In the 

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 18-2327 

MOUNTAIN CREST SRL, LLC, 

Plaintiff-Appellant, 

v.

ANHEUSER-BUSCH INBEV 

SA/NV, individually and as 

successor to InBev SA/NV and 

Interbrew S.A., et al.,

Defendants-Appellees. 

____________________ 

Appeal from the United States District Court for the 

Western District of Wisconsin. 

No. 3:17-cv-00595-jdp — James D. Peterson, Chief Judge. 

____________________ 

ARGUED NOVEMBER 2, 2018 — DECIDED SEPTEMBER 5, 2019 

____________________ 

Before RIPPLE, KANNE, and ROVNER, Circuit Judges. 

RIPPLE, Circuit Judge. Mountain Crest SRL, LLC (“Mountain Crest”), brought this action, alleging that Anheuser Busch InBev SA/NV (“Anheuser-Busch”) and Molson 

Coors Brewing Company (“Molson Coors”) had conspired 

to damage Mountain Crest’s beer exports to Ontario, Cana-
2 No. 18-2327 

da, in violation of the Sherman Antitrust Act, 15 U.S.C. §§ 1–

2. Mountain Crest also alleged that Anheuser-Busch and 

Molson Coors were enriched unjustly in violation of Wisconsin law. 

Much, although not all, of this dispute centers around 

two agreements: an agreement in 2000 between two Canadian entities, Brewers Retail, Inc. (“BRI”), and the Liquor Control Board of Ontario (“LCBO”); and an agreement in 2015 

between Anheuser-Busch, Molson Coors, BRI, the LCBO and 

the government of Ontario. Mountain Crest alleged that Anheuser-Busch and Molson Coors had conspired to restrain 

trade in the Ontario beer market and had engaged in monopolistic behavior through the two agreements. Among 

other things, Anheuser-Busch and Molson Coors carried on 

a group boycott to force the LCBO to enter the agreement in 

2000 to ensure that BRI, an entity Anheuser-Busch and Molson Coors control, was the only retailer in Ontario selling 

beer in packages larger than six containers. Mountain Crest 

further claimed the conspiracy extended into 2014 and 2015 

when Anheuser-Busch and Molson Coors used a variety of 

tactics to continue the retail arrangement between BRI and 

the LCBO, including a threat to bring expropriation litigation under the North American Free Trade Agreement 

(“NAFTA”). Mountain Crest contends that these agreements, as well as BRI’s policy of promoting sales of Anheuser-Busch’s and Molson Coors’ products in its stores to 

the detriment of American competition, inhibited its ability 

to compete in the Ontario beer market.1 

 

1 Mountain Crest submitted that the alleged anticompetitive conspiracy 

prevents it from competing in the Ontario market because its profits are 

(continued ... ) 
No. 18-2327 3

Anheuser-Busch and Molson Coors moved to dismiss the 

complaint under Federal Rule of Civil Procedure 12(b)(6) on 

multiple grounds. The district court ruled that the act of 

state doctrine required dismissal of the federal claims and 

granted the motion; it did not address Anheuser-Busch and 

Molson Coors’ other grounds for dismissal of the federal 

claims.2 The district court then relinquished supplemental 

jurisdiction over the state-law unjust enrichment claim and 

dismissed the case without prejudice to Mountain Crest’s 

bringing that claim in state court. Mountain Crest timely appealed.3 For the reasons set forth in this opinion, we affirm 

in part and vacate in part the judgment of the district court 

and remand the case for proceedings consistent with this 

opinion. 

I.

BACKGROUND

A.

Mountain Crest is an independently owned brewery 

based in Monroe, Wisconsin. In 2009, Mountain Crest began 

 

( ... continued) 

driven by economies of scale, achieved by distributing large packages of 

beer. 

2 The district court’s jurisdiction is predicated on 28 U.S.C. §§ 1331, 1337, 

and 1367. We note that, although Mountain Crest does not specifically 

invoke 28 U.S.C. § 1332, the facts alleged in the Second Amended Complaint appear to establish that the district court also had diversity jurisdiction over Mountain Crest’s state-law claim. 

3 We have jurisdiction pursuant to 28 U.S.C. § 1291. 
4 No. 18-2327 

exporting its beer to Ontario, Canada, seeking to compete in 

the low-value segment of the beer market there. 

The Second Amended Complaint alleges4

 that Anheuser-Busch is a corporation organized under the laws of 

Belgium and headquartered there.5 Labatt, a Canadian 

brewery, is currently a subsidiary of Anheuser-Busch, and 

through Labatt, Anheuser-Busch has about a forty-three percent market share in the Canadian beer market. Mountain 

Crest claims that senior executives based out of St. Louis, 

Missouri, manage Labatt through its “North America” zone 

and that they and their predecessors oversaw and were involved intimately in the alleged antitrust conspiracy.

Molson Coors is a Delaware corporation with principal 

places of business in Denver, Colorado, and Montreal, Quebec. Molson Coors is the product of a 2005 merger between 

Molson, Inc. and the Adolph Coors Company. According to 

Mountain Crest, Molson Coors’ Canadian subsidiary, Molson, controls roughly thirty-four percent of the Canadian

beer market. Mountain Crest alleges that Molson Coors’ senior executives participated in the alleged conspiracy with 

Anheuser-Busch and its predecessors and acted to ensure 

the conspiracy’s continued operation. 

 

4

 This suit comes to us on a motion to dismiss. Therefore, the events described are as outlined in Mountain Crest’s Second Amended Complaint. 

5 Anheuser-Busch was formed when Belgian-based InBev SA/NV acquired the St. Louis-based Anheuser-Busch Company in 2008. InBev was 

the product of a 2004 stock-for-stock merger between Belgian-based Interbrew S.A. and Brazilian-based AmBev. One of Interbrew’s subsidiaries was Labatt Breweries of Canada, which Interbrew acquired in 1995. 
No. 18-2327 5

Under a Canadian law, the provinces regulate and control the sale of alcohol within their boundaries.6

 Under this 

scheme, the LCBO, a Crown agency wholly owned by the 

government of Ontario, has the authority to control the importation of beer, wine, and spirits into Ontario, and to determine the “nature, form and capacity of all packages to be 

used for containing liquor to be kept or sold.” Liquor Control Act, R.S.O. 1990, c. L.18 § 3(j) (Can.).7

 It is further authorized, by statute, to operate retail alcohol stores across the 

province. Id. § 3(d). 

At the time relevant to this suit, Ontario’s Minister of 

Consumer and Commercial Relations had oversight of the 

LCBO. As such, “[t]he LCBO was expected to implement 

Governmental policy with regard to the distribution and sale 

of alcohol within the parameters set out by the Liquor Control 

Act and related legislation.” Hughes v. Liquor Control Bd. of 

Ontario, 2018 CarswellOnt 3969, para. 84 (Can. Ont. S.C.J.) 

(WL), aff’d 145 O.R.3d 401 (Can. Ont. C.A.). Thus, “[t]he government exercised considerable control over the LCBO” and 

“[c]omplex, high-level decisions were made from 

time-to-time by the senior Government officials or in some 

 

6

See, e.g., The Importation of Intoxicating Liquors Act, R.S.C. 1985, c. I-3, 

§ 3 (Can.) (federal statute that, with limited exceptions, bans any interprovincial or international trade in alcoholic beverages other than as carried out by provincial liquor boards); R. v. Canadian Breweries Ltd., [1960] 

O.R. 601, para. 39 (Ont.) (“It requires no exhaustive analysis of the constitutional authorities to state that each Province has jurisdiction to regulate 

and control the sale of liquor within its boundaries and to fix the prices 

at which, and the conditions under which liquor may be sold.”). 

7

See also R.S.C. 1985, c. I-3 § 3. 
6 No. 18-2327 

cases, through the enactment of legislation by the Legislative 

Assembly that directed the activities of the LCBO.” Id. 

