December 16, 2003

 

 

World's Largest Vitamin Manufacturers Face US Court Ruling On Antitrust Claims

 

The U.S. Supreme Court said on Monday it would hear the world's largest vitamin manufacturers' appeal of a ruling that allowed foreign buyers to pursue antitrust claims in this country over foreign transactions.

 

Aventis, Roche, BASF and other vitamin makers are contesting a U.S. appeals court decision that reinstated price-fixing claims brought by five foreign companies.

 

The lawsuit, filed in 2000 by companies located in Australia, Ecuador, Panama and Ukraine, claimed a worldwide cartel conspired to fix vitamin prices and allocate markets around the world. 

 

A federal judge dismissed the case for lack of jurisdiction, finding U.S. antitrust laws provide no remedy for "persons injured abroad in transactions otherwise unconnected with the United States."

 

But the appeals court disagreed. It ruled foreign buyers could bring a U.S. antitrust claim as long as they can show the global cartel affected U.S. commerce.

 

"Disallowing suits by foreign purchasers injured by a global conspiracy because they themselves were not injured by the conspiracy's U.S. effects runs the risk of inadequately deterring global conspiracy," the appeals court said.

 

Lawyers for the vitamin manufacturers argued the appeals court misconstrued federal antitrust law, which they said does not cover claims for injuries sustained in purely foreign commerce.

 

"Cartel conspiracy cases are massive, sprawling and expensive to litigate," they said. "Allowing such cases to be transported from around the globe to this country, not only compounds the burdens they impose on litigants and the U.S. judicial system, but also infringes the sovereign prerogatives of foreign nations."

 

The Chamber of Commerce business group supported the appeal. It warned that the ruling would produce "overwhelming burdens" on American companies and "flood U.S. courts with claims by foreign plaintiffs."

 

Lawyers for the five foreign buyers said the appeals court ruling was correct on the merits and urged the justices to reject the appeal.

 

The Supreme Court will hear arguments in the case in the spring, with a decision due by the end of June.

 

Justice Sandra Day O'Connor did not take part in the case. The reason she did not give, but she typically does not participate when she owns stock in a company that has a case before the high court.