Lead Opinion
delivered the opinion of the Court.
Thе Foreign Trade Antitrust Improvements Act of 1982 (FTAIA) excludes from the Sherman Act’s reach much anti-competitive conduct that causes only foreign injury. It does so by setting forth a general rule stating that the Sherman Act “shall not apply to conduct involving trade or commerce ... with foreign nations'.” 96 Stat. 1246,15 U. S. C. § 6a. It then creates exceptions to the general rule, applicable where (roughly speaking) that conduct significantly harms imports, domestic commerce, or American exporters.
We here focus upon anticompetitive price-fixing activity that is in significant part foreign, that causes some domestic antitrust injury, and that independently сauses separate foreign injury. We ask two questions about the price-fixing conduct and the foreign injury that it causes. First, does that conduct fall within the FTAIA’s general rule excluding the Sherman Act’s application? That is to say, does the price-fixing activity constitute “conduct involving trade or commerce . . . with foreign nations”? We conclude that it does.
To clarify: The issue before us concerns (1) significant foreign anticompetitive conduct with (2) an adverse domestic effect and (3) an independent foreign effect giving rise to the claim. In more concrete terms, this case involves vitamin sellers around the world that agreed to fix prices, leading to higher vitamin prices in the United States and independently leading to higher vitamin prices in other countries such as Ecuador. We conclude that, in this scenario, a purchaser in the United States could bring a Sherman Act claim under the FTAIA based on domestic injury, but a purchaser in Ecuador could not bring a Sherman Act claim based on foreign harm.
I
The plaintiffs in this case originally filed a class-action suit on behalf of foreign and domestic purchasers of vitamins under, inter alia, §1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. § 1, and §§4 and 16 of the Clayton Act, 38 Stat. 731, 737, as amended, 15 U. S. C. §§ 15, 26. Their complaint alleged that petitioners, foreign and domestic vitamin manufacturers and distributors, had engaged in a price-fixing conspiracy, raising the price of vitamin products to customers in the United States and to customers in foreign countries.
As relevant here, petitioners moved to dismiss the suit as to the foreign purchasers (the respondents here), five foreign vitamin distributors located in Ukraine, Australia, Ecuador, and Panama, each of which bought vitamins from peti
A divided panel of the Court of Appeals reversed.
The court assumed that the foreign effect, i. e., higher prices in Ukraine, Panama, Australia, and Ecuador, was independent of the domestic effect, i. e., higher domestic prices. Ibid. But it concluded that, in light of the FTAIA’s text, legislative history, and the policy goal of deterring harmful price-fixing activity, this lack of connection does not matter. Ibid. The District of Columbia Circuit denied rehearing en bane by a 4-to-3 vote. App. to Pet. for Cert. 44a.
We granted certiorari to resolve a split among the Courts of Apрeals about the exception’s application. Compare Den
II
The FTAIA seeks to make clear to American exporters (and to firms doing business abroad) that the Sherman Act does not prevent them from entering into business arrangements (say, joint-selling arrangements), however anticompet-itive, as long as those arrangements adversely affect only foreign markets. See H. R. Rep. No. 97-686, pp. 1-3, 9-10 (1982) (hereinafter House Report). It does so by removing from the Sherman Act’s reаch, (1) export activities and (2) other commercial activities taking place abroad, unless those activities adversely affect domestic commerce, imports to the United States, or exporting activities of one engaged in such activities within the United States.
The FTAIA says:
“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 [i. e., domestic tradе or commerce], 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 [i. e., on an American export competitor]; and
“(2) such effect gives rise to a claim under the provisions of sections 1 to 7 of this title, other than this section.
“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.” 15U.S.C. §6a.
This technical language initially lays down a general rule placing all (nonimport) activity involving foreign commerce outside the Sherman Act’s reach. It then brings such conduct back within the Sherman Act’s reach provided that the conduct both (1) sufficiently affects American commerce, i e., it has a “direct, substantial, and reasonably foreseeable effect” on American domestic, import, or (certain) export commerce, and (2) has an effect of a kind that antitrust law considers harmful, i. e., the “effect” must “giv[e] rise to a [Sherman Act] claim.” §§6a(1), (2).
We ask here how this language applies to price-fixing activity that is in significant part foreign, that has the requisite domestic effect, and that also has independent foreign effects giving rise to the plaintiff’s claim.