BRI is a cooperative of Ontario brewers, authorized by 

the LCBO to serve as a beer distributor, wholesaler, and retailer in Ontario. Under the Liquor Control Act, the LCBO 

controls the sale and delivery of beer at BRI stores and establishes specific terms and conditions related to the operation 

of such stores. See R.S.O. 1990, c. L.18 §§ 3(1)(d), 3(1)(e.1), 

3(1)(e); Sale of Liquor in Government Stores, O. Reg. 232/16 

§ 6 (Can.). Mountain Crest alleges that Labatt and Molson 

gained control of BRI over many years by acquiring original 

members of the cooperative; that each now owns forty-nine 

percent of BRI8; and that some of their employees serve as 

BRI directors. BRI sells beer in stores known as The Beer 

Store and allegedly enjoys a seventy-five percent market 

share of beer sales in the province.9 

In sum, there are two places to buy beer in Ontario: 

LCBO stores and The Beer Store. The LCBO operates three 

 

8 Sleeman Breweries, Ltd. (“Sleeman”), a subsidiary of the Japanese 

brewery Sapporo Ltd., also had an ownership stake in BRI for much of 

the relevant time. Sleeman, however, had minimal influence over BRI’s 

operations and was not included in any BRI board proceedings or actions involving the negotiation of the agreement in 2000 between BRI 

and the LCBO. 

9 The Beer Store generally does not display its inventory on the open 

floor. Rather, customers place orders at the cashier, and the order is retrieved from the back-of-house. The inventory is listed on a board behind 

the cashier, and brewers that are not part of BRI must pay an up-front 

listing fee to have their product identified on the board. Listings can be 

removed if the beer does not meet sales quotas established by BRI. 
No. 18-2327 7

different types of stores. “Ordinary” stores are in larger 

communities where BRI operates The Beer Store. Consistent 

with historical practice, LCBO “ordinary” stores sell wine 

and spirits as well as beer in packages of six or fewer, while 

BRI is responsible for selling large packages of beer. LCBO 

“combination” stores, by contrast, sell beer in packages larger than six, as well as wine, spirits, and small packages of 

beer, because they are in smaller communities that do not 

have The Beer Store. Under this arrangement, as a community grows, BRI can request to open a store in the locality; if 

the LCBO grants that request, the LCBO combination store 

reverts to an ordinary store. LCBO “agency” stores serve 

Ontario’s smallest communities; these stores are private 

businesses such as grocery stores that are permitted to sell 

alcohol. 

Beyond selling different package sizes of beer, BRI and 

the LCBO traditionally sold different types of beer. LCBO 

ordinary stores sold imported beer and some beer brewed in 

Ontario; The Beer Store only sold beer brewed in Ontario. 

Additionally, LCBO ordinary stores did not distribute any 

beer brands sold by BRI to restaurants and bars holding alcohol licenses. Since The Beer Store allegedly had a seventy-five percent market share and only sold domestic products, most of the beer sold in Ontario was brewed in Ontario. 

In the late 1980s and early 1990s, the United States, invoking 

the General Agreement on Tariffs and Trade (“GATT”), 

complained that these practices were discriminatory and, as 

a result of the settlement in 1993, foreign brewers were permitted to sell their beer in The Beer Store. Foreign brewers 
8 No. 18-2327 

could also access BRI’s large beer distribution network.10 The 

settlement did not affect the LCBO’s practice of selling beer 

in packages of six or fewer in its ordinary stores. 

As the GATT challenge was settled, disputes began to 

emerge between the LCBO and BRI. Pertinent to the present 

case, the LCBO expressed a desire to begin selling larger 

packages of beer in its ordinary stores. BRI and Brewers of 

Ontario, an unincorporated trade association consisting solely of Labatt and Molson, opposed this plan because such 

sales would “cannibalize BRI’s volume.”11 This dispute and 

its resolution is central to many of Mountain Crest’s claims; 

the events described here are as outlined in Mountain 

Crest’s Second Amended Complaint. 

Responding to the LCBO’s wish to sell larger packages of 

beer, the Executive Director of Brewers of Ontario noted in a 

1992 letter to the President of BRI that the GATT settlement 

required the LCBO to provide the same opportunities to foreign brewers that it provided to domestic brewers. Therefore, Labatt and Molson believed that they would not be able 

to sell large packages of their own beer in LCBO ordinary 

stores without opening those stores to large packages of foreign beer. Accordingly, they refused to sell packages of 

twelve and twenty-four containers of beer at LCBO ordinary 

 

10 Historically, the LCBO has taken first receipt of all foreign beer and 

then sells it to BRI for sale and distribution. Mountain Crest submits that, 

though the LCBO takes first receipt of all foreign beer for BRI, it is BRI 

that places the orders for imported beer. 

11 R.49-2 at 1. 
No. 18-2327 9

stores. Mountain Crest submits that this “group boycott”12

put LCBO “at the mercy of Labatt and Molson if it wished to 

expand its beer business” because the two brewers had a 

dominant market share in Canada and exclusive distribution 

agreements with the three major American beer companies.13

At times, the LCBO’s internal documents reflected its view 

that BRI was monopolistic and its practices harmed Canadian consumers.

According to the Second Amended Complaint, the LCBO 

had to negotiate with Labatt and Molson if it wanted to sell 

larger packages of beer. These negotiations, which involved 

Ontario’s Minister of Consumer and Commercial Relations, 

occurred over the next several years. In addition to what size 

packages of beer could be sold, the parties also discussed 

cost-of-service fees, minimum beer prices, additional locations of The Beer Store and LCBO stores, and BRI’s assumption of the responsibility for directly importing the beer it 

sells rather than using the LCBO as a go-between. 

On December 9, 1998, officers of Molson and Interbrew 

(which now owned Labatt) presented a template working 

 

12 See R.49 ¶ 108. In their briefing before the district court, Anheuser-Busch and Molson Coors note that any decision to not provide 

large packages of beer to LCBO ordinary stores complied with the status 

quo—the traditional practice of LCBO ordinary stores to only sell packages of six or fewer. Mountain Crest submits, however, that the boycott 

extended beyond not providing larger package sizes of domestic beers 

but also included “unwillingness to supply additional six-packs” and 

“alternative packaging formats (e.g. cans).” R.49-16 at 1; see also R.49 

¶ 108. 

13 R.49 ¶ 77. 
10 No. 18-2327 

agreement addressing the points of contention. This template included a provision prohibiting the LCBO from purchasing twelve and twenty-four packages of beer from any 

American brewers, including those brewers who did not sell 

through BRI. In a letter to the Deputy Minister of Consumer 

and Commercial Relations, the LCBO opposed this provision 

and others. Pertinently, it complained that the template 

working agreement did not address BRI’s practice of placing 

frequent small orders for imported beer. Mountain Crest 

suggests that this practice—in its words, “out-of-stocking”—

inhibited its ability to sell beer competitively in Ontario.14

Relatedly, the LCBO requested that BRI undertake importation and distribution operations for itself rather than relying 

on the LCBO to import and distribute beer to BRI in the first 

instance. Mountain Crest submits that making this change 

would have remedied the out-of-stocking issues it allegedly 

faced later on. 

Following the initial template proposal, the LCBO and 

the breweries developed a document that would become a 

final agreement in 2000. This “Working Protocol”15 included 

provisions prohibiting the LCBO from selling twelve and 

twenty-four packages of beer and requiring BRI to take first 

receipt of the imported beer. Mountain Crest alleges that the 

Ontario government pressured the LCBO to “concede to 

demands from Molson and Labatt, although the Minister, 

sensitive to international trade legal exposure, declined to do 

 

14 See id. ¶¶ 101–02. 

15 See id. ¶ 102. 
No. 18-2327 11

so via any form of law or regulation.”16 According to Mountain Crest, the breweries promised to make new investments 

in manufacturing if the LCBO acceded to their demands. At 

one point, the LCBO officials expressed that the Working 

Protocol “gives the Brewers [Molson, Inc. and Interbrew SA] 

almost a total monopoly over the beer market and effectively 

supersedes the Liquor Control Act and the powers it gives 

the Board in relation to beer.”17 

As negotiations continued, the LCBO apparently still 

sought to gain some flexibility in package sizes. During an 

LCBO Board meeting on August 9, 1999, the LCBO discussed the possibility that Molson might be interested in 

working with them to improve the proposed agreements. 

