Competition and the State - University of...
Transcript of Competition and the State - University of...
Competition and the State Edited by Thomas K. Cheng, loannis Lianos, and D. Daniel Sokol
STANFORD LAW BOOKS
An Imprint of Stanford University Press
Stanford, California
Contents
Contributors vii
Introduction 1
PART I: CONCEPTUALIZING AND RE-CONCEPTUALIZING
THE INTERACTION BETWEEN COMPETITION
LAW AND GOVERNMENT ACTIVITIES
1. Privatization and Competition Policy (Alexander Volokh) 15
2. Toward a Bureaucracy-Centered Theory of the Interaction
between Competition Law and State Activities (Ioannis Lianos) 32
3. Competition Issues and Private Infrastructure Investment through
Public-Private Partnerships (R. Richard Geddes) 56
PART II: IS THERE A NEED FOR A SPECIFIC
SUBSTANTIVE LEGAL FRAMEWORK IN DOMESTIC
AND INTERNATIONAL COMPETITION LAW?
4. State-Owned Enterprises versus the State: Lessons from
Trade Law (Wentong Zheng) 75
5. What Drives Merger Control? How Government Sets the
Rules and Play (D. Daniel Sokol) 89
6. Antitrust Enforcement and Regulation: Different Standards
but Incentive Coherent? (Alberto Heimler) 108
7. International Law and Competition Policy (Paul B. Stephan) 121
Chapter 7
International Law and Competition Policy
Paul B. Stephan
States approach the regulation of international commerce with mixed mo
tives. In a static world motivated exclusively by material interests, every state
would like its producers to get monopoly rents from their foreign sales and its
consumers to benefit from full competition. To the extent an industry has the
characteristics of a natural monopoly, due either to positive returns to scale or
declining marginal costs, each state would like to host the producer. But in a
dynamic world where states can respond to the actions of others, it becomes
much more difficult either to predict or prescribe the pattern of international
competition regulation that will or should emerge. 1
The range of possible dynamic responses is great. Only a few narrow inter
national commitments limit what states can do. 2 A pro-competition importing
state can go after foreign producers who collude in restricting sales in its im
port market to raise prices. Alternatively, a state might try to open up foreign
export markets for its producers. In either case, it may impose sanctions on
foreign firms to further its policy. But what happens if the foreign firms act in
coordination with, or under the control of, a foreign state?
As this question indicates, competing competition policies can lead to in
ternational conflict. It is the job of public international law to address such
sources of tension. Several general international law doctrines apply to com
petition law conflicts. None, however, has great clarity or definiteness. There
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122 Legal Framework in Domestic and International Competition Law
remains plenty of room to link arguments for application of these doctrines to claims about optimal international competition policy.
This chapter explores the concepts of territoriality, sovereign immunity, and act of state as used in international law and applied to competition law conflicts. It focuses on U.S. practice, because the United States has been the principal exporter of competition policy and thus has generated the most international conflicts. It argues that current trends in U.S. law bolster these traditional international law doctrines and thus reduce the likelihood of disagreements over competition policy. Whether these developments will bring us closer to an optimal international competition regime is more debatable.
I. Territoriality and National Competition Law Traditionally, international law stood on two foundations: territoriality and sovereign consent. Both concepts presupposed states as indispensable lawmakers. States function as the ultimate source of authority over particular territory. Endowed with state authority, sovereigns may consent to obligations through agreements with other states. Two hundred years ago, Chief Justice Marshall provided the canonical statement of the doctrine:
The jurisdiction of the nation within its own territory is necessarily exclusive and absolute. It is susceptible of no limitation not imposed by itself. Any restriction upon it, deriving validity from an external source, would imply a diminution of its sovereignty to the extent of the restriction, and an investment of that sovereignty to the same extent in that power which could impose such restriction.