HI
Respondents make a threshold argument. They sаy that the transactions here at issue fall outside the FTAIA because the FTAIA’s genéral exclusionary rule applies only to conduct involving exports. The rule says that the Sherman Act “shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations.” §6a (emphasis added). The word “with” means between the United States and foreign nations. And, they contend, commerce between the United States and foreign nations that is not import commerce must consist of export commerce — a kind of commerce irrelevant to the case at hand.
The House Report says in relevant part:
“The Subcommittee’s ‘export’ commerce limitation appeared to make the amendments inapplicable to transactions that were neither import nor export, i. e., transactions within, between, or among other nations. . . . Such foreign transactions should, for the purposes of this legislation, be treated in the same manner аs export transactions — that is, there should be no American antitrust jurisdiction absent a direct, substantial and reasonably foreseeable effect on domestic commerce or a domestic competitor. The Committee amendment therefore deletes references to ‘export’ trade, and substitutes phrases such as ‘other than import’ trade. It is thus clear that wholly foreign transactions as well as export transactions are covered, by the amendment, but that import transactions are not.” House Report, at 9-10 (emphases added).
For those who find legislative history useful, the House Report’s account should end thе matter. Others, by considering carefully the amendment itself and the lack of any other plausible purpose, may reach the same conclusion, namely, that the FTAIA’s general rule applies where the an-ticompetitive conduct at issue is foreign.
IV
We turn now to the basic question presented, that of the exception’s application. Because the underlying antitrust
First, this Court ordinarily construes ambiguous statutes to avoid unreasonable interference with the sovereign authority of other nations. See, e. g., McCulloch v. Sociedad Nacional de Marineros de Honduras,
This rule of statutory construction cautions courts to assume that legislators take account of the legitimate sovereign interests of other natiоns when they write American laws. It thereby helps the potentially conflicting laws of different nations work together in harmony — a harmony partic
No one denies that America’s antitrust laws, when applied to foreign conduct, can interfere with a foreign nation’s ability independently to regulate its own commercial affairs. But our courts have long held that application of our antitrust laws to foreign anticompetitive conduct is nonetheless reasonable, and hence consistent with principles of prescriptive comity, insofar as they reflect a legislative effort to redress domestic antitrust injury that foreign anticompetitive conduct has caused. See United States v. Aluminum Co. of America,
But why is it reasonable to apply those laws to foreign conduct insofar as that conduct causes independent foreign harm and that foreign harm alone gives rise to the plaintiff’s claim? Like the former case, application of those laws creates a serious risk of interference with a foreign nation’s ability independently to regulate its own commercial affairs. But, unlike the former case, the justification for that interference seems insubstantial. See Restatement §403(2) (determining reasonableness on basis of such factors as connections with regulating nation, harm to that nation’s interests, extent to which other nations regulate, and the potential for conflict). Why should American law supplant, for example, Canada’s or Great Britain’s or Japan’s own determination about how best to protect Canadian or British or Japanese customers from anticompetitive conduct engaged in significant part by Canadian or British or Japanese or other foreign companies?
We recognize that principles of comity provide Congress greater leeway when it seeks to control through legislation the actions of American companies, see Restatement § 402; and some of the anticompetitive price-fixing conduct alleged here took place in America. But the higher foreign prices of which the foreign plaintiffs here complain are not the con
We thus repeat the basic question: Why is it reasonable to apply this law to conduct that is significantly foreign insofar as that conduct causes independent foreign harm and that foreign harm alone gives rise to the plaintiffs claim? We can find no good answer to the question.
The Areeda and Hovenkamp treatise notes that under the Court of Appeals’ interpretation of the statute
“a Malaysian customer could . . . maintain an action under United States law in a United States court against its own Malaysian supplier, another cartel member, simply by noting that unnamed third parties injured [in the United States] by the American [cartel member’s] conduct would also have a cause of action. Effectively, the United States courts would provide worldwide subject matter jurisdiction to any foreign suitor wishing to sue its own local supplier, but unhappy with its own sovereign’s provisions for private antitrust enforcement, provided that a different plaintiff had a cause of action against a different firm for injuries that were within U. S. [other-than-import] commerce. It does not seem excessively rigid to infer that Congress would not haveintended that result.” P. Areeda & H. Hovenkamp, Antitrust Law ¶ 273, pp. 51-52 (Supp. 2003).