Molson, however, did not do so. The brewers allegedly continued what Mountain Crest terms as their “multi-year 

group boycott”: Labatt and Molson refused to supply additional six packs of beer beyond what the LCBO already had, 

to provide packages of their beer in cases larger than a six 

pack, or to provide any beer in cans.18 

A final round of negotiations began on March 30, 2000. 

Minutes from the meeting reflect that the brewers viewed 

allowing larger package sizes in LCBO stores to be 

“Non-Negotiable.”19 The minutes also indicate that the par-

 

16 Id. ¶ 103. 

17 Id. ¶ 105 (alteration in original). 

18 Id. ¶ 108. 

19 Id. ¶ 112. 
12 No. 18-2327 

ties decided to not include the provision from the Working 

Protocol that would have required BRI to assume import-distribution responsibilities. This provision, according 

to Mountain Crest, would have fixed the out-of-stocking issue it allegedly later faced when trying to sell its beer at The 

Beer Store. Mountain Crest submits that, on May 18, 2000, 

the LCBO Board determined that, “as a practical matter,” it 

would have to concede to the brewers’ demands because 

“the LCBO could not compel [BRI] to supply it with new 

brands of beer for sale.”20 At the end of that month, the Minister for Commerce and Commercial Relations directed the 

LCBO to sign the agreement proposed by BRI. BRI’s Chairman, also an officer of Molson, signed the contract on behalf 

of BRI. According to Mountain Crest, the parties chose to 

implement the regulatory scheme through a contract between the LCBO and BRI because a contract would not be 

public.21 Further, Mountain Crest asserts that Labatt and 

Molson’s lawyers believed that “the Cabinet or Ministerial 

directive approach” might not “prevent the LCBO from using their regulatory power under the Liquor Control Act to 

override any such a directive.”22 

On June 1, 2000, BRI and the LCBO entered into a final 

agreement (the “2000 Agreement”) to resolve the outstand-

 

20 Id. ¶ 119. 

21 Indeed, though Sleeman has a small ownership stake in BRI, it apparently was unaware of this agreement at the time it was signed. Similarly, 

Mountain Crest alleges that other brewers were unaware of the arrangement. 

22 Id. ¶ 111. 
No. 18-2327 13

ing issues of dispute between the two parties. Relevant to 

this suit, the 2000 Agreement outlined “Beer Selling Roles” 

and provided that, “[c]onsistent with historical practice, the 

LCBO will not sell beer [] in non-combination stores in packages containing more than 6 containers and will not promote 

beer at price points greater than 6 containers”23 (the “sixpack rule”). According to the Second Amended Complaint, 

“[i]n one sentence, Molson Inc. and Interbrew SA managed 

to implement not only their per se illegal horizontal market 

allocation conspiracy regarding package sizes, but also their 

per se illegal horizontal price fixing conspiracy by contractually prohibiting the LCBO from offering ‘Pack Up Pricing.’”24

In Mountain Crest’s view, a prohibition on promoting beer 

at price points greater than six containers “meant that U.S. 

brewers who only sold to the LCBO were unable to encourage sales to the LCBO by offering promotional quantitybased pricing to match discounts Defendants made available 

at [The Beer Store].”25 A Canadian court has explained that 

the 2000 Agreement merely continued current practices of 

the LCBO and BRI: 

The 2000 Beer Framework Agreement did not 

change much in the way that the LCBO and 

Brewers Retail each operated. ... Both before 

and after the Agreement was adopted, government policy precluded the LCBO from sell-

 

23 R.49-19 at 4. 

24 R.49 ¶ 122. 

25 Id.
14 No. 18-2327 

ing 12-packs and 24-packs at Ordinary 

Stores and precluded the LCBO from selling to 

licencees the beer that was exclusively distributed by Brewers Retail. The LCBO would have 

needed the Provincial Government’s approval 

to change this status quo, and the Government 

refused to grant such approval. 

Hughes, 2018 CarswellOnt 3969, para. 157. 

Mountain Crest alleges that the LCBO made efforts to renegotiate the 2000 Agreement over the next several years so 

that it could sell larger packages of beer. For example, the 

LCBO offered to allow pack-up pricing for Labatt and Molson products only, which presumably would benefit Labatt 

and Molson at the expense of their competitors. The BRI, 

however, rejected these entreaties and brewers allegedly 

took steps to ensure the status quo continued. During this 

time, both Anheuser-Busch and Molson Coors were formed 

through a variety of acquisitions and mergers that included 

Labatt and Molson respectively. Mountain Crest suggests 

that the profits Labatt and Molson enjoyed from their allegedly anticompetitive and illegal scheme made such corporate combinations possible. 

On October 20, 2009, Mountain Crest entered the Ontario 

market and paid BRI to list its Boxer Lager brand in The Beer 

Store. In total, Mountain Crest paid $701,797.08 CAD in listing fees from the date of that initial listing until the end of 

2016.26 Mountain Crest, however, allegedly had difficulties 

 

26 A listing fee refers to the price that brewer pays BRI to carry the brewer’s beer. 
No. 18-2327 15

selling its beer in The Beer Store. In a February 22, 2010 press 

release, Mountain Crest reported that its launch of Boxer Lager was “severely hindered with rolling Out of Stocks.”27

According to Mountain Crest, BRI placed small orders for 

Boxer Lager even though there was great demand for the 

product due to an advertising campaign. And, since The 

Beer Store was the only place that Mountain Crest could sell 

its large packages of Boxer Lager, Mountain Crest claims 

that it lost export sales because it could not go to another retailer and sell its beer in large packages there. Mountain 

Crest alleges that the beneficiaries of these lost sales were 

Anheuser-Busch’s and Molson Coors’ value-segment beer 

brands that were prominently displayed in The Beer Store. 

BRI responded to Mountain Crest’s press release, claiming 

that “[w]e’re not seeing that inventory arrive in stores. We’re 

at the mercy of what the LCBO ships to us.”28 Mountain 

Crest contends that this was misleading because BRI resisted 

the LCBO’s attempt to move import distribution to BRI and 

“Molson and Labatt had used their market power to completely dominate the LCBO.”29 

Mountain Crest alleges other facts detailing anticompetitive marketing and distribution practices at The Beer Store. 

Allegedly, “the most significant consumer marketing vehicle 

 

27 Id. ¶ 174; see also id. ¶ 173 (“Plaintiff’s winter 2009-2010 advertising 

campaign and launch of Boxer was significantly undermined by 

out-of-stock issues for Boxer Lager that on average affected a third of the 

440 [The Beer Store’s] that were supposed to be carrying Boxer Lager.”). 

28 Id. ¶ 176. 

29 Id. 
16 No. 18-2327 

in” The Beer Store is the “Big Ten” wall, which prominently 

lists “the top 10 selling beer brands” for customers to choose 

when placing their orders.30 All but one of the brands listed 

on the “Big Ten” wall allegedly belonged to either Anheuser-Busch or Molson Coors, which “reinforce[d] their existing volumes and market share while limiting the ability of 

new entrants to compete.”31 Additionally, The Beer Store operated a “Brewer Poster Program”32 that brewers could join 

to place large advertising posters inside The Beer Store, with 

relative positions selected by The Beer Store. Mountain Crest 

alleges that it paid to participate in this program, but The 

Beer Store discontinued the program summarily, without 

refund, to utilize the space for The Beer Store brand messaging. Last, Mountain Crest claims that The Beer Store’s listing 

fees, which are charged to only brewers who are not members of BRI, are discriminatory.33 The effect of these fees was 

apparently compounded by the alleged out-of-stocking 

scheme because “Defendants’ employees, who take Director 

roles at [BRI], decide amongst themselves” quotas that the 

brewer’s brands must meet for The Beer Store to retain inventory of that product “even if the reason it did not meet 

 

30 Id. ¶ 59. For a description of the typical layout of The Beer Store and 

the customer purchasing process, see supra note 9. 

