contained therein.
1
The Supreme Court has explained that “[a]bsent a clearly expressed legislative intention to the contrary, [statutory] language must ordinarily be regarded as conclusive.” Escondido Mut. Water Co. v. La Jolla Indians, 466 U.S. 765, 772, 104 S.Ct. 2105, 80 L.Ed.2d 753 (1984). We are thus
We begin by first noting that the Sherman Act itself applies only to conduct in “trade or commerce with foreign nations.”
As we have noted, the FTAIA states that the antitrust laws will not apply to non-import foreign conduct unless (1) such conduct has a direct, substantial, and reasonably foreseeable effect on United States domestic commerce, and (2) such effect gives rise to the antitrust claim.19 The conduct of these defendants is foreign conduct that falls within the general parameters of the FTAIA and, thus, Statoil must show that the two specific requirements of the statute are met to establish subject matter jurisdiction over its claims.20
We accept the contention that Statoil has sufficiently alleged that the defendants’ conduct—that is, the agreement among heavy-lift service providers to divide territory, rig bids, and fix prices—had a direct, substantial, and reasonably foreseeable effect on the United States market. Statoil alleges that the conspiracy not only forced purchasers of heavy-lift services in the Gulf of Mexico to pay inflated prices, but also that the agreement compelled Americans to pay supra-competitive prices for oil.21 These allegations are
However, Statoil fails to show that this effect on United States commerce in any way “gives rise” to its antitrust claim.22 Based on the language of Section 2 of the FTAIA, the effect on United States commerce—in this case, the higher prices paid by United States companies for heavy-lift services in the Gulf of Mexico—must give rise to the claim that Statoil asserts against the defendants. That is, Statoil‘s injury must stem from the effect of higher prices for heavy-lift services in the Gulf. We find no evidence that this requirement is met here. The higher prices American companies allegedly paid for services provided by the McDermott defendants in the Gulf of Mexico does not give rise to Statoil‘s claim that it paid inflated prices for HeereMac and Saipem‘s services in the North Sea. This is not to say that any antitrust injury suffered by customers or competitors of McDermott that arose from the anticompetitive effect in the Gulf of Mexico cannot be addressed.23 This means only that, while we recognize that there may be a connection and an interrelatedness between the high prices paid for services in the Gulf of Mexico and the high prices paid in the North Sea, the FTAIA requires more than a “close relationship” between the domestic injury and the plaintiff‘s claim; it demands that the domestic effect “gives rise” to the claim.24
Statoil asks that we interpret the requirement of Section 2 that the domestic “effect” give rise to a claim under the antitrust laws as merely requiring that the defendants’ domestic “conduct” (here, for example, agreements relating to the Gulf of Mexico) give rise to a claim. This interpretation is not true to the plain language of the FTAIA. Moreover, under such an expansive interpretation, any entities, anywhere, that were injured by any conduct that also had sufficient effect on United States commerce could flock to United States federal court for redress, even if those plaintiffs had no commercial relationship with any United States market and their injuries were unrelated to the
In sum, we find that the plain language of the FTAIA precludes subject matter jurisdiction over claims by foreign plaintiffs against defendants where the situs of the injury is overseas and that injury arises from effects in a non-domestic market.26 Although the plain language of the relevant statutes is clear and controlling, we nonetheless turn now to address briefly the legislative history of the FTAIA to illustrate how that history reinforces our interpretation of the extraterritorial reach of the antitrust laws.
2
Before analyzing the legislative history of the FTAIA, we reemphasize that “[l]egislative history is relegated to a secondary source behind the language of the statute in determining congressional intent; even in its secondary role legislative history must be used cautiously.” Boureslan v. Aramco, 857 F.2d 1014, 1018 (5th Cir.1988) (citation omitted). We are thus “not free to substitute legislative history for the language of the Act.” Id.
The FTAIA House Report states that the purpose of the law is “to more clearly establish when antitrust liability attaches to international business activities” and to ascertain “the precise legal standard to be employed in determining whether American antitrust law is to be applied to a particular transaction.” H.R.Rep. No. 97–686, at 5, 8.27 Moreover, the relevant House Report shows that Congress intended to exclude purely foreign transactions, like the contract for services in the North Sea between Statoil and the foreign defendants, from the reach of United States antitrust laws:
A transaction between two foreign firms, even if American-owned, should not, merely by virtue of the American ownership, come within the reach of our antitrust laws.... It is thus clear that wholly foreign transactions as well as export transactions are covered by the [FTAIA], but that import transactions are not.
