Opinion ID: 495230
Heading Depth: 2
Heading Rank: 1

Heading: The Foreign Antitrust Improvements Act

Text: 47 To understand Congress' purpose in this area, it is necessary to examine the 1982 Act. Section 402 of the statute provides that United States antitrust laws:shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless-- 48 (1) such conduct has a direct, substantial, and reasonably foreseeable effect-- 49 (A) on trade or commerce which is nor trade or commerce with foreign nations, or on import trade or import commerce with foreign nations; or (B) on export trade or export commerce with foreign nations, of a person engaged in such trade or commerce in the United States; ... 50 15 U.S.C. Sec. 6a (1982). 51 Under this statute Congress excluded from the coverage of U.S. antitrust laws conduct involving export commerce and purely foreign transactions unless such conduct has a direct, substantial, and reasonably foreseeable effect on domestic commerce, import commerce or the export trade or commerce of a person engaged in such trade or commerce in the United States. Congress aimed to clarify existing American law, and when defining the Act's scope used the phrase commerce ... with foreign nations, which is precisely the same terminology as that used in Sec. 1 of the Sherman Act. 15 U.S.C. Sec. 1 (1982). In that context, the phrase has consistently been construed to cover international transportation cases. See, e.g., Thomsen v. Cayser, 243 U.S. 66, 88, 37 S.Ct. 353, 360, 61 L.Ed. 597 (1917); United States v. Pacific & Arctic Ry. & Navig. Co., 228 U.S. 87, 105-06, 33 S.Ct. 443, 448, 57 L.Ed. 742 (1913); Joseph Muller Corp., 451 F.2d at 729. Thus, the Act extends to international shipping of the sort involved here. 52 To say that the Act applies to foreign shipping cases is not to say that it is easily applied. For though shipping goods from the United States is clearly foreign commerce, it does not fall neatly into those categories set out in the Foreign Antitrust Improvements Act. O.N.E. argues that the Act does not deprive the courts of jurisdiction over this case because the conduct alleged falls under the exception for conduct having the required effect on export trade or export commerce ... of a person engaged in such trade or commerce in the United States. 15 U.S.C. Sec. 6a(1)(B). O.N.E. assumes that the service of transporting goods from the U.S. is itself export commerce and offers its various ties with the U.S.--for example, its U.S. parent and its U.S. derived income--as proof that it is a person engaged in ... [export] commerce in the United States. Appellees counter that the transactions do not fall under (1)(B) because as a non-U.S. corporation O.N.E. lacks the indicia of a person engaged in ... [export] commerce in the United States. Thus, appellees continue, the Act deprives the courts of jurisdiction over this case. 53 Both of these contentions are incorrect in several respects. First, the commerce involved here is import rather than export commerce; U.S. corporations import from foreign flag lines the service of shipping their goods from the United States to Colombia. See Pacific Seafarers, Inc. v. Pacific Far East Lines, 404 F.2d 804, 813 (D.C.Cir.1968), cert. denied, 393 U.S. 1093, 89 S.Ct. 872, 21 L.Ed.2d 784 (1969) ([M]aritime nations ... providing transportation services ... are engaged ... in the 'export' of shipping services.). The conclusion that the transportation at issue here is import rather than export commerce is consistent with the Act's legislative history. The drafters of the Act had as their primary concern preserv[ing] antitrust protections in the domestic marketplace. H.R.Rep. No. 686, 97th Cong., 2d Sess. 10, reprinted in 1982 U.S. Code Cong. & Admin. News 2431, 2487, 2495 (House Report). The record amply demonstrates that a market exists among United States corporations for the service of shipping LBC to Latin America. Viewed as an import, the service of transporting goods from the U.S. is not excluded by the Act from the coverage of American antitrust laws. The Act explicitly states that it does not apply to import trade or import commerce. 15 U.S.C. Sec. 6a. 54 Second, even if the shipment of LBC from the United States is export commerce, appellees' alleged conduct is still subject to U.S. antitrust laws because it falls under the Act's exception 1(B) for conduct having a direct, substantial, and reasonably foreseeable effect ... on export trade ... of a person engaged in such ... commerce in the United States. The legislative history defines a person engaged in [export] trade or commerce in the United States as a person doing business in the United States. House Report, supra, at 10, 12, U.S.Code Cong. & Admin.News 1982, pp. 2495, 2497. Because Congress strongly emphasized that the Act was intended to preserve antitrust protection for the domestic market, see House Report, supra, at 9, 10, 11, U.S.Code Cong. & Admin.News 1982, pp. 2494-2496, and because O.N.E. participates in the domestic market for shipping services, it satisfies this doing business requirement. 55 Finally, federal courts have long taken jurisdiction over shipping services between the United States and abroad. See, e.g., Thomsen, 243 U.S. at 88, 37 S.Ct. at 360; Pacific & Arctic Ry. & Navig. Co., 228 U.S. at 101, 33 S.Ct. at 446. Thus, the language of the Act and its legislative history makes it obvious that Congress did not aim to deprive federal courts of jurisdiction over suits like the instant one. 56