31 Id. ¶ 247. 

32 Id. ¶ 169. 

33 Until 2015, BRI consisted only of Anheuser-Busch, Molson Coors, and 

Sleeman. Thus, all other brewers paid listing fees. 
No. 18-2327 17

the quota is because [BRI] did not use reasonable efforts to 

ensure sufficient inventory despite the paid-for listing.”34 

In 2014, the Ontario Premier asked the Premier’s Advisory Council on Government Assets to examine further ways 

to monetize government assets such as the LCBO. The 

Council determined that the LCBO should sell larger packages of beer and that BRI needed to “treat both owners and 

non-owners fairly, including with respect to the display of 

their products.”35 Around the same time, the Toronto Star 

published an article disclosing the previously non-public 

2000 Agreement, sparking constituent outrage and leading 

to a since-dismissed Canadian antitrust class action suit.36

BRI responded to this public criticism by offering ownership 

stakes to all Ontario brewers. Though small, these ownership stakes allowed Ontario brewers special privileges such 

as being exempt from paying listing fees. Mountain Crest 

alleges this plan was “in effect an import-substitution 

scheme ... giving Ontario-based brewers better access to 

[The Beer Store] while further damaging competition [from] 

Defendants’ U.S. based competitors, and with the intent of 

forestalling government mandated reforms [aimed] at ending Defendants’ ongoing restraints in trade.”37 

 

34 Id. ¶ 62. 

35 Id. ¶ 188 (emphasis omitted). 

36 See Hughes, 2018 CarswellOnt 3969, para. 247 (determining that the 

2000 Agreement did not violate Canada’s Competition Act because the 

conduct alleged was regulated conduct). 

37 R.49 ¶ 195. 
18 No. 18-2327 

At the same time, Anheuser-Busch, Molson Coors, BRI, 

the LCBO, and the government of Ontario entered into negotiations to replace the 2000 Agreement. During these negotiations, Anheuser-Busch and Molson Coors apparently 

sought to maintain BRI’s exclusive position as the only seller 

of large packages of beer. To this end, they allegedly threatened the Ontario government with NAFTA expropriation 

litigation if the government “took steps to undermine their 

cartel or system of restraints on U.S. exports to Ontario.”38

According to Mountain Crest, these threats “were planned 

and authorized by Defendants[’] respective U.S. offices in 

St. Louis and Denver” because “[n]o subsidiary entity of either Defendants located in Canada is capable of standing 

under NAFTA to bring an expropriation challenge, which is 

designed to offer a remedy solely for foreign entities, not 

domestic entities.”39 

The final 2015 Agreement continued the six-pack rule. It 

also included a provision wherein Anheuser-Busch and 

Molson Coors “waive any right to bring any claim or to seek 

or obtain any compensation or other remedy of any kind 

under international law or under any international trade 

agreements to which Canada is a Party, including 

[NAFTA].”40 The 2015 Agreement has a ten-year term and 

 

38 Id. ¶ 200. NAFTA permits investors to submit claims that a NAFTA 

party has breached investment-related obligations, including obligations 

to afford fair treatment to investments made by foreign parties. See

North American Free Trade Agreement, ch. 11 § B, Dec. 8–17, 1992, 107 

Stat. 2061, 32 I.L.M. 605. 

39 R.49 ¶ 200. 

40 Id. ¶ 207. 
No. 18-2327 19

provides for early termination upon either written agreement by both BRI and the government of Ontario, the bankruptcy of BRI, or material breach by either party. Further, it 

contains a provision permitting severance of terms “restricted, prohibited or unenforceable” in any jurisdiction.41 The 

government of Ontario, BRI, Labatt, Molson, and Sleeman 

Breweries, Ltd. (“Sleeman”)42 signed the 2015 Agreement. 

Along with the 2015 Agreement, the government of Ontario 

amended the Liquor Control Act. This amendment states 

that the LCBO “is deemed to have been directed, and Brewers Retail, Inc.[,] is deemed to have been authorized, to enter 

into the June 2000 framework in relation to the Crown’s or a 

Crown agent’s regulation and control of the sale of beer in 

Ontario.” R.S.O 1990, c. L.18 § 10(3). 

After the May 2018 elections, the Ontario PC party 

formed a new parliamentary majority in the Ontario government. As part of its campaign platform, it had said that it 

would “withdraw from the secret, backroom deal negotiated 

between the Liberals and foreign multinational beer companies.”43 After oral argument in this case, the new Ontario 

government proposed and enacted an amendment to the 

Liquor Control Act terminating the 2015 Agreement.44 The 

 

41 Id.

42 Sleeman was the other owner-member of BRI. See supra note 8. 

43 Appellant’s Br. 14. 

44 See Bill 115, Bringing Choice and Fairness to the People Act (Beverage Alcohol Retail Sales), 1st Sess., 42nd Leg., Ontario, 2019 (royal assent received 

June 6, 2019). 
20 No. 18-2327 

effective date of the termination is to be announced by the 

province’s Lieutenant Governor; this date has not yet been 

announced. In a May 27, 2019 letter, counsel for Labatt and 

Molson informed the Ontario Deputy Attorney General that 

the companies were reserving the right to commence litigation challenging the bill. No such litigation has yet commenced. 

B.

On August 17, 2017, Mountain Crest brought this action 

in the Western District of Wisconsin. It alleged violations of 

the Sherman Antitrust Act as well as a claim for unjust enrichment under Wisconsin state law. Specifically, under § 1 

of the Sherman Antitrust Act, 15 U.S.C. § 1, Mountain Crest 

alleges that Anheuser-Busch and Molson Coors engaged in a 

horizontal conspiracy to restrain competitors’ export of beer 

to Ontario by “leverag[ing] their market power to insist ... 

that LCBO not purchase 12s and 24s of beer from any breweries”45; “agree[ing] to impose on the LCBO a contractual obligation in the June 1st, 2000 agreement that the LCBO 

would not allow any brewery supplier to offer Pack-Up pricing”46; “conspir[ing] to rig [The Beer Store] in-store marketing schemes ... to reinforce their existing volumes and market share while limiting the ability of new entrants to compete”47; and “conspir[ing] to hold on to their restraints 

 

45 R.49 ¶ 243. 

46 Id. ¶ 244. 

47 Id. ¶ 247. 
No. 18-2327 21

against their U.S. domestic competitors’ ability to export to 

Ontario by launching their January 2015 Plan to extend certain cartel benefits to other Ontario brewers and threatening 

the government of Ontario with NAFTA litigation.”48 To 

support its claim under § 2 of the Sherman Antitrust Act, 15 

U.S.C. § 2, Mountain Crest contends that Anheuser-Busch 

and Molson Coors “conspired with each other to monopolize the sale of beer in Ontario, including the use of a group 

boycott, to restrain the LCBO’s ability to buy beer from other 

brewers.”49 They also “took overt and predatory acts in furtherance of their conspiracy by developing a series of evermore anticompetitive restraints on the LCBO’s ability to offer American brewers a competitive route into the Ontario 

beer market.”50 These overt and predatory acts included “rebuffing LCBO attempts to engage competitively” and “operat[ing] [The Beer Store] in a manner that constitutes an unlawful combination by discriminating against competing 

brewers” so that they cannot access “point-of-sale marketing 

programs in [The Beer Store].”51 

For these alleged violations of the Sherman Act, Mountain Crest sought a declaration that Anheuser-Busch and 

Molson Coors engaged in an “ongoing per se unlawful market allocation and price fixing conspiracies to restrain export 

 

48 Id. ¶ 243. 

49 Id. ¶ 253. 

50 Id. 

51 Id. 
22 No. 18-2327 

beer trade to Ontario.”52 Further, it asked for a declaration 

that Anheuser-Busch and Molson Coors sought to monopolize illegally the sale of beer in Ontario by restraining the 

ability of the LCBO to purchase beer from competing breweries and by creating anticompetitive conditions in The Beer 

Store. Mountain Crest also moved for injunctive relief ordering Anheuser-Busch and Molson Coors to terminate their 

participation in the 2015 Agreement and to restrain any further efforts aimed at preventing “any third party Canadian 

entity involved in the purchase and resale of beer” from 

purchasing competing beer.53 Additionally, Mountain Crest 

sought an order requiring Anheuser-Busch and Molson 

Coors to divest their ownership in BRI. Last, Mountain Crest 

requested treble damages for its lost exports to Ontario. 

