Roche Holding AG, Aventis SA, BASF AG and more than a dozen other alleged participants in global cartels that fixed vitamin prices must face claims from non-US customers that may amount to billions of dollars, a US appeals court said.
The court revived lawsuits by Australian, Ukrainian and South American customers that had been dismissed because the purchasers didn't buy the vitamins in the US The panel said US antitrust law allows damage claims by foreign customers to deter price fixing by global conspiracies that damage US commerce.
"This is a multibillion-dollar decision in all likelihood," said Paul Gallagher, an antitrust lawyer who represented Empagran SA and Nutricion Animal SA.
Roche, the world's largest vitamin producer, Aventis and three other drugmakers agreed in 1999 to pay US$1.17 billion to settle claims they fixed prices in the US$20 billion-a-year US market.
"There is likely to be as many transactions and as much volume at stake for the claims relating to the foreign plaintiffs' transactions," said Gallagher, whose clients include Australia's Brisbane Export Corp and Winddridge Pig Farm, which purchased vitamins for feed.
US District Judge Thomas F. Hogan, who approved the 1999 settlement, dismissed foreign customers' claims, saying they weren't covered by US antitrust law. The appeals court disagreed.
"Disallowing suits by foreign purchasers injured by a global conspiracy because they themselves were not injured by the conspiracy's US effects runs the risk of inadequately deterring global conspiracies that harm US consumers," the US Court of Appeals for the District of Columbia Circuit ruled.
Without such suits, price fixers would decide to offset losses from US damage suits by keeping profits from foreign sales, the court said. "The US consumer would only gain, and would not lose, by enlisting enforcement by those harmed by the foreign effects of the global conspiracy," the three-judge panel said in a 2-1 decision.
The decision is likely to be reviewed by the Supreme Court because it conflicts with other appeals courts on whether foreign plaintiffs may sue in US courts to recover damages for overseas price fixing, said Herbert Hovenkamp, an antitrust expert at the University of Iowa law school.
"This is kind of the ugly American in antitrust where we are exporting our values," Hovenkamp said. He said the ruling "puts us in the position of economic policeman for the world. We come in this body of law that says if you are unhappy with your antitrust law just use ours."
Hovenkamp questioned if Congress intended to allow such lawsuits when it passed the 1982 Foreign Trade Antitrust Improvements Act.
"Congress was really concerned about protecting American businesses and American consumers," he said. "Congress has not been in the habit in recent years of giving lawsuits to foreign groups of plaintiffs for purely foreign injuries."
The DC Circuit split on the question of congressional intent. Judge Harry Edwards wrote for the majority that "Congress intended for subject matter jurisdiction to exist over the conduct of an international cartel that had an effect on domestic commerce, even if the plaintiff's claim does not arise from that domestic effect."
Judge Karen Henderson dissented, saying "the more natural reading" of the law "is the narrow one adopted by the district court" and the 5th US Circuit Court of Appeals.
In 2001, the New Orleans-based appeals court dismissed a lawsuit by Norway's Statoil ASA to recover damages from foreign participants in a conspiracy to fix marine construction prices. The Supreme Court refused to consider Statoil's appeal.
The DC Circuit's ruling sided with a decision by a federal appeals court in New York, which allowed damage suits by foreign customers of the Christie's International Plc and Sotheby's Holdings Inc auction houses. Christie's and Sotheby's participated in a conspiracy to fix commissions.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure