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United States: Supreme Court Decision in Pfizer, Inc., et al. V. Government Of India et al. (Right of Foreign Nations to Sue in U.S. Courts under Antitrust Laws)
Published online by Cambridge University Press: 26 May 2017
Abstract
A foreign nation otherwise entitled to sue in the courts of this country held to be a "person" within the meaning of §4 of the Clayton Act and thus to be entitled to sue for treble damages under the federal antitrust laws to the same extent as any other plaintiff. Pp. 3-11.
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- Judicial and Similar Proceedings
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- Copyright © American Society of International Law 1978
References
* [Reproduced from the Slip Opinion provided by the U.S. Supreme Court. The syllabus constitutes no part of the Opinion of the Court but has been prepared by the Reporter of Decision for the convenience of the reader. The Opinion at I.L.M. page 94 and the Dissenting Opinion at I.L.M. page 98 are subject to formal revision before publication in the preliminary print of the United States Reports. Typographical or other formal errors may be made before the preliminary print goes to press.
[The U.S. Court of Appeals for the Eight Circuit Decision of August 27, 1975, appears at 14 I.L.M. 1409 (1975).]
1 Similar actions were also brought by Spain, South Korea, West Germany, Colombia, Kuwait and the Republic of Vietnam. Vietnam was a party to this case in the Court of Appeals and was named as a respondent in the petition for certiorari. Subsequent to the filing of the petition Vietnam's complaint was dismissed by the District Court on the ground that the United States no longer recognized the government of Vietnam; the dismissal was affirmed by the Court of Appeals. Republic of Vietnam v. Pfizer, Inc., 556 F. 2d 892 (CA8). Vietnam has not participated as a party in this Court; Some of the other suits have been settled and the rest are pending.
2 The antibiotic antitrust litigation originated with a proceeding brought by the Federal Trade Commission which resulted in an order requiring petitioners Pfizer and American Cyanamid to grant domestic applicants licenses under their patents for broad spectrum antibiotics. See Charles Pfizer & Co. v. FTC,401 F. 2d 574 (CA6). Criminal antitrust proceedings against petitioners Pfizer, American Cyanamid and Bristol-Myers were eventually dismissed. United States v. Chas. Pfizer & Co., 367 F. Supp. 91 (SDNY); see also United States v. Chas. Pfizer & Co., 426 F. 2d 32 (CA2), modified, 437 F. 2d 957 (CA2), aff'd by an equally divided court, 404 U. S. 548. Most of the large number of civil suits have been settled. See West Virginia v. Chas. Pfizer & Co., 314 F. Supp. 710 (SDNY), aff'd, 440 F. 2d 1079 (CA2).
3 Each respondent also sued in a parens patriae capacity; those claims were dismissed in a separate appeal and are not at issue here. Pfizer, Inc. v. Lord, 522 F. 2d 612,615-620 (CA8).
4 Petitioners moved to dismiss the suits brought by India and Iran. The Philippines moved to strike petitioners’ affirmative defense.
5 The District Court relied upon an earlier decision denying a motion to dismiss a related suit brought by the State of Kuwait, see n. 1, supra. In re Antibiotic Antitrust Actions, 333 F. Supp. 315 (SDNY). An appeal was taken from that decision but was dismissed by stipulation of the parties. Thus, the Court of Appeals’ decision in the present case marked the first appellate consideration of the issue.
6 A petition for mandamus had previously been denied. Pfizer, Inc. v. Lord, 522 F. 2d 612 (CA8).
8 Section 7 of the Sherman Act was repealed in 1955 as redundant. Ch. 283, §3, 69 Stat. 283; see S. Rep. No. 619, 84th Cong., 1st Sess., 2 (1955).
9 The Sherman and Clayton Acts each provide that the word “person“ “shall bo deemed to include corporations and associatioas existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.“ 15 U.S.C. §§ 7, 12.
It is apparent that this definition is inclusive rather than exclusive, and does not by itself imply that a foreign government, any more than a natural person, falls without its bounds. Cf. Hclvering v. Morgan's Inc., 293 U. S. 121, 125 n. 1; United States v. New York Telephone Co., U. S. —, — n. 15.
10 See Apex Hosiery Co. v. Leader, 310 U.S. 469,489 n. 10.
11 The dissent seems to contend that the Sherman Act's reference to commerce with foreign nations was intended only to reach conspiracies affecting goods imported into this country. Post, at 4-5. But the scope of congressional power over foreign commerce has never been so limited, and it is established that the antitrust laws apply to exports as well. See, e. g., Timken Roller Bearing Co. v. United States, 341 U. S. 593, 599; United States v. Minnesota Mining & Mfg. Co., 92 F. Supp. 947 (Mass.).
12 Moreover, in the Wcbb-Pomerene Act, ch. 50, 40 Stat. 516, as amended, 15 U.S.C. § 61 ct seq., Congress has provided a narrow and carefully limited exception for export activity that would otherwise violate the antitrust laws. See United States v. Concentrated Phosphate Export Assn., 393 U. S. 199. A judicial rule excluding. all non-Americans as plaintiffs in treble-damage cases would hardly be consistent with the precisely limited exception Congress has established to the general applicability of the antitrust laws to foreign commerce.