We agree with the comment. We can find no convincing justification for the extension of the Sherman Act’s scope that it describes.
Respondents reply that many nations have adopted antitrust laws similar to our own, to the point where the practical likelihood of interference with the relevant interests of other nations is minimal. Leaving price fixing to the side, however, this Court has found to the contrary. See, e. g., Hartford Fire,
Regardless, even where nations agree about primary conduct, say, price fixing, they disagree dramatically about appropriate remedies. The application, for example, of American private treble-damages remedies to anticompetitive conduct taking place abroad has generated considerable controversy. See, e. g., 2 ABA Section of Antitrust Law, Antitrust Law Developments 1208-1209 (5th ed. 2002). And several foreign nations have filed briefs here arguing that to apply our remedies would unjustifiably permit their citizеns to bypass their own less generous remedial schemes, thereby upsetting a balance of competing considerations that their own domestic antitrust laws embody. E. g., Brief for Government of Federal Republic of Germany et al. as Amici Curiae 2 (setting forth German interest “in seeing that German companies are not subject to the extraterritorial reach of the United States’ antitrust laws by private foreign plaintiffs— whose injuries were sustained in transactions entirely outside United States commerce — seeking treble damages in private lawsuits against German companies”); Brief for Gov
These briefs add that a decision permitting independently injured foreign plaintiffs to pursue private treble-damages remedies would undermine foreign nations’ own antitrust enforcement policies by diminishing foreign firms’ incentive to cooperate with antitrust authorities in return for prosecuto-rial amnesty. Brief for Government of Federal Republic of Germany et al. as Amici Curiae 28-30; Brief for Government of Canada as Amicus Curiae 11-14. See also Brief for United States as Amicus Curiae 19-21 (arguing the same in respect to American antitrust enforcement).
Respondents alternatively argue that comity does not demand an interpretation of the FTAIA that would exclude independent foreign injury cases across the board. Rather, courts can take (and sometimes have taken) account of comity considerations case by case, abstaining where comity considerations so dictate. Cf., e.g., Hartford Fire, supra, at 797, n. 24; United States v. Nippon Paper Industries Co.,
In our view, however, this approach is too complex to prove workable. The Sherman Act covers many different kinds of anticompetitive agreements. Courts would have to examine how foreign law, compared with American law, treats not only price fixing but also, say, information-sharing agreements, patent-licеnsing price conditions, territorial product resale limitations, and various forms of joint venture, in respect to both primary conduct and remedy. The legally and economically technical nature of that enterprise means lengthier proceedings, appeals, and more proceedings — to the point where procedural costs and delays could
We conclude that principles of prescriptive comity counsel against the Court of Appeals’ interpretation of the FTAIA. Where foreign anticompetitive conduct plays a significant role and where foreign injury is independent of domestic еffects, Congress might have hoped that America’s antitrust laws, so fundamental a component of our own economic system, would commend themselves to other nations as well. But, if America’s antitrust policies could not win their own way in the international marketplace for such ideas, Congress, we must assume, would not have tried to impose them, in an act of legal imperialism, through legislative fiat.
Second, the FTAIA’s language and history suggest that Congress designed the FTAIA to clarify, perhaps to limit, but not to expand in any significant way, the Sherman Act’s scope as applied to foreign commerce. See House Report, at 2-3. And we have found no significant indication that аt the time Congress wrote this statute courts would have thought the Sherman Act applicable in these circumstances.
The Solicitor General and petitioners tell us that they have found no case in which any court applied the Sherman Act to redress foreign injury in such circumstances. Tr. of Oral Arg. 21; Brief for United States as Amicus Curiae 13; Brief
Nevertheless, rеspondents now have called to our attention six cases, three decided by this Court and three decided by lower courts. In the first three cases the defendants included both American companies and foreign companies jointly engaged in anticompetitive behavior having both foreign and domestic effects. See Timken Roller Bearing Co. v. United States,
In all three cases, however, the plaintiff was the Government of the United States. A Government plaintiff, unlike a private plaintiff, must seek to obtain the relief necessary to protect the public from further anticompetitive conduct and to redress anticompetitive harm. And a Government plaintiff has legal authority broad enough to allow it to carry out this mission. 15 U. S. C. § 25; see also, e. g., United States v. E. I. du Pont de Nemours & Co.,
Neither did the Court focus explicitly in its opinions on a claim that the remedies sought to cure only independently caused foreign harm. Thus the three cases tell us even less abоut whether this Court then thought that foreign private plaintiffs could have obtained foreign relief based solely upon such independently caused foreign injury.
