Opinion ID: 495230
Heading Depth: 3
Heading Rank: 2

Heading: Controlling Supreme Court Precedents

Text: 62 In United States v. Sisal Sales Corp., 274 U.S. 268, 47 S.Ct. 592, 71 L.Ed. 1042 (1927), the defendants, Comision Exportadora de Yucatan, a public agency that purchased sisal from Mexican producers, and Sisal Sales Corp., its exclusive sales agent, had utilized the discriminatory legislation of the Yucatan to monopolize the importation and sale of sisal into the United States. The legislation imposed special taxes designed to drive other purchasers out of the sisal market, leaving Comision Exportadora as the sole sisal purchaser in the Yucatan. The Supreme Court, in finding jurisdiction over this conspiracy, observed: True, the conspirators were aided by discriminating legislation, but by their own deliberate acts, here and elsewhere, they brought about forbidden results within the United States. They are within the jurisdiction of our courts and may be punished for offenses against our laws. Id. at 276, 47 S.Ct. at 594. 63 More recently, in Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 82 S.Ct. 1404, 8 L.Ed.2d 777 (1962), the Supreme Court again found jurisdiction despite the role of another nation's discriminatory legislation in an alleged restraint of trade. In that case, one of the defendants, Electro Metallurgical Company of Canada (Electro Met), had been appointed by the Canadian government as the exclusive wartime purchasing agent for all of the vanadium required by Canadian industry. Plaintiff Continental Ore alleged that Electro Met, at the behest of its American parent, Union Carbide, used its position to exclude Continental Ore from the Canadian vanadium market. In finding jurisdiction, the Court relied on Sisal Sales stating that jurisdiction may be found even though the defendants' control of ... production was aided by discriminatory legislation of the foreign country which established an official agency as the sole buyer of the product.... Id. at 705, 82 S.Ct. at 1414. 64 The Supreme Court went on to note that [t]here is nothing to indicate that [Canadian] law in any way compelled discriminatory purchasing, and it is well settled that acts which are in themselves legal lose that character when they become constituent elements of an unlawful scheme. Id. at 707, 82 S.Ct. at 1414. It also stated that there is no indication that ... any ... official within the structure of the Canadian Government approved or would have approved of joint efforts to monopolize the production and sale of vanadium or directed that purchases from Continental be stopped. Id. at 706, 82 S.Ct. at 1414.3. Application of Supreme Court Precedents 65 The facts before us parallel those of Sisal Sales and Continental. In both cases, the alleged restraint of trade was possible only because of the discriminatory laws of a foreign sovereign. Also, in all three cases, one of the defendants--here Flota--was found to be an agent of that sovereign. In one respect, the instant case is even more conducive to an assertion of jurisdiction than either Sisal Sales or Continental. In those cases the governments ceded a greater degree of control over the commerce in question to the defendants, while in the instant case, in contrast, Flota and its associates were not singled out for special treatment, but received preferences along with all other Colombian flag lines. Further, only 50 percent of the trade involved was set aside in the case at bar while the entire vanadium trade was restricted in Continental. For these reasons, this case falls squarely within the holdings of Continental and Sisal Sales and should not be dismissed on comity grounds. 66 In one respect this case might arguably be distinguishable from Continental. In that case, as noted, the Supreme Court observed that there was no evidence that Canada had approved the effort to monopolize the vanadium trade. Here, the Colombian government has expressed approval in two ways which must be considered. Colombia initially approved the agreements creating the association among the appellees, and it sent telexes to the United States State Department urging it to intervene on the appellees' behalf before the FMC. 67 Neither action should cause a dismissal on account of comity. The approval of the agreements are not of the type contemplated by Continental. In Continental, the Canadian government clearly approved of the power defendants had in the vanadium market because it had granted them that power. But the government did not express its consent to their attempt to monopolize the market. Similarly, here the initial assent by the Colombian government may have given appellees a degree of power over LBC commerce, but there is no indication that in approving the agreements Colombia considered their antitrust implications. 68 Nor do the telexes compel a different conclusion. Although these telexes may demonstrate some sort of official blessing of the anticompetitive effects of appellees' conduct--since they were sent after U.S. corporations had filed objections with the FMC--they should not be considered when determining jurisdiction. As Kingman Brewster, the commentator who devised the doctrine of judicial comity balancing, observed: reliance on case-specific foreign policy concerns would create problems of fairness and consistency.... Disparities in rulings would ... reward foreign governments that bellow at every threat of antitrust enforcement.... 1 J. Atwood & K. Brewster, Antitrust and American Business Abroad Sec. 6.18, at 175-76 (2d ed. 1981). Cf. United States v. The Watchmakers of Switzerland Information Center, Inc., 1963 Trade Cas. (CCH) p 70,600, at 77,456-57 (S.D.N.Y.1962) (government approval of private activity does not deprive court of jurisdiction). Further, a consideration of these telexes in determining jurisdiction would unduly involve courts in foreign policy concerns. It is especially significant here that the United States State Department--despite a request to do so from the Colombian government--chose not to intervene on appellees' behalf before the FMC. Hence, the majority's notions of comity towards Colombia should not effectively reverse the settled holdings of the United States Supreme Court.