Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co.

• Decision Date: 14 June 2018
• Docket Number: No. 16–1220.,16–1220.
• Citation: 201 L.Ed.2d 225,138 S.Ct. 1865
• Parties: ANIMAL SCIENCE PRODUCTS, INC., et al., Petitioners v. HEBEI WELCOME PHARMACEUTICAL CO. LTD., et al.
• Court: U.S. Supreme Court

138 S.Ct. 1865

201 L.Ed.2d 225

ANIMAL SCIENCE PRODUCTS, INC., et al., Petitioners

v.HEBEI WELCOME PHARMACEUTICAL CO. LTD., et al.

No. 16–1220.

Supreme Court of the United States

Argued April 24, 2018.

Decided June 14, 2018.

Michael J. Gottlieb, Washington, DC, for Petitioners.

Brian H. Fletcher, for the United States, as amicus curiae, by special leave of the Court, supporting the petitioners.

Carter G. Phillips, for the Ministry of Commerce of the People's Republic of China, as amicus curiae, by special leave of the Court, supporting the respondents.

Jonathan M. Jacobson, New York, NY, for Respondents.

James T. Southwick, Shawn L. Raymond, Susman Godfrey LLP, Houston, TX, Michael D. Hausfeld, Brian A. Ratner, Melinda R. Coolidge, Hausfeld LLP, Michael J. Gottlieb, Karen L. Dunn, William A. Isaacson, Aaron E. Nathan, Boies Schiller Flexner LLP, Washington, DC, David Boies, Boies Schiller Flexner LLP, Armonk, NY, Brent W. Landau, Hausfeld LLP, Philadelphia, PA, for Petitioners.

Jonathan M. Jacobson, Daniel P. Weick, Justin A. Cohen, Wilson Sonsini Goodrich & Rosati, P.C., New York, NY, Susan A. Creighton, Scott A. Sher, Bradley T. Tennis, Elyse Dorsey, Wilson Sonsini Goodrich & Rosati, P.C., Washington, D.C., for Respondents.

Justice GINSBURG delivered the opinion of the Court.

When foreign law is relevant to a case instituted in a federal court, and the foreign government whose law is in contention submits an official statement on the meaning and interpretation of its domestic law, may the federal court look beyond that official statement? The Court of Appeals for the Second Circuit answered generally "no," ruling that federal courts are "bound to defer" to a foreign government's construction of its own law, whenever that construction is "reasonable." In re Vitamin C Antitrust Litigation, 837 F.3d 175, 189 (2016).

We hold otherwise. A federal court should accord respectful consideration to a foreign government's submission, but is not bound to accord conclusive effect to the foreign government's statements. Instead, Federal Rule of Civil Procedure 44.1 instructs that, in determining foreign law, "the court may consider any relevant material or source ... whether or not submitted by a party." As "[t]he court's determination must be treated as a ruling on a question of law," Fed. Rule Civ. Proc. 44.1, the court "may engage in its own research and consider any relevant material thus found," Advisory Committee's 1966 Note on Fed. Rule Civ. Proc. 44.1, 28 U.S.C. App., p. 892 (hereinafter Advisory Committee's Note). Because the Second Circuit ordered dismissal of this case on the ground that the foreign government's statements could not be gainsaid, we vacate that court's judgment and remand the case for further consideration.

I

Petitioners, U.S.-based purchasers of vitamin C

(hereinafter U.S. purchasers), filed a class-action suit against four Chinese corporations that manufacture and export the nutrient (hereinafter Chinese sellers). The U.S. purchasers alleged that the Chinese sellers, two of whom are respondents here, had agreed to fix the price and quantity of vitamin C exported to the United States from China, in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. More particularly, the U.S. purchasers stated that the Chinese sellers had formed a cartel "facilitated by the efforts of their trade association," the Chamber of Commerce of Medicines and Health Products Importers and Exporters (Chamber). Complaint in No. 1:05–CV–453, Docket No. 1, ¶ 43. The Judicial Panel on Multidistrict Litigation consolidated the instant case and related suits for pretrial proceedings in the United States District Court for the Eastern District of New York.