Id. at 10.
Thus, the legislative history of the FTAIA, while not controlling, reinforces our conclusion that a foreign plaintiff in
We now turn to address briefly applicable case law and its effect on our interpretation of the FTAIA.
3
Because few courts have directly addressed the specific meaning of the FTAIA‘s Section 2 requirement that a domestic effect “gives rise” to the plaintiff‘s antitrust claim, very little case law exists to aid our inquiry. Our interpretation of the FTAIA‘s requirements, however, is entirely consistent with prior case law defining the jurisdictional reach of the antitrust laws. Furthermore, those decisions illustrate that our interpretation of Section 2 is not a novel reading of the statute.
To begin, we note that the only three federal courts that have addressed the narrow question before us interpreted Section 2 exactly as we have. See Kruman v. Christie‘s Int‘l PLC, et al., 129 F.Supp.2d 620 (S.D.N.Y.2001) (holding that the FTAIA permits jurisdiction “only where the conduct complained of had ‘direct, substantial and reasonably foreseeable’ effects in the United States and the effects giving rise to jurisdiction are the basis for the alleged injury.“); In re Microsoft Corp., 2001 U.S. Dist. LEXIS 305, at *37 (holding that, under the FTAIA, “foreign consumers who have not participated in any way in the U.S. market have no right to institute a Sherman Act claim.“); Sumitomo, 117 F.Supp.2d 875, 876 (holding that “it is plain from the language of this act and bolstered by the legislative history that a private plaintiff cannot sue under the antitrust laws of the United States for injuries incurred as a result of international transactions that have an anticompetitive effect on a United States market if the domestic anticompetitive effect is not the same one that gives rise to the plaintiff‘s injury.“).
We further note that we have found no case in which jurisdiction was found in a case like this—where a foreign plaintiff is injured in a foreign market with no injuries arising from the anticompetitive effect on a United States market.29 In those cases where the domestic effect on commerce did not give rise to the plaintiff‘s claim, courts have found subject matter jurisdiction lacking. See, e.g., S. Megga Telecomm. Ltd. v. Lucent Technologies, Inc., 1997 WL 86413 (D.Del. Feb.14, 1997) (anticompetitive domestic effect of higher prices for United States consumers did not “give rise” to plaintiff‘s claim for lost sales to defendant); The “In” Porters, S.A. v. Hanes Printables, Inc., 663 F.Supp. 494 (M.D.N.C.1987) (anticompetitive domestic effect (lost exports of United States exporters) did not “give rise” to plaintiff‘s
On the other hand, in every case where jurisdiction has been found, the substantial effect on United States commerce has “give[n] rise” to the plaintiff‘s injury and claim under the antitrust laws. See, e.g., Carpet Group Int‘l v. Oriental Rug Importers Ass‘n, 227 F.3d 62 (3rd Cir.2000) (anticompetitive effect on domestic rug market “gives rise” to plaintiff‘s injury); Caribbean, 148 F.3d 1080 (monopolization of United States market for advertising in the Caribbean “gives rise” to plaintiff‘s claim of being blocked from that market); Nippon Paper, 109 F.3d 1 (collusion amongst fax paper producers resulted in higher prices for fax paper in the United States, which “gives rise” to the United States’ claim); Hartford Fire, 509 U.S. 764, 113 S.Ct. 2891, 125 L.Ed.2d 612 (conspiracy‘s effect on the United States insurance market “gives rise” to the plaintiffs’ injury, the inability to obtain certain types of coverage in that market).
