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Policy

Supreme Court Nixes Foreigners' Suits In U.S. Courts

by Marc S. Reisch
June 21, 2004 | APPEARED IN VOLUME 82, ISSUE 25

In a case involving vitamin price fixing, the U.S. Supreme Court ruled that non-U.S. claimants cannot sue international companies in U.S. courts for antitrust violations occurring abroad.

But the Supreme Court left an opening for foreign plaintiffs. It sent back to a lower court the question of whether price-fixing arrangements in the U.S. led to higher vitamin prices for foreign buyers. If so, then foreign buyers now pressing a class-action lawsuit against BASF, Roche, Aventis, and others may still be able to continue their case.

Vitamin makers have been on the defensive since 1999 when U.S. and European authorities convicted many of participating in an international price-fixing cartel. For now, however, the court’s ruling is a victory for the vitamin makers, who are subjects of a suit brought by buyers in Australia, Ecuador, Panama, and Ukraine.

The ruling is also a victory for other multinationals. Many big firms feared international plaintiffs would sue in U.S. courts to wrest big settlements—and the treble damages allowed under U.S. law—for transgressions outside the U.S.

The court's decision should also make a number of foreign governments happy. They have complained that suits like those brought by vitamin buyers operating outside of the U.S. usurped their authority. The justices agreed that U.S. courts ought to avoid unreasonable interference with the sovereign authority of other nations.

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