Antitrust
| Pages | 52-53 |
52 Volume 17, July–September 2011 international law update
© 2012 Transnational Law Associates, LLC. All rights reserved. ISSN 1089-5450, ISSN 1943-1287 (on-line) | www.internationallawupdate.com
ANTITRUST
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Two groups of plaintis led class action
suits against a number of defendants. Group one
includes individuals who purchased potash in the
United States directly from the defendants. e
second group includes individuals who purchased
potash products indirectly from the defendants.
e Defendants are seven companies whose
principal mining operations are located in Canada,
Russia, and Belarus. ey include Agrium Inc.,
Potash Corporation of Saskatchewan Inc. (“PCS”),
e Mosaic Company, JSC Uralkali, JSC Silvinit,
JSC Belarusian Potash Company (“BPC”), and
JSC International Potash Company (“IPC”).
Agrium, PCS, and Mosaic operate potash mines
in the Canadian province of Saskatchewan. ese
three companies own Canpotex Ltd., a Canadian
corporation that is named as a coconspirator but
not as a defendant. Canpotex is a joint export
marketing and distribution company tasked with
coordinating the oshore sales of the potash supply
of each of its three stakeholders.
e complaint alleges that the Defendants
accounted for about 71% of the world’s potash
supply. From 2003 to 2008, potash prices in the
United States increased by 600% for no apparent
reason. e Plaintis allege that the prices increased
because the Defendants jointly agreed to restrict
output and increase prices of potash. e potash
industry is an oligopoly made up of high market
concentration. e Plaintis also allege that the
industry is marked by a high degree of cooperation,
which provides the defendants with opportunities
to conspire and share information, particularly
for the three Defendants involved with Canpotex.
All of the anticompetitive activity alleged in the
complaint is said to have occurred outside of the
United States. e Defendants moved to dismiss
the Sherman Act claim for lack of subject matter
jurisdiction under the Foreign Trade Antitrust
Improvements Act (“FTAIA”). e district court
denied the motion and the Defendants appeal.
e United States Court of Appeals for the
Seventh Circuit reverses the district court’s decision
and dismisses this suit pursuant to the FTAIA.
e Sherman looks to determine whether the
challenged anticompetitive conduct stems from an
independent decision or from an agreement, tacit
or express. e Court nds that the FTAIA limits
the applicability of the Sherman Act. e Sherman
Act does not regulate the competitive conditions
of other nations’ economies. It can reach outside
the borders of the United States, but only when
the conduct has an eect on American commerce.
However, the FTAIA makes it clear that the
Sherman Act does not prevent American exporters
from entering into business arrangements as long as
it only adversely aects foreign markets.
e Court applies the FTAIA’s requirements
to the Plainti’s complaint, nding that it bars this
suit. “e aw in the district court’s reasoning is
that it essentially conates the ‘import commerce’
exception and the “direct eects” exception. If
foreign anticompetitive conduct can ‘involve’ U.S.
import commerce even if it is directed entirely at
markets overseas, then the ‘direct eects’ exception is
eectively rendered meaningless. Under the district
court’s reading of the statute, a foreign company
that does any import business in the United States
would violate the Sherman Act whenever it entered
into a joint-selling arrangement overseas regardless
of its impact on the American market. is
would produce the very interference with foreign
economic activity that the FTAIA seeks to prevent.”
657 F.3d 660-61.
“e import-commerce exception captures
foreign anticompetitive conduct (thus bringing it
back within the Sherman Act’s reach) if the overseas
anticompetitive conduct actually ‘involves’ the
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