Finally, we note that none of the cases cited by Statoil in support of its interpretation of the FTAIA cast doubt upon our plain language interpretation of Section 2. Statoil cites Pfizer v. India, 434 U.S. 308, 98 S.Ct. 584, 54 L.Ed.2d 563 (1978), for the proposition that antitrust jurisdiction exists over foreign conduct like the commerce between Statoil and defendants in this case. Pfizer, however, was decided four years before enactment of the FTAIA, and the court‘s holding was limited to the question of whether a foreign government qualified as a “person” under the Sherman Act. Id. at 320, 98 S.Ct. 584.30 Statoil further maintains that Caribbean Broadcasting, 148 F.3d 1080, requires that jurisdiction be found over its claims. Initially, that case looks similar to today‘s case in that both the plaintiff and the defendant were foreign, and the defendant‘s international conspiracy had anticompetitive effects both inside and outside the United States. The critical difference, however, is that the effect on United States commerce in that case (that is, limiting to one radio station potential advertisers in the United States who wished to advertise in the Eastern Caribbean radio market) gave rise to the injury suffered by the plaintiff, a competing radio station—that is, exclusion of the plaintiff from the market for United States advertising dollars. Id. at 1082, 1086. As previously explained, that is simply not true with Statoil‘s claims.31 Similarly, Statoil‘s reliance on Nippon Paper, 109 F.3d 1, is misplaced because the global conspiracy in that case had the domestic effect of raising fax paper prices in the United States, which gave rise to the government‘s claim under the antitrust laws. Id. at 2.
Simply put, Statoil has cited no case law to support an interpretation of Section 2 of
VI
In sum, we find that the district court did not err when it dismissed Statoil‘s antitrust claims for lack of subject matter jurisdiction. Any reading of the FTAIA authorizing jurisdiction over Statoil‘s claims would open United States courts to global claims on a scale never intended by Congress. Without subject matter jurisdiction, United States federal courts are without power to entertain Statoil‘s claims.32 The judgment of the district court is therefore
AFFIRMED.
PATRICK E. HIGGINBOTHAM, Circuit Judge, dissenting:
I agree that this is not an easy case, but I have no hesitation in concluding that the Foreign Trade and Antitrust Improvements Act does not here divest the federal courts of jurisdiction and that the plaintiff has standing. With deference to my colleagues, I am persuaded by the plain text of section 6a, as well as its statutory context, legislative history, and purpose.
The claim is that defendants allocated the market for hundreds of millions of dollars of commerce—an allocation that placed United States markets at the mercy of monopoly charges in an industry vital to national security. The charged conspiracy was no foreign cabal whose secondary effects only lapped at United States shores. The impact of the conspiracy was direct and substantial. Indeed, the participation of American business in the market allocation scheme was critical to its success. The plaintiff here is a foreign company, true enough, but it was injured by the same acts of defendants that injured American plaintiffs whose right to seek recovery of their losses the district court recognized in this litigation.
With the Foreign Trade and Antitrust Improvements Act, Congress set out to insulate United States business from its antitrust laws for certain business conducted outside the country. Its central purpose was to assist American business in competing abroad. This pass from antitrust restrictions did not extend to all conduct outside the United States. It stopped short of insulating conduct having direct and substantial effects upon American commerce and causing antitrust injury to that commerce sufficient to support a claim for treble damages.
I am not persuaded that when illegal conduct produces these domestic effects, that Congress intended to close the door to a foreign company injured by the same illegal conduct. That was not the law before this effort to assist American business abroad, and Congress did not intend to change it or do so unwittingly. I would reverse and remand for further proceedings.
I
A
Interpretation of a statute must begin with the text of the statute itself. Section 6a states in its entirety:
Sections 1 to 7 of this title [the Sherman Act] shall not apply to conduct involving trade or commerce (other than import
trade or import commerce) with foreign nations unless— (1) such conduct has a direct, substantial, and reasonably foreseeable effect—
(A) on trade or commerce which is not trade or commerce with foreign nations, or on import trade or import commerce with foreign nations; or
(B) on export trade or export commerce with foreign nations, of a person engaged in such trade or commerce in the United States; and
(2) such effect gives rise to a claim under the provisions of sections 1 to 7 of this title, other than this section.
[Proviso:] If sections 1 to 7 of this title apply to such conduct only because of the operation of paragraph (1)(B), then sections 1 to 7 of this title shall apply to such conduct only for injury to export business in the United States.1
Section 6a(1) requires an effect on (A) domestic or import commerce of the United States or (B) the export commerce of a person in the United States.2 Section 6a(2) requires that this effect “give[ ] rise to a claim under the provisions of sections 1 to 7 of this title, the Sherman Act, other than this section.”3 The majority reads section 6a(2) to require that the effect “give[ ] rise to” the plaintiff‘s claim. It does not say that. It does say that the effect must “give[ ] rise to a claim.”4 In other words, the effect on United States commerce must be sufficient to support a claim, an injury of some person in a way cognizable under the Sherman Act.5
The literal text of the statute supports this conclusion. It reads, “gives rise to a claim.” The word “a” has a simple and universally understood meaning. It is the indefinite article. There are many terms of art about which one can debate whether Congress uses the term as courts do, but this word is not one of them. If the drafters of the FTAIA had wished to say “the claim” instead of “a claim,” they certainly would have.