Anheuser-Busch and Molson Coors moved to dismiss 

under Federal Rule of Civil Procedure 12(b)(6) on multiple 

grounds: (1) that the claims are barred by the act of state 

doctrine; (2) that the claims are barred under 

Noerr-Pennington; (3) that the Sherman Act does not reach 

the conduct at issue; (4) comity; (5) forum non conveniens; (6) 

that Mountain Crest did not state a plausible claim; and (7) 

that Mountain Crest did not plead facts to pierce the corporate veil of their subsidiaries to reach them. 

Relying on the act of state doctrine, the district court 

granted Anheuser-Busch’s and Molson Coors’ motion. It 

reasoned that “all of the conduct that allegedly violates the 

Sherman Act involves a public act by the Ontario govern-

 

52 Id. ¶ 257. 

53 Id. 
No. 18-2327 23

ment and [that] a ruling in Mountain Crest’s favor would 

require the court to determine that the Ontario government 

violated the Sherman Act as well.”54 The district court identified four such public acts that were “the official policy of the 

Ontario government”: (1) the 2000 Agreement between the 

LCBO (as a government agency) and BRI formalizing the sixpack rule; (2) the Ontario Minister of Consumer and Commercial Relations’ direction to the LCBO to sign the 2000 

Agreement; (3) the 2015 Liquor Control Act amendments 

approving of the 2000 Agreement; and (4) the 2015 Agreement between BRI and the government of Ontario reaffirming the six-pack rule.55 In its view, “there is no way to find 

that [Anheuser-Busch and Molson Coors] violated the Sherman Act without also finding that the Ontario government 

violated the Act by entering into the 2000 and 2015 agreements”56; ruling for Mountain Crest would “declare the Ontario government’s policy choices invalid and require the 

government to dismantle its policy.”57 Moreover, allegations 

of a “continued ... conspirac[y]” were of no significance be-

 

54 R.60 at 13. 

55 Id. at 13–14. The district court noted that the Ontario Superior Court’s 

decision in Hughes, 2018 CarswellOnt 3969, confirmed that these actions 

are public acts of the Ontario government and that the conduct did not 

violate Ontario law. R.60 at 16. 

56 Id. at 14. 

57 Id. at 18. The district court found there was “no way that it could remedy any alleged restraints on trade without enjoining the Ontario government” because “it is the practices at LCBO stores, not BRI stores, that 

Mountain Crest is challenging” and “[t]hus, no injunction against defendants could provide Mountain Crest any immediate relief.” Id. at 15. 
24 No. 18-2327 

cause, “[r]egardless of any conduct by [Anheuser-Busch and 

Molson Coors], the source of the harm is still the agreement 

with the government” and the government’s endorsement of 

the agreement in 2015.58 

The district court declined to determine whether there is 

a commercial activity exception to the act of state doctrine 

because, even if there were such an exception, it would not 

apply. The district court noted that the LCBO is a regulatory 

agency that did not carry on its business as a profit-maximizing commercial enterprise, and that the 2015 

amendment to the Liquor Control Act states the 2015 

Agreement relates to the “regulation and control of the sale 

of beer in Ontario.”59 The court also dismissed Mountain 

Crest’s argument that the act of state doctrine should not 

apply because it was possible for Anheuser-Busch and Molson Coors to comply with both Canadian and U.S. law before entering the 2000 Agreement and 2015 Agreement. It 

found that this argument was based on “international comity, not the act of state doctrine, which on its face does not 

require a private defendant to show that it was compelled to 

act in a certain way.”60 

 

58 Id. at 22. 

59 Id. at 20. 

60 Id. at 24 (citing Hartford Fire Ins. Co. v. California, 509 U.S. 764, 794–97 

(1993) (determining that international comity did not require a court to 

decline to adjudicate a Sherman Act claim involving foreign conduct 

where foreign law permitted the anticompetitive conduct but did not 

require it)). 
No. 18-2327 25

The district court did not consider Anheuser-Busch’s and 

Molson Coors’ other arguments. Because the federal claims 

were dismissed under the act of state doctrine, the district 

court also dismissed Mountain Crest’s state-law claim without prejudice. Mountain Crest timely appealed. 

II.

DISCUSSION

We now turn to the merits of the dispute before us.61 In 

addition to the briefs and arguments of the parties, the Department of Justice (“DOJ”) has submitted, at our invitation,62 an amicus brief advising that the district court properly applied the act of state doctrine and correctly dismissed 

Mountain Crest’s claims that the 2000 Agreement and 2015 

Agreement containing the six-pack rule were per se violations of the Sherman Antitrust Act, 15 U.S.C. § 1. The DOJ 

suggests, however, that Mountain Crest made allegations of 

anticompetitive behavior that must be considered independent of the six-pack rule. In the DOJ’s view, these allegations 

are not subject to the act of state doctrine and should not 

have been dismissed at this stage of the litigation. In re-

 

61 We review de novo a district court’s decision to dismiss a complaint 

for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). 

See Agnew v. Nat’l Collegiate Athletic Ass’n, 683 F.3d 328, 334 (7th Cir. 

2012). 

62 We invited the United States to submit an amicus brief addressing the 

applicability of the act of state doctrine. The Department of Justice accepted our invitation and submitted a brief on behalf of the United 

States. We thank the Department for having accepted our invitation. The 

parties were given an opportunity to respond to the Department’s submission and have submitted briefs stating their positions. 
26 No. 18-2327 

sponse, Mountain Crest claims that the DOJ misinterprets 

the act of state doctrine and that the doctrine is not applicable. It agrees, however, that, in any event, it set forth a conspiracy that is not wholly dependent on the acts of the Ontario government. It submits that these other acts, independent of the actions of the Ontario government, are sufficient to 

support its claim that Anheuser-Busch and Molson Coors 

violated Sections 1 and 2 of the Sherman Antitrust Act. Anheuser-Busch and Molson Coors counter that, although the 

DOJ correctly concludes that the act of state doctrine precludes consideration of Mountain Crest’s claims related to 

the 2000 Agreement and 2015 Agreement, the DOJ suggests, 

incorrectly, that we must vacate the remaining aspects of the 

district court’s judgment and remand to consider an independent conspiracy. We now evaluate these positions. We 

first discuss the contours of the act of state doctrine and then 

apply the doctrine to this case. 

A.

Unlike the political question doctrine or claims of sovereign immunity, the act of state doctrine is not a jurisdictional 

bar nor a theory of abstention; rather, it is a “substantive” 

doctrine considered “on the merits” of the case. Republic of 

Austria v. Altmann, 541 U.S. 677, 700 (2004).63 We have not 

 

63 In Republic of Austria v. Altmann, 541 U.S. 677 (2004), the Supreme 

Court, having resolved the question presented to it regarding jurisdiction under the Foreign Sovereign Immunities Act, said that the act of 

state doctrine “provides foreign states with a substantive defense on the 

merits.” Id. at 700 (emphasis added). The act of state doctrine, however, 

can be raised by the defendant as a defense or by the plaintiff as part of 

its case. See Restatement (Fourth) of Foreign Relations Law § 441 n.3 

(continued ... ) 
No. 18-2327 27

had occasion to address the doctrine in much detail but have 

described it as “a judicial rule that ‘generally forbids an 

American court to question the act of a foreign sovereign 

that is lawful under that sovereign’s laws.’” Nocula v. UGS 

Corp., 520 F.3d 719, 727 (7th Cir. 2008) (quoting F. & H.R. 

