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January 27, 2003
Volume 81, Number 4
CENEAR 81 4 p. 14
ISSN 0009-2347



Reagan-era law gives non-U.S. plaintiffs access to stateside courts

GONE, BUT Roche sold its vitamins and fine chemicals unit to DSM last year but is still responsible for claims arising from price-fixing suits.
federal appeals court has ruled that Roche, Aventis, BASF, and other vitamin manufacturers that are part of an alleged price-fixing cartel can be sued by non-U.S. customers in the U.S. The companies, which have already reached settlements with the U.S. Justice Department, the European Commission, and U.S. customers, now face new claims that may amount to billions of dollars.

The Jan. 17 decision reversed a lower court ruling that found foreign interests had no legal claims because the products were purchased outside the U.S. The appeals court bases its ruling on the 1982 Foreign Trade Antitrust Improvements Act, which it says allows claims by foreign customers to deter price fixing by global cartels that damage U.S. commerce.

Representatives of BASF, Roche, and Aventis say they are studying the new ruling and are prepared to fight it all the way to the Supreme Court.

According to Peter Gallagher, a Washington, D.C.-based antitrust lawyer representing several foreign vitamin purchasers, the ability of non-U.S. plaintiffs to sue in the U.S. dissuades conspirators from believing they can cover the cost of legal penalties with profits from non-U.S. markets.

Legal experts are skeptical of the appeals court's ruling. "It is not regarded historically as the proper interpretation of what is a very badly drafted and ambiguously worded law," says Herbert Hovenkamp, an antitrust expert at the University of Iowa law school. "It seems to be a big stretch--way beyond Congress' intent."

Hovenkamp says the ruling will not be viewed well by foreign interests who are "skeptical and angry about the U.S. using its antitrust law abroad." Gallagher contends, however, that the decision reflects the realities of global trade. "This is no ugly-American attempt to export our trade laws," he says. "It is ironic that the companies that fight to break down trade barriers are anxious to resurrect barriers in this instance."


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Copyright © 2003 American Chemical Society

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