The reference to “a” claim makes clear that the “effect” described by section 6a(1) must violate the Sherman Act—that is, harm competition. Section 6a(1) requires that the conspiracy have an effect on United States commerce; section 6a(2) requires that this effect either monopolize commerce or restrain trade in the United States, thereby giving rise to a Sherman Act claim. Section 6a(2) removes jurisdiction over conspiracies whose effects on United States commerce are beneficial or benign, even if they restrain competition in other parts of the world. That an injury that “gives rise to” an antitrust claim must be an injury caused by harm to competi
Thus, the literal text does not require that the effect on United States commerce give rise to the plaintiff‘s claim. At worst, the text is sufficiently ambiguous to allow for both the construction the majority offers and the construction I believe is correct. At the least, the majority cannot find support in a plain text argument.
Accepting that the text of the FTAIA compels neither the majority‘s reading or mine, we must enlist other aids in determining the meaning of the statute. In doing so, I conclude that the textual conclusion that “a” means “a” is supported by the statutory context of the FTAIA, which describes the function of the FTAIA and its animating purpose, and by the purposes of the antitrust laws in general; by the legislative history of the FTAIA; and by the sparse case law that interprets the FTAIA.
B
The FTAIA was enacted as Title IV of Public Law 97–290, entitled “Export Trading Company Act of 1982.”8 Title I contains the congressional findings. Every single congressional finding relates to the importance of export business and the need to encourage export activity by American business.9 The statute then states: “It is the purpose of this Act to increase United States exports of products and services by encouraging more efficient provision of export trade services to United States producers and suppliers, in particular by ... modifying the application of the antitrust laws to certain export trade.”10 It could not be clearer that the FTAIA serves to exempt exporting from antitrust scrutiny, not to limit the liability of participants in transnational conspiracies that affect United States commerce.11
The text of the FTAIA implements this purpose perfectly. The Sherman Act, prior to the enactment of the FTAIA, applied to conduct that affected domestic, import, and export commerce. Recall that section 6a(1) limiting the reach of the Sherman Act applies to conduct that affects (1) domestic commerce; (2) import commerce; or (3) export commerce, but only to the extent that American exporters are affected. One class of conduct is excluded: conduct that affects only foreign purchasers of American exports. This is the function of the FTAIA: to protect American exporters who monopolize or conspire to restrain export trade that does not harm United States commerce.
The purpose of the FTAIA offers no support for the majority‘s reading of the statute. It is undisputed that if proved, the conspiracy in this case would have direct, substantial, and reasonably foreseeable effects upon United States commerce. No American exporters are implicated by this suit. American exporting business can only be harmed by the alleged conspiracy in this case.
Indeed, interpreting the FTAIA as the majority wishes will impair the competitiveness of American exporters. Under the majority‘s view, an American cartel that fixes prices worldwide will be subject to Clayton Act suits by plaintiffs from around the world,12 but a foreign cartel that fixes prices worldwide will be subject to suit under the Clayton Act only from plaintiffs injured in American commerce. This interpretation of the FTAIA transforms a safe harbor for American exporters into a boon for foreign cartels that restrain commerce in the United States.
