Opinion ID: 428544
Heading Depth: 2
Heading Rank: 1

Heading: Treaty Issue

Text: 10 Sharp Electronics Corporation [SEC] is the only defendant to argue that the 1953 Treaty with Japan bars plaintiffs' claims under the 1916 Act. SEC is a New York corporation with its principal place of business in New Jersey. It is a wholly owned subsidiary of another defendant, Sharp Corporation, a Japanese corporation. 11 SEC imports CEPs from Japan and resells them in this country. It sells no CEPs in Japan. SEC argues that the Treaty bars application of the 1916 Act to its domestic resale pricing of Japanese-made CEPs and maintains that all of plaintiffs' dumping claims against it should be dismissed. 12 SEC relies on Article XVI of the Treaty, which provides as follows: 13 Products of either Party [Japan or the United States] shall be accorded, within the territories of the other Party, national treatment ... in all matters affecting internal taxation, sale, distribution, storage and use. 14 SEC argues that application of the 1916 Act to Japanese-made CEPs offered for resale in the United States discriminates against those goods in violation of Article XVI of the Treaty. The district court rejected this argument and held that the Treaty does not bar plaintiffs' dumping claims against SEC. We agree with that holding for several reasons. 15 First, Article XVI protects imported goods from discriminatory treatment only after the importation process has been completed and the goods are within the territory of the other Party. Plaintiffs claim that SEC has violated the 1916 Act by importing CEPs into the United States at prices substantially lower than the prices at which comparable CEPs were sold in Japan. To the extent that the 1916 Act regulates this import activity, it does not discriminate against Japanese products that are within the territory of the United States. As SEC concedes, the Treaty does not restrict the rights of the United States to regulate imports. 16 Second, Article XVI prohibits discriminatory treatment only in matters affecting internal taxation, sale, distribution, storage and use. The Treaty does not restrict the rights of the United States to regulate unfair competition from abroad. Article XIV(4) of the Treaty provides that [e]ither Party may impose prohibitions or restrictions ... in the interest of preventing deceptive or unfair practices. The 1916 Act prohibits anticompetitive price discrimination between products imported or sold in the United States and comparable products sold in the exporting country. As a restriction on unfair trade practices, the 1916 Act is clearly a regulation allowed by the Treaty. 17 Third, Article XVI does not require that imported and domestic goods be given identical treatment. It only requires that imported goods be accorded national treatment. Article XXII(1) defines that term to mean treatment accorded within the territories of a Party upon terms no less favorable than the treatment accorded therein, in like situations, to ... products ... of such Party. 18 Section 2(a) of the Robinson-Patman Act, 15 U.S.C. Sec. 13(a) (1976), prohibits anticompetitive price discrimination between two products of like grade and quality where both sales occur in the United States. Zenith Corporation v. Matsushita Electric Industrial Company, 402 F.Supp. 244, 248-49 (E.D.Pa.1975). The 1916 Act likewise prohibits anticompetitive price discrimination between two comparable products where an imported product is sold at a lower price in the United States than in the exporting country. We do not believe that application of the 1916 Act to goods imported into or sold in the United States violates the mandate of Article XVI to accord national treatment to Japanese products sold in the United States. 19 For the reasons stated above, we hold that application of the 1916 Act to Japanese-made CEPs sold in the United States does not violate Article XVI of the Treaty. 3 Thus, we will affirm the partial summary judgment order of the district court insofar as it holds that the Treaty does not bar plaintiffs' dumping claims against SEC.