Farman-Farmaian Consulting Eng’rs Firm v. Harza Eng’g Co., 

882 F.2d 281, 283 (7th Cir. 1989)). There is a “presumption of 

validity accorded to the official public acts of a foreign country.” Id. at 728. 

The act of state doctrine first appeared in Underhill v. 

Hernandez, 168 U.S. 250 (1897), where the Supreme Court refused to determine whether a Venezuelan military commander, whose revolutionary government later was recognized by the United States, had detained illegally a United 

States citizen. Id. at 254. The Court said that: 

Every sovereign State is bound to respect 

the independence of every other sovereign 

State, and the courts of one country will not sit 

in judgment on the acts of the government of 

another done within its own territory. Redress 

of grievances by reason of such acts must be 

obtained through the means open to be availed 

of by sovereign powers as between themselves. 

 

( ... continued) 

(Am. Law Inst. 2018) (citing Banco Nacional de Cuba v. Sabbatino, 376 U.S. 

398 (1964)). 
28 No. 18-2327 

Id. at 252. Although some have regarded Underhill to be a 

sovereign immunity case,64 the Supreme Court has characterized the case as “[t]he classic American statement of the act 

of state doctrine,” Banco Nacional de Cuba v. Sabbatino, 376 

U.S. 398, 416 (1964), because “holding the defendant’s detention of the plaintiff to be tortious would have required denying legal effect” to the acts of the foreign official, W.S. Kirkpatrick & Co., Inc., v. Envtl. Tectonics Corp., Int’l, 493 U.S. 400, 

405 (1990). In early act of state cases following Underhill, the 

Court employed the doctrine to refrain from adjudicating 

property seizures by foreign governments.65 These early decisions viewed the act of state doctrine “as an expression of 

international law, resting upon ‘the highest considerations of 

international comity and expediency.’” W.S. Kirkpatrick, 493 

U.S. at 404 (quoting Oetjen v. Cent. Leather Co., 246 U.S. 297, 

303–04 (1918)). 

In Sabbatino, the Supreme Court recast the traditional 

doctrinal foundation of the act of state doctrine, deciding 

that it was not compelled by either “the inherent nature of 

sovereign authority” or by international law. 376 U.S. at 421–

22. Rather, the Court determined that there were “‘constitutional’ underpinnings” to the doctrine derived from our sys-

 

64 See Indus. Inv. Dev. Co. v. Mitsui & Co., Ltd., 594 F.2d 48, 51 n.6 (5th 

Cir. 1979); Restatement (Fourth) of Foreign Relations Law § 441 n.2 

(Am. Law Inst. 2018); John Harrison, The American Act of State Doctrine, 

47 Geo. J. Int’l L. 507, 526–33 (2016). 

65 See, e.g., Oetjen v. Cent. Leather Co., 246 U.S. 297, 303–04 (1918) (declining to examine property seizures because doing so would determine that 

the seizure within Mexico and by Mexico was legally ineffective); Ricaud 

v. Am. Metal Co., 246 U.S. 304, 310 (1918) (same). 
No. 18-2327 29

tem of separation of powers.66 Id. at 423. Noting “the competency of dissimilar institutions to make and implement particular kinds of decisions in the area of international relations,” the Court explained that the act of state doctrine “expresses the strong sense of the Judicial Branch that its engagement in the task of passing on the validity of foreign 

acts of state may hinder rather than further this country’s 

pursuit of goals both for itself and for the community of nations as a whole in the international sphere.” Id. at 424. Put 

another way, “juridical review of acts of state of a foreign 

power could embarrass the conduct of foreign relations by 

the political branches of the government,” and “frustrate the 

conduct of the Nation’s foreign policy.” First Nat’l City Bank 

v. Banco Nacional de Cuba, 406 U.S. 759, 765, 769 (1972). 

Because the act of state doctrine’s “continuing vitality 

depends on its capacity to reflect the proper distribution of 

functions between the judicial and political branches of the 

Government on matters bearing upon foreign affairs,” Sabbatino identified various factors for courts to consider before 

applying the doctrine. 376 U.S. at 427–28. These include “the 

degree of codification or consensus concerning a particular 

area of international law”; “the implications of an issue ... for our foreign relations”; and whether “the government which perpetrated the challenged act of state” is still in 

 

66 These constitutional underpinnings are structural considerations suggesting the usefulness of the act of state doctrine in certain situations. 

The Court was clear that “[t]he text of the Constitution does not require 

the act of state doctrine; it does not irrevocably remove from the judiciary the capacity to review the validity of foreign acts of the states.” Sabbatino, 376 U.S. at 423. 
30 No. 18-2327 

existence.67 Id. at 428. In Sabbatino, the Supreme Court decided that it would “not examine the validity of a taking of 

property within its own territory by a foreign sovereign 

government”—there, an expropriation decree by the Cuban 

government—“in the absence of a treaty or other unambiguous agreement regarding controlling legal principles, even if 

the complaint alleges the taking violates customary international law.”68 Id.

 

67 In full, the Court stated: 

It should be apparent that the greater the degree of codification 

or consensus concerning a particular area of international law, 

the more appropriate it is for the judiciary to render decisions 

regarding it, since the courts can then focus on the application of 

an agreed principle to circumstances of fact rather than on the 

sensitive task of establishing a principle not inconsistent with 

the national interest or with international justice. It is also evident that some aspects of international law touch much more 

sharply on national nerves than do others; the less important the 

implications of an issue are for our foreign relations, the weaker 

the justification for exclusivity in the political branches. The balance of relevant consideration may also be shifted if the government which perpetrated the challenged act of the state is no 

longer in existence ... for the political interest of this country 

may, as a result, be measurably altered. 

Sabbatino, 376 U.S. at 428. 

68 The result of Sabbatino—a bar against claims based on the invalidity of 

Cuban expropriations—has been nullified by Congress. See 22 U.S.C. 

§ 2370(e)(2) (the “Second Hickenlooper Amendment”). As evidenced by 

the Supreme Court’s discussion of Sabbatino in W.S. Kirkpatrick & Co., 

Inc., v. Envtl. Tectonics Corp., Int’l, 493 U.S. 400, 404–06, 409–10, the Hickenlooper Amendment’s specific application to cases involving Cuban 

(continued ... ) 
No. 18-2327 31

The Court’s most recent decision concerning the substantive application of the act of state doctrine provides particularly valuable guidance for us in resolving the present case. 

In W.S. Kirkpatrick, 493 U.S. 400, the Court was confronted 

with a situation where the plaintiffs, unsuccessful bidders 

for a Nigerian government construction contract, brought an 

action under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) alleging that the defendants had obtained the bid by bribing Nigerian officials. Nigerian law 

prohibited the payment and acceptance of bribes in connection with a government contract. Id. at 402. The district court 

held that the action was barred by the act of state doctrine 

because proving that the bribes were paid, as required by 

RICO, would necessarily involve an inquiry into the Nigerian government’s motivations, unlawful in that country, that 

might embarrass the Nigerian government or interfere with 

the execution of American foreign policy. Id. at 403. Relying 

on the submission of the State Department that the judicial 

inquiry would not embarrass the Executive Branch in the 

conduct of our country’s foreign relations, the Third Circuit 

reversed. Id. at 403–04. 

The Supreme Court affirmed, though on different 

grounds.69 It held that the act of state doctrine was inappli-

 

( ... continued) 

expropriations does not diminish Sabbatino’s import to the act of state 

doctrine generally. 