13 See n. 2, supra.
14 It has been suggested that depriving foreign plaintiffs of a trebledamage remedy and thus encouraging illegal conspiracies would affect American consumers in other ways as well: by raising worldwide prices and thus contributing to American inflation; by discouraging foreign entrants who might undercut monopoly prices in this country; and by allowing violators to accumulate a “war chest” of monopoly profits to police domestic cartels and defend fhem from Iccral attacks. Velvel, “Antitrust Suits by Foreign Nations,” 25 Cath. U. L. Rev. 1, 7-S (1975).
15 The case relied on by petitioners as establishing a general rule, United States v. Fox, 94 U. S. 315, merely adopted New York's construction of its Statute of Wills, as a matter of state law. Id., at 320. Even in New York the word “person” did not have a settled meaning. Compare In re Will of Fox, 52 N. Y. 530, aff'd sub nom. United States v. Fox, 94 U. S. 315, with Republic of Honduras v. Soto, 112 N. Y. 310, 19 N. E. S45. In fact, contemporaneous cases generally held that the sovereign was entitled to have the benefit of a statute extending a right to “persons.” See, e. g., Stanley v. Schwalby, 147 U. S. 508, 514-517; Dollar Savings Bank v. United States, 19 Wall. 227,239; Lofton Cotton v. United States, 11 How. 229, 231.
Cases construing federal statutes of the same era also indicate that the use of the term “person” did not invariably imply an intent to exclude governmental bodies. See, e. g., Ohio v. Helvering, 292 TJ. S. 360 (“person“ in §§ 3140 and 3244 of the Revised Statutes of 1878 includes a State); California v. United States, 320 U. S. 577, 585-5S6 (“person” in the Shipping Act of 1916, ch. 451, 39 Stat. 728, as amended, 46 U. S. C. § S01 et seq., includes both a State and a city); Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U. S. 390, 396 (“person” in the Sherman Act includes a city).
18 Even earlier, in Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U. S. 390, 396, the Court held without extended discussion that a city was entitled to sue for treble domains.
17 In 1955 Congress amended the Clayton Act to allow the United States to sue for single damages when it is injured in its business or property. Ch. 283, § 1,69 Stat. 282,15 .U. S. C. § 15A.
18 While the dissent says there are “weapons in the arsenate of foreign nations” sufficient to enable them to counter anticompetitive conduct, such as cartels or boycotts, post, at 8, such a political remedy is hardly available to a foreign nation faced with monopolistic control of the supply of medicines needed for the health and safety of its people.
19 Congress has explicitly conferred jurisdiction upon the federal courts to entertain such suits: “The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and is between—
(4) a foreign state … as plaintiff and citizens of a State or of different States.” 28 U. S. C. A. § 1332 (a)(4) (Supp. 1977).
Among the actions foreign sovereign governments were entitled to maintain at the time of the passage of the Sherman and Clayton Acts were suits for common-law business torts, such as unfair competition, similar in general nature to antitrust claims. See French Republic v. Saratoga Vichy Spring Co., 191 U. S. 427 (1903); La Republique Francaise v. Schultz, 194 F. 500 (SDNY 1899).
20 In a letter that was presented to the Court of Appeals when it reconsidered this case en banc, the Legal Adviser of the Department of State advised “that the Department of State would not anticipate any foreign policy problems if … foreign governments [were held to be] persons within the'meaning of Clayton Act §4.” A copy of this letter is contained in the Memorandum for the United States as Amicus Curiae in opposition to the petition for a writ of certiorari filed in this Court.
21 Cf. n. 1, supra.
1 The Webb Pomerene Act exempts certain actions of export associations from the antitrust laws, but the exemption applies only if the association's actions do not restrain trade or affect the price of exported products within the United States and do not restrain the export trade of any domestic competitor of the association. 15 U. S. C. § 62. Although the Act was subsequently regarded as carving out an exemption from the antitrust laws, the legislative history indicates considerable question at the time whether the conduct of exporters meeting the conditions specified in the Act would have violated the antitrust laws even without the putative exemption. See H. R. Rep. No. 50, 05th Cong., 1st Sess., 2 (1917).
2 The equivalent language of subsequent drafts can be found at 21 Cong. Rec. 2598-2600.
3 The Court adverts to a letter from the Legal Advisor of the State Department to the Court of Appeals advising that no foreign policy problems were anticipated from a decision holding foreign governments to be persons within the meaning of § 4 of the Clayton Act. The significance of this communication escapes me. Nothing in the Constitution suggests legislative power may be exercised jointly by the courts and the Department of State.
2 The Court quotes a letter to the effect that “the Department of State would not anticipate any foreign policy problems” if § 4 were held to embrace suits by foreign governments. Ante, at 11 n. 20 (emphasis supplied). But resolution of the issue here depends not only upon foreign policy considerations but also upon considerations relevant to the general welfare of the United States. The latter arc quite beyond the concern of the Department of State and should be considered by the Legislative Branch. The international business conducted by American corporations has economic and social ramifications of great importance to our country.