With respect to my colleagues, I fear that their reading of the FTAIA will hinder its purposes and reduce the effectiveness of the antitrust laws. Nothing in the text of the FTAIA, or the Export Trading Company Act of 1982 as a whole, or its legislative history, casts doubt on the importance of deterring restraints of trade that affect United States commerce. The Supreme Court has repeatedly recognized that the accent of the Sherman and the Clayton Acts is deterrence, requiring violators to pay full, treble damages, even if some plaintiffs gain a windfall or are foreigners. For example, in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), the Supreme Court noted the importance of “vigorous private enforcement of the antitrust laws” and “deterring violators” and recognized that “from the deterrence standpoint, it is irrelevant to whom damages are paid, so long as some one redresses the violation.”14
The Supreme Court in Pfizer, Inc. v. Government of India, 434 U.S. 308, 98 S.Ct. 584, 54 L.Ed.2d 563 (1978) addressed a situation somewhat analogous to this case. The government of India sued several Ameri
The logic underlying this conclusion is straightforward. Conspirators facing antitrust liability only to plaintiffs injured by their conspiracy‘s effects on the United States may not be deterred from restraining trade in the United States. A worldwide price-fixing scheme could sustain monopoly prices in the United States even in the face of such liability if it could cross-subsidize its American operations with profits from abroad. Unless persons injured by the conspiracy‘s effects on foreign commerce could also bring antitrust suits against the conspiracy, the conspiracy could remain profitable and undeterred.
It is no rejoinder that conspirators would simply choose to exclude the United States from any price-fixing conspiracy as long as American plaintiffs could sue. In at least some cases, including the United States in a price-fixing conspiracy is necessary to generate monopoly profits. Otherwise, arbitrage would rapidly equalize unequal prices around the globe as speculators resold goods purchased in the United States to buyers in high-price regions.18 Thus, a cartel may find it impossible to fix prices anywhere without a worldwide conspiracy. The Sherman Act can only deter these violations if it protects all parties injured by such a conspiracy.
Justice Stewart succinctly made this argument in Pfizer:
The conspiracy ... operated domestically as well as internationally. If foreign plaintiffs were not permitted to seek a remedy for their antitrust injuries, persons doing business both in this country and abroad might be tempted to enter into anticompetitive conspiracies affecting American consumers in the expectation that the illegal profits they could safely extort abroad would offset any liability to plaintiffs at home. If, on the other hand, potential antitrust violators must take into account the full costs of their conduct, American consumers are benefited by the maximum deterrent effect of treble damages upon all potential violators.19
C
The legislative history also supports this reading of the statute and undermines the majority‘s interpretation of section 6a(2).
does not exclude all persons injured abroad from recovering under the antitrust laws of the United States. A course of conduct in the United States—e.g., price fixing not limited to the export market—would affect all purchasers of the target domestic products or services, whether the purchaser is foreign or domestic. The conduct has the requisite effects in the United States, even if some purchasers take title abroad or suffer economic injury abroad.20
This statement explicitly refers to plaintiffs who “suffer economic injury abroad.” The majority‘s interpretation of the statute is contrary to this statement in the legislative history. The “effect” on United States commerce is the injury suffered by purchasers in the United States; this effect does not give rise to the injury suffered by the foreign plaintiffs. Yet the legislative history contemplates such plaintiffs recovering under the Sherman Act. The scenario described in this statement is virtually identical to the instant case: a conspiracy sells to buyers in the United States and abroad, and each of the buyers is injured. All are injured by the same conspiracy, and it is a conspiracy that has been injurious to competition in the United States.
The majority, however, chooses to rely on the following statement in the same House Report:
A transaction between two foreign firms, even if American-owned, should not, merely by virtue of the American ownership, come within the reach of our anti-trust laws.... It is thus clear that wholly foreign transactions as well as export transactions are covered by the [FTAIA], but that import transactions are not.21
That American ownership alone should not create jurisdiction over a wholly foreign conspiracy is not controverted, controversial, or relevant to this case. What is relevant is that the language omitted from the quotation above states that if a conspiracy between two foreign firms, regardless of American ownership, does have an effect on domestic commerce, there is jurisdiction.22
D
I recognize that there is little precedent to guide our analysis of this question. Of the case law that does exist, there are no appellate court cases supporting the majority‘s holding. To the contrary, the majority must reconcile or distinguish the only other circuit court decisions interpreting the FTAIA, because all of them find jurisdiction present.
The majority opinion struggles, and I believe fails, to reconcile Caribbean Broadcasting System, Ltd. v. Cable & Wireless PLC,23 which involved a foreign plaintiff alleging monopolization in radio advertising in the Caribbean by a competing radio station. The defendant was also a foreign entity. Consistent with the reasoning of this dissent, the D.C. Circuit held that the FTAIA did not preclude jurisdiction, because the plaintiff showed that the foreign defendants’ conduct had the effect of harming United States purchasers of advertising. It stated: “the alleged injury is to advertisers in the United States.”24
E
Finally, the majority‘s attempt to enlist the aid of the Commerce Clause and the canon of construction that creates a presumption against extraterritoriality is mistaken.
The majority suggests that the interpretation of the FTAIA that I espouse is beyond the power of Congress to regulate commerce.25 The Supreme Court itself has recognized—in the context of the Sherman Act—that Congress has intended to regulate, and constitutionally has regulated, foreign conduct that affects United States commerce.26 And it has been decades since any court has taken so cramped a view of the Commerce Clause in any context.27
The majority is correct to note that the courts’ historical willingness to apply the Sherman Act extraterritorially is not dispositive of this appeal, since the FTAIA, and not the courts’ earlier interpretations of the Sherman Act, is controlling here.28 But precisely because the FTAIA applies here, the majority‘s reliance on the canon against extraterritorial application of statutes is misplaced. This canon operates when Congress has not clearly spoken on the issue of extraterritoriality.29 The FTAIA, however, explicitly addresses nothing other than extraterritoriality. We must be careful not to use such a canon when Congress is speaking directly to the relevant issue. Make no mistake: such canons reflect substantive presumptions about the content of laws. If courts apply substantive canons of construction against statutes that do speak to an issue, then it is the courts, not Congress, who are making the policy choices that form the content of legislation.30
II
Because I disagree with the majority‘s interpretation of the FTAIA, I would reach the standing inquiry. It is straightforward; this court has restated the test for standing under the Clayton Act as “1) injury-in-fact, an injury to the plaintiff proximately caused by the defendants’ con
Statoil has standing. First, it has suffered injury-in-fact. It paid inflated prices directly to the defendants.
Second, Statoil has suffered antitrust injury. Antitrust injury requires that the injury to the plaintiff not merely show “injury causally linked to an illegal presence in the market” but injury “attributable to an anti-competitive aspect of the practice under scrutiny.”32 This element of standing excludes plaintiffs, primarily competitors, harmed by increased, rather than decreased, competition.33 Statoil‘s injury was the direct result of the alleged price-fixing conspiracy and consequent restraint of trade.34
Third and finally, Statoil is a proper plaintiff. In determining whether a party is a proper plaintiff, it should examine “such factors as (1) whether the plaintiff‘s injuries or their causal link to the defendant are speculative, (2) whether other parties have been more directly harmed, and (3) whether allowing this plaintiff to sue would risk multiple lawsuits, duplicative recoveries, or complex damage apportionment.”35
First, neither Statoil‘s injuries, nor their connection to the defendants, is speculative. The injuries arise from the defendants charging Statoil monopoly prices. Second, other parties have not been harmed more directly than Statoil. Statoil was a purchaser in the market for heavy-lift barge services, the market in which the defendants fixed prices. Third, allowing Statoil to sue would not risk duplicative recoveries or the like. There is no suggestion that any unnamed party can seek to recover for the same damages Statoil suffered.
III
The antitrust laws have always given federal courts jurisdiction over conspiracies that adversely affect competition in the United States. The FTAIA limits that jurisdiction; but it does so by exempting American export conspiracies, not foreign conspiracies that injure American competition.
The majority opinion expresses concern that foreign litigants will flock to the United States for redress of their injuries in distant lands. The majority opinion, and the district court opinions it cites, seem to fear that the interpretation of the FTAIA that Statoil advocates makes the Sherman Act an antitrust regulation of foreign economies throughout the entire world, a paternalistic lawmaking enterprise that ignores the adequacy of foreign tribunals. But Congress has enacted no such thing. Congress enacted the FTAIA to serve the United States’ narrow interest in vigorous domestic competition.
The text of the FTAIA may be inelegant, but it serves the selfish national in
In sum, I believe the FTAIA does not divest the federal courts of jurisdiction over suits by plaintiffs who suffer antitrust injuries from a conspiracy that also harms competition in United States commerce. Whether the harm felt in the United States is the source of the injury to the plaintiff is irrelevant; it is the effects on the United States that creates jurisdiction. Under the facts of this case, I would conclude that the district court had jurisdiction over the suit and that Statoil had standing to sue the defendants under the Clayton Act. I respectfully dissent.