69 W.S. Kirkpatrick, 493 U.S. at 404–05, declined to determine whether 

there should be an exception to the act of state doctrine where the acts of 

state in question consist of commercial transactions, see Alfred Dunhill of 

London, Inc. v. Republic of Cuba, 425 U.S. 682, 695–706 (1976) (plurality 

(continued ... ) 
32 No. 18-2327 

cable to the case because neither the “relief sought” nor “the 

defense interposed” required a court to declare invalid the 

Nigerian government’s official act approving the contract. Id. 

at 405. The Court readily admitted that, in the course of adjudicating the RICO claim, a United States court might well 

make factual findings that would establish the illegality of 

the contract under Nigerian law. Id. at 406. But this was, in 

effect, no more than a collateral consequence of the court’s 

task in adjudicating the RICO action because the Nigerian 

contract’s “legality wa[s] simply not a question to be decided” in the suit. Id. That such judicial fact-finding might embarrass the Nigerian government was of no consequence. Id. at 

409. The Court was clear that the act of state doctrine is 

simply—and only—a rule of decision that requires an American court, in the process of deciding the case, to accept as 

valid the acts of another sovereign taken within that sovereign’s own jurisdiction. Id. Thus, the act of state doctrine only bars suit where “a court must decide—that is, when the 

outcome of the case turns upon—the effect of official action 

by a foreign sovereign.”70 Id. at 406. 

 

( ... continued) 

opinion), or where the Executive Branch asserts that applying the act of 

state doctrine in a particular instance would not impair its foreign policy 

interest, see First Nat’l City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 

768–70 (1972) (plurality opinion). 

70 The Supreme Court also acknowledged that there may be occasions 

where the policy considerations animating the act of state doctrine—

international comity, respect for foreign nations, and avoiding interference with the Executive Branch in the conduct of its foreign relations—

would justify a court’s declining to apply the doctrine despite its “technical availability.” W.S. Kirkpatrick, 493 U.S. at 409. The Court in W.S. 

(continued ... ) 
No. 18-2327 33

From these holdings of the Supreme Court, we can plot 

the course that we must take in this case. First, we must determine whether the six-pack rule is attributable to the government of Ontario for the purposes of the act of state doctrine. Second, we must determine whether a decision in 

Mountain Crest’s favor would invalidate those acts. 

B.

The burden of establishing the applicability of the act of 

state doctrine rests on the party invoking the doctrine. See 

Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 

694 (1976). In applying the analytical framework established 

by the Supreme Court’s cases, we first examine whether the 

2000 Agreement and 2015 Agreement constitute official acts 

for the purposes of the act of state doctrine. 

Mountain Crest conceded, in its reply brief and at oral 

argument, that both agreements were official acts of the 

Province of Ontario for the purposes of the act of state doc-

 

( ... continued) 

Kirkpatrick had no occasion to elaborate further on such situations nor do 

we today. We note, however, that the change of majority party of the 

Ontario Legislative Assembly is hardly equivalent to the change in government alluded to in Sabbatino. See, e.g., Bigio v. Coca-Cola Co., 239 F.3d 

440, 453 (2d Cir. 2000) (declining to apply the act of state doctrine where 

the act in question occurred thirty-four years prior to the suit and under 

the government of a dictator who had been dead for thirty years); Republic of the Philippines v. Marcos, 862 F.2d 1355, 1360–61 (9th Cir. 1988) (en 

banc) (declining to apply the act of state doctrine where the government 

had been overthrown). 
34 No. 18-2327 

trine.71 This concession is well-founded. The 2015 Amendment to the Liquor Control Act ratifying the 2000 Agreement 

is an official legislative enactment of the Ontario government. Moreover, the LCBO, as the wholly owned Crown 

agency responsible for the retail sale of alcohol in the province, “is required to abide by the policy decisions and directives of the Government,” and “[t]he government exercised 

considerable control over the LCBO,” in which “[c]omplex, 

high-level decisions were made from time-to-time by senior 

Government officials.”72 Hughes, 2018 CarswellOnt 3969, para. 82, 84. The LCBO’s actions entering the two agreements 

regulating the sale of alcohol within Ontario are official acts 

 

71 Appellant’s Reply Br. 4 (“Mountain Crest is not challenging their official status. Just as Kirkpatrick did not need to reach arguments about the 

official status of the Nigerian government contract, the official status of 

four acts in the present case is irrelevant because their legal effectiveness 

is not being challenged.”); Oral Argument at 15:33–16:00 (“We’re not 

resting on the commercial exception. We don’t, we don’t need it. ... We 

can accept them all as valid. None of the four acts are being declared ... 

null and void. We are not seeking any kind of declaratory relief ... that 

would seek to deny them legal effect. So ... we are happy to accept that 

they are all official acts.”). 

72 We note that the Canadian courts adjudicating antitrust claims arising 

from the 2000 Agreement under Canadian law dismissed those claims 

pursuant to Canada’s “Regulated Conduct Defence.” Hughes, 2018 CarswellOnt 3969, para. 237–47; see also id. at para. 240 (“The 2000 Beer 

Framework Agreement was in the wheelhouse ... of the powers and 

rights conferred on the LCBO and Brewers Retail under the Liquor Control Act.”). At its most basic level, the Regulated Conduct Defence provides that “conduct authorized by valid provincial or federal legislation ... deemed to be in the public interest ... cannot constitute an ‘undue’ limit on competition.” Id. at para. 221. 
No. 18-2327 35

of the Ontario government.73 Finally, with respect to the 2015 

Agreement, the government of Ontario is an actual party to 

that agreement. Therefore, the acts in question are official 

acts of the Ontario government.

The district court assumed, as do the parties, that the “act 

of state doctrine applies the same way to a provincial government as to a national government.”74 This assumption is 

certainly correct in the circumstances presented here because 

a national statute authorizes the acts of the LCBO.75 We also 

note that most other courts that have confronted this issue 

have determined that the act of state doctrine applies to acts 

of sub-national governments.76 Moreover, in construing the 

 

73 Cf. Sea Breeze Salt, Inc. v. Mitsubishi Corp., 899 F.3d 1064, 1069 (9th Cir. 

2018) (determining that the acts of a corporation that is majority-owned 

and controlled by the Mexican government were official, sovereign 

acts). 

74 R.60 at 13 n.5. 

75 R.S.C. 1985, c. I-3, § 3 (banning, with limited exceptions, any interprovincial or international trade in alcoholic beverages other than that carried about by the provincial liquor boards); see also, Canadian Breweries, 

[1960] O.R. 601, para. 39 (noting that “each Province has jurisdiction to 

regulate and control the sale of liquor within its boundaries and to fix 

the prices at which, and the conditions under which liquor may be 

sold”). 

76 See In re Fresh & Process Potatoes Antitrust Litigation, 834 F. Supp. 2d 

1141, 1180 (D. Idaho 2011) (cooperative of Canadian provincial governments acted in sovereign capacity for purposes of act of state doctrine); 

Occidental Petroleum Corp v. Buttes Gas & Oil Co., 331 F. Supp. 92, 113 

(C.D. Cal. 1971) (sheikdoms of United Arab Emirates acted in sovereign 

capacity); Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, 293 F. Supp. 892, 

(continued ... ) 
36 No. 18-2327 

act of state doctrine and defining its terms, courts have 

sometimes looked to the Foreign Sovereign Immunity Act77

; 

that statute defines “foreign state” to include “a political 

subdivision of a foreign state.” 28 U.S.C. § 1603(a). Finally, 

turning to the policy concerns animating the act of state doctrine, judicial questioning of the acts of a sub-national government could interfere with the foreign relations efforts of 

our political branches just as much as questioning the acts of 

a national government could. Therefore, the first prong of 

the act of state doctrine analysis is met: the agreements establishing the six-pack rule are acts of state for the purposes 

of the doctrine. 