The Chinese sellers moved to dismiss the U.S. purchasers' complaint on the ground that Chinese law required them to fix the price and quantity of vitamin C

exports. Therefore, the Chinese sellers urged, they are shielded from liability under U.S. antitrust law by the act of state doctrine, the foreign sovereign compulsion doctrine, and principles of international comity. The Ministry of Commerce of the People's Republic of China (Ministry) filed a brief as amicus curiae in support of the Chinese sellers' motion. The Ministry's brief stated that the Ministry is "the highest administrative authority in China authorized to regulate foreign trade," App. to Pet. for Cert. 190a; that the Chamber is "an entity under the Ministry's direct and active supervision" and is authorized to regulate vitamin C exports, id., at 196a; and that the conspiracy in restraint of trade alleged by the U.S. purchasers was in fact "a regulatory pricing regime mandated by the government of China," id., at 197a.¹

In response, the U.S. purchasers disputed that Chinese law required the Chinese sellers to engage in price fixing. Among other things, the U.S. purchasers noted that the Ministry had not identified any written law or regulation expressly ordering the Chinese sellers' price agreement.² They also highlighted a Chamber announcement that the manufacturers "were able to reach a self-regulated agreement ... whereby they would voluntarily control the quantity and pace of exports ... without any government intervention." App. 109. In addition, the U.S. purchasers presented expert testimony that the Chinese Government's authorization of a Vitamin C Subcommittee within the Chamber did not necessarily mean that the subcommittee's price fixing was mandated by law.

The District Court denied the Chinese sellers' motion to dismiss the complaint in relevant part. In re Vitamin C Antitrust Litigation, 584 F.Supp.2d 546, 559 (E.D.N.Y.2008). That court acknowledged that the Ministry's amicus brief was "entitled to substantial deference." Id., at 557. The court, however, did not regard the Ministry's statements as "conclusive," emphasizing particularly that the U.S. purchasers had submitted evidence suggesting that the price fixing was voluntary. Ibid. The record, the District Court determined, was "too ambiguous to foreclose further inquiry into the voluntariness of [the Chinese sellers'] actions." Id., at 559.

After further discovery, focused on whether Chinese law compelled the Chinese sellers to enter into a price-fixing agreement, the Chinese sellers moved for summary judgment. See In re Vitamin C Antitrust Litigation, 810 F.Supp.2d 522, 525–526 (E.D.N.Y.2011). The Ministry submitted an additional statement, reiterating that "the Ministry specifically charged the Chamber ... with the authority and responsibility ... for regulating, through consultation, the price of vitamin C

manufactured for export." App. 133. The Chinese sellers tendered expert testimony in accord with the Ministry's account, which stressed that the Ministry's "interpretation of its own regulations and policies carries decisive weight under Chinese law." Id., at 142. The U.S. purchasers, in response, cited further materials supporting their opposing view, including China's statement to the World Trade Organization (WTO) that it "gave up export administration of ... vitamin C" in 2002. 810 F.Supp.2d, at 532 (internal quotation marks omitted). Denying the Chinese sellers' motion for summary judgment, the District Court held that Chinese law did not require the sellers to fix the price or quantity of vitamin C exports. Id., at 525.

The case was then tried to a jury, which returned a verdict for the U.S. purchasers. The jury found that the Chinese sellers had agreed to fix the prices and quantities of vitamin C

exports, see App. to Pet. for Cert. 276a–279a, and further found that the Chinese sellers were not "actually compelled" by China to enter into those agreements, id., at 278a. In accord with the jury's verdict, the District Court entered judgment for the U.S. purchasers, awarding some $147 million in treble damages and enjoining the Chinese sellers from further violations of the Sherman Act.

The Court of Appeals for the Second Circuit reversed, holding that the District Court erred in denying the Chinese sellers' motion to dismiss the complaint. In re Vitamin C Antitrust Litigation, 837 F.3d 175, 178, 195 (2016). The Court of Appeals determined that the propriety of dismissal hinged on whether the Chinese sellers could adhere to both Chinese law and U.S. antitrust law. See id., at 186. That question, in turn, depended on "the amount of deference" owed to the Ministry's characterization of Chinese law. Ibid . Cognizant of "competing authority" on this question, ibid., the Court of Appeals settled on a highly deferential rule: "[W]hen a foreign government, acting through counsel or otherwise, directly participates in U.S. court proceedings by providing a [statement] regarding the construction and effect of [the foreign government's] laws and regulations, which is reasonable under the circumstances presented, a U.S. court is bound to defer to those statements," id., at 189. The appeals court "note[d] that[,] if the Chinese Government had not appeared in this litigation, the [D]istrict [C]ourt's careful and thorough treatment of the evidence before it in analyzing what Chinese law required at both the motion to dismiss and summary judgment stages would have been entirely appropriate." Id., at 191, n. 10.

Applying its highly deferential rule, the Court of Appeals concluded that the Ministry's account of Chinese law was "reasonable." In so concluding, the Court of Appeals inspected only the Ministry's brief and sources cited therein. Id., at 189–190. Because it thought that "a U.S. court [must] not embark on a challenge to a foreign government's official representation," id., at 189, the Court of Appeals disregarded the submissions made by the U.S. purchasers casting doubt on the Ministry's account of Chinese law, id., at 189–190. Based solely on the Ministry's statements, the Court of Appeals held that "Chinese law required [the Chinese sellers] to engage in activities in China that constituted antitrust violations here in the United States." Ibid.

We granted...