Seventh Circuit Allows Foreign Price-Fixing Claims to Proceed

In Minn-Chem, Inc. v. Agrium Inc., No. 10-1712 (June 27, 2012), the en banc Seventh Circuit addressed the Foreign Trade Commerce Antitrust Improvements Act (FTAIA) in the context of an alleged worldwide scheme to fix potash prices (including to buyers in the U.S.). The Court’s holding has two notable features. First, according to the Seventh Circuit, the FTAIA establishes an element of a plaintiff’s claim, but is not a subject matter jurisdictional bar. Second, as to the import commerce exception, the court held that the “direct” effect on import commerce required by the statute means “a reasonably proximate causal nexus.” The Minn-Chem court disagreed with the approach of the Ninth Circuit in United States v. LSL Biotechs., 379 F.3d 672 (9th Cir. 2004), where the court held that a “direct” effect is one that “follows as an immediate consequence” of the defendant’s activity.

The Seventh Circuit’s approach thus makes it easier for U.S. plaintiffs or importers to sue foreign entities on worldwide price-fixing claims. Applying that approach, the court affirmed the district court’s decision not to dismiss the complaint on FTAIA grounds.