Our next task is to examine whether, in adjudicating this 

case, the court “must decide ... the effect of official action by a 

foreign sovereign.” W.S. Kirkpatrick, 493 U.S. at 406. In short, 

we ask whether the Ontario legislation giving the six-pack 

rule the force and effect of law determines the “outcome of 

the case.” Id. Put another way, does the “relief sought or the 

defense interposed” by Mountain Crest “require[] a court in 

the United States to declare invalid the official act[s]” of the 

 

( ... continued) 

910 (S.D.N.Y. 1968) (act of state doctrine applies to member states of 

West Germany), aff’d 433 F.2d 686 (2d Cir. 1970). But see Am. Indus. Contracting, Inc. v. Johns-Manville Corp., 326 F. Supp. 879, 881 (W.D. Pa. 1971) 

(determining that “[t]he province of Quebec is not a State within the 

meanings of the doctrines of international law” because “[t]hese doctrines only apply to nations in the international sense such as the United 

States and Canada”). 

77 See, e.g., World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 

1154, 1165 (D.C. Cir. 2002). 
No. 18-2327 37

Ontario government, and thus render them “ineffective as ‘a 

rule of decision for the courts of this country’”? Id. at 405 

(quoting Ricaud v. Am. Metal Co., 246 U.S. 304, 310 (1918)). To 

answer that question, we must return to the Second Amended Complaint and determine precisely the nature of Mountain Crest’s allegations. 

As the case comes to us, it is clear, despite the operative 

complaint’s prolixity and, at times, unartful language, that 

Mountain Crest is seeking, through injunctive and declaratory relief, an adjudication that the six-pack rule established by 

the Ontario government is inoperative.78 First, it claims that 

the six-pack rule, contained in agreements entered into by 

the Ontario government and approved of in legislation, violates Section 1 of the Sherman Antitrust Act because it constitutes a price-fixing and market allocation arrangement. 

These agreements are per se unlawful; the mere existence of 

such an arrangement violates the statute. Leegin Creative 

Leather Prods., Inc., v. PSKS, Inc., 551 U.S. 877, 886 (2007). 

Moreover, the existence of a per se unlawful agreement “justifies [its] facial invalidation.”79 Arizona v. Maricopa Cty. Med. 

 

78 Mountain Crest’s claims premised directly on the six-pack rule are 

further complicated by the recent action of the Ontario government repudiating the 2015 Agreement. See Bill 115, Bringing Choice and Fairness 

to the People Act (Beverage Alcohol Retail Sales), 1st Sess., 42nd Leg., Ontario, 2019 (royal assent received June 6, 2019). This matter has not been 

argued to us, and we believe that the most expeditious manner of evaluating this development is to permit the district court to address it on 

remand. 

79 The operation of the Sherman Antitrust Act here differs from the operation of RICO in W.S. Kirkpatrick. Determining an agreement is unlaw-

(continued ... ) 
38 No. 18-2327 

Soc’y, 457 U.S. 332, 351 (1982). Therefore, to the extent that 

Mountain Crest attacks the six-pack rule on this ground, the 

act of state doctrine is, as our colleague in the district court 

recognized, applicable. 

Mountain Crest also asks for declaratory and injunctive 

relief precluding the six-pack rule established by the Ontario 

government because it violated Section 2 of the Sherman Antitrust Act. This section makes it illegal to “monopolize, or 

attempt to monopolize, or combine or conspire with any 

person or persons, to monopolize any part of the trade or 

commerce among the several States, or with foreign nations.” 15 U.S.C. § 2. To the extent that Mountain Crest seeks 

relief under this section predicated solely on the six-pack 

rule, the act of state doctrine clearly precludes the action. 

Adjudication of liability on this basis would have the effect 

of invalidating the Ontario government’s choice to extend 

monopoly benefits to Anheuser-Busch and Molson Coors. 

Nevertheless, Mountain Crest’s operative complaint, fairly read, is not limited to the theories of recovery that we 

have just addressed. The Second Amended Complaint also 

sets out allegations that Anheuser-Busch and Molson Coors, 

acting through their officers and employees, violated the 

same provisions of the Sherman Act by conspiring to bring 

about the Ontario government’s approval of the six-pack 

rule. These allegations do not implicate the act of state doc-

 

( ... continued) 

ful under 15 U.S.C. § 1 necessarily invalidates that agreement; determining an agreement was procured by bribery under RICO merely penalizes the individual undertaking the racketeering activity. See 18 U.S.C. 

§§ 1963, 1964. 
No. 18-2327 39

trine. W.S. Kirkpatrick, 493 U.S. at 407, indicated that, where 

the plaintiff is “not trying to undo or disregard governmental action,” it may “obtain damages from [the] private parties 

that procured it” illegally. In reaching its conclusion, the 

Court noted its earlier decision in United States v. Sisal Sales 

Corp., 274 U.S. 268 (1927). W.S. Kirkpatrick, 493 U.S. at 407. In 

Sisal Sales, 274 U.S. at 276, the Court did not bar an antitrust 

complaint where defendants took “deliberate acts” to 

“br[ing] about forbidden results” simply because the anticompetitive conspiracy was aided by discriminatory legislation obtained from the Mexican government by the defendants. Mountain Crest sets forth facts that, if accepted by a 

trier of fact, might demonstrate that the defendants took 

concerted action to bring about the Ontario legislation. 

Holding Anheuser-Busch and Molson Coors liable for their 

antecedent and allegedly deliberate acts to bring about the 

six-pack rule and requiring them to pay damages to Mountain Crest would not, on its face, invalidate Ontario’s chosen 

regulatory scheme. 

The district court did not consider the Second Amended 

Complaint from this perspective, and, upon examination of 

the record, we cannot say that Mountain Crest has waived 

any reliance on these allegations. We are aware that such allegations raise significant questions of causality. We also are 

aware that there may be other possible defenses, including 

but not limited to the applicability of the Noerr-Pennington80

 

80 E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 

(1961); United Mine Workers v. Pennington, 381 U.S. 657 (1965). 
40 No. 18-2327 

doctrine to the lobbying of foreign governments,81 that must 

be explored. These matters never have been addressed by 

the district court and have been addressed in only a tangential way during this appeal. If the parties wish, they may 

raise these matters in the district court. 

The Second Amended Complaint also addresses another 

area that, so far, has not come under the district court’s scrutiny. It plainly sets forth other activities of Anheuser-Busch 

and Molson Coors, perhaps independent of the six-pack 

rule, that, in Mountain Crest’s view, implicate the strictures 

of the Sherman Antitrust Act. Mountain Crest has alleged a 

pattern of other marketing and distribution practices that it 

claims manipulated The Beer Store’s internal sales approach 

to disfavor American products, including Mountain Crest’s 

product. These practices, according to the operative complaint, prevented Mountain Crest from achieving the economies of scale necessary to make its participation in the On-

 

81 Compare Coastal Sales Mktg., Inc. v. Hunt, 694 F.2d 1358, 1364–67 (5th 

Cir. 1983) (extending Noerr-Pennington to petitioning of foreign governments because “Noerr was based on a construction of the Sherman Act” 

and there are “no reasons why acts that are legal and protected if done in 

the United States should in a United States court become evidence of 

illegal conduct because performed abroad”), and Carpet Grp. Int’l v. Oriental Rug Importers Ass’n, Inc., 256 F. Supp. 2d 249, 266 (D.N.J. 2003) 

(agreeing with the Fifth Circuit), with Occidental Petroleum Corp. v. Buttes 

Gas & Oil Co., 331 F. Supp. 92, 107–08 (C.D. Cal. 1971) (holding that 

Noerr-Pennington does not extend to petitioning of foreign governments 

because the doctrine was based on “avoid[ing] a construction of the antitrust laws that might trespass upon the First Amendment right of petition” and that concept “carries limited if indeed any applicability to the 

petitioning of foreign governments”), aff’d, 461 F.2d 1261 (9th Cir. 1972). 
No. 18-2327 41

tario market profitable. We cannot discern any basis for saying that Mountain Crest has waived these claims. Accordingly, on remand, the district court should address these 

claims in due course. 

Conclusion 

For the reasons set forth in this opinion, we affirm in part 

and vacate in part the judgment of the district court and remand the case for proceedings consistent with this opinion. 

Mountain Crest may recover the costs of this appeal. 

AFFIRMED in part, VACATED and REMANDED in part