In Animal Science Products Inc. v. China Minmetals Co., 654 F.3d 462 (3d Cir. 2011), the Third Circuit held that the Foreign Trade Antitrust Improvements Act (“FTAIA”) does not impose a subject matter jurisdiction bar on antitrust claims in federal court, but rather specifies elements of a Sherman Act claim.
Why does this matter? It matters because Congress and the courts care whether U.S. courts are open to foreign entities’ foreign antitrust claims. There are strong policy reasons for not wanting U.S. courts to be open to all such claims, especially those with a tenuous connection to U.S. commerce.
The precise issue in Animal Science Products is technical and a bit complicated, but whether the FTAIA bars jurisdiction over certain foreign claims, or whether it “merely” specifies elements of a claim, might, in some cases, determine whether a case asserting foreign claims is tossed on a motion to dismiss or survives until after possibly expensive fact discovery. (As I’ve suggested previously, the implications of the distinction may be overblown — under either approach, some cases are clearly outside the reach of the Sherman Act. See, e.g., Minn-Chem Inc. et al. v. Agrium Inc., 657 F.3d 650, 653 (7th Cir. 2011) (dismissal appropriate under either standard).)
On Monday, the Supreme Court refused to grant certiorari to hear the Animal Science Products case. So for now, the decision stands in the Third Circuit. In 2003, the Seventh Circuit in the United Phosphorus case reached the opposite conclusion (that the FTAIA does impose a subject matter jurisdiction bar). However, this fall, in Minn-Chem Inc. et al. v. Agrium Inc., 657 F.3d 650, 653 (7th Cir. 2011), the Seventh Circuit suggested that United Phosphorus might be “ripe for reconsideration,” but reserved the issue for possible later resolution. We are likely to see more case law in this area in the future.