Respondents also refer to three lower court cases brought by private plaintiffs. In the first, Industria Siciliana Asfalti, Bitumi, S. p. A. v. Exxon Research & Engineering Co., No. 75 Civ. 5828-CSH,
In the second case, Dominicus Americana' Bohio v. Gulf & Western Industries, Inc.,
The third case, Hunt v. Mobil Oil Corp.,
The upshot is that no pre-1982 case provides significant authority for application of the Sherman Act in the circumstances we here assume. Indeed, a leading contemporaneous lower court case contains language suggesting the contrary. See Timberlane Lumber Co. v. Bank of America, N. T. & S. A.,
Taken together, these two sets of considerations, the one derived from comity and the other reflecting history, convince us that Congress would not have intended the FTAIA’s exception to bring independently caused foreign injury within the Sherman Act’s reach.
V
Respondents point to several considerations that point the other way. For one thing, the FTAIA’s language speaks in terms of the Sherman Act’s applicability to certain kinds of conduct. The FTAIA says that the Sherman Act applies to foreign “conduct” with a certain kind of harmful domestic effect. Why isn’t that the end of the matter? How can the Sherman Act both apply to the conduct when one person sues but not apply to the same conduct when another person sues? The question of who can or cannot sue is a matter for other statutes (namely, the Clayton Act) to determine.
Moreover, the exception says that it applies if the conduct’s domestic effect gives rise to “a claim,” not to “the plaintiff’s claim” or “the claim at issue.” 15 U. S. C. §6a(2) (emphases added). The alleged conduct here did have domestic effects, and those effects were harmful enough to give rise to “a” claim. Respondents concede that this claim is not their own claim; it is someone else’s claim. But, linguis
Despite their linguistic logic, these arguments are not convincing. Linguistically speaking; a statute can apply and not apply to the same conduct, depending upon other circumstances; and those other circumstances may include the nature of the lawsuit (or of the related underlying harm). It also makes linguistic sense to read the words “a claim” as if they refer to the “plaintiff’s claim” or “the claim at issue.”
At most, respondents’ linguistic аrguments might show that respondents’ reading is the more natural reading of the statutory language. But those arguments do not show that we must accept that reading. And that is the critical point. The considerations previously mentioned — those of comity and history — make clear that the respondents’ reading is not consistent with the FTAIA’s basic intent. If the statute’s language reasonably permits an interpretation consistent with that intent, we should adopt it. And, for the reasons stated, we believe that the statute’s language permits the reading that we give it.
Finally, respondents point to policy considerations, namely, that application of the Sherman Act in prеsent circumstances will (through increased deterrence) help protect Americans against foreign-caused anticompetitive injury. Petitioners and supporting enforcement-agency amici, however, have made important experience-backed arguments (based upon amnesty-seeking incentives) to the contrary. We cannot say whether, on balance, respondents’ side of this empirically based argument or the enforcement agencies’ side is correct. But we can say that the answer to the dispute is neither
For these reasons, we conclude that petitioners’ reading of the statute’s language is correct. That reading furthers the statute’s basic purposes, it properly reflects considerations of comity, and it is consistent with Sherman Act history.
VI
We have assumed that the anticompetitive conduct here independently caused foreign injury; that is, the conduct’s domestic effects did not help to bring about that foreign injury. Respondents argue, in the alternative, that the foreign injury was not independent. Rather, they say, the anti-competitive conduct’s domestic effects were linked to that foreign harm. Respondents contend that, because vitamins are fungible and readily transportable, without an adverse domestic effect (i. e., higher prices in the United States), the sellers could not have maintained their international price-fixing arrangement and respondents would not have suffered their foreign injury. They add that this “but for” condition is sufficient to bring the price-fixing conduct within the scope of the FTAIA’s exception.
The Court of Appeals, however, did not address this argument,
For these reasons, the judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Concurrence Opinion
with whom Justice Thomas joins, concurring in the judgment.
I concur in the judgment of the Court because the language of the statute is readily susceptible of the interpretation the Court provides and because only that interpretation is consistent with the principle that statutes should be read in accord with the customary deference to the application of foreign countries’ laws within their own territories.