All exceptions, therefore, to the full and complete power of a nation within its own territories, must be traced up to the consent of the nation itself. They can flow from no other legitimate source.3
Accordingly, the traditional conception of international law allocated authority to sovereigns on the basis of territory and then facilitated reallocations of authority that flow from agreements among sovereigns. These agreements could be express, as with treaties, or implied, as with customary international law. The concept of" exclusive and absolute" sovereign authority over its territory itself rested on customary law, although Article 2(1) of the UN Charter ratifies the concept.4
Over the last 30 years, advocates and scholars have challenged both of these foundations. Territoriality, they argue, has become obsolete in an increasingly
International Law and Competition Policy 123
interconnected world. 5 State consent similarly has become less important as
coalitions of interested persons take shape across state borders to formulate and
implement international norms. 6 These jurists envision a new international law
that focuses on human interests without mediation by states or the territory
that they occupy or control. 7
This vision, however, outstrips reality. States remain indispensable to the
formation of international law, and the mapping of state authority onto state
territory remains central to the international legal system. Recent evidence of
the enduring importance of territoriality can be found in the International
Court of Justice's decision in Jurisdictional Immunities ~f the State.8 The Court
considered a claim that the traditional immunity enjoyed by one sovereign in
another's courts must give way when a state is responsible for war crimes. The
prohibition of fundamental norms of international law, the argument went,
rests on a higher authority than state consent and thus requires the suspension
of the normal privileges that one sovereign accords another.
The Court categorically rejected this argument. It instead ruled that excep
tions to immunity always must rest on consent, either express or implied by
custom. No such exception exists for even grave breaches of that part of inter
national law that protects individual, rather than state, interests. 9
Of course, just because the International Court of Justice believes this to
be true, it does not make it a fact. International law lacks an authoritative
arbiter. But it remains clear that the significance of states and their borders
still matters in the international system, changes in the structure of interna
tional communication, transportation, and the structure of the world economy
notwithstanding.
What does all this mean for competition policy? A wooden application of
the principles of territoriality and sovereign consent would seem to lead to an
absolute prohibition of any regulation by a state of conduct taking place on
another sovereign's territory, absent some agreement to the contrary. Indeed,
the United States once embraced this position.10 The Supreme Court, however,
rethought the issue long ago. By the 1920s it approved sanctions imposed on
an international price-fixing scheme involving foreign participants because a
key meeting of the participants took place in the United States.11 At the end
ofWorld War II, the government argued that international law had evolved to
the point where a state could regulate extraterritorial anticompetitive conduct
that had a substantial, direct, and intentional effect on the U.S. market.12 Many
other states took serious exception to this position, but the Supreme Court en
dorsed it in a somewhat careless manner in 1993.13 At about the same time, the
124 Legal Framework in Domestic and International Competition Law
European Court of Justice did effectively the same thing, holding that the Eu
ropean Economic Community then (now the European Union) could regulate
a price-fixing conspiracy among foreign producers that used local agents in its
implementation. 14
All of these cases involved foreign producers who sought to collect mo
nopoly rents from domestic consumers. When the victims of anticompetitive
behavior are foreign consumers, different standards have applied. In Matsushita
Electric Industrial Co. v. Zenith Radio Corp., the Court gave the back of its hand
to the argument that the Sherman Act provided a remedy to a plaintiff who
sought compensation for its exclusion from the Japanese domestic market. U.S.
antitrust laws, the Court declared," do not regulate the competitive conditions
of other nations' economies."15 More recently, the Court in F. Hoffman-La Roche
v. Empagran S.A. ruled that the Sherman Act does not apply to anticompetitive
conduct that causes only foreign injury. 16 Exceptionally, the Hoffman-La Roche
opinion makes much of the customary international law of territoriality, which
it invoked to justify its interpretation of the relevant statute. This interpretive
tool, the Court argued, "helps the potentially conflicting laws of different na
tions work together in harmony-a harmony particularly needed in today's
highly interdependent commercial world."17
The last, cryptic signal from the Court on the question of antitrust extra
territoriality is lodged in a footnote in Morrison v. National Australia Bank Ltd.,
a recent pronouncements on the presumption against extraterritoriality in
U.S. economic regulation. 18 The case is significant both because it involved
securities regulation, an area of great importance to international business, and
because it repudiated nearly half a century of lower court practice. In distin
guishing its earlier antitrust decisions, the Court noted simply that the Sher
man Act applied extraterritorially, without explaining why. 19
Taken together, these cases convey a sense of unease, if not confusion. In
other regulatory fields, the Court has seized on territoriality as a means of pro
viding a bright line for managing transnational problems. Congress, the Court
seems to believe, may manage international regulatory conflicts as it chooses,
but it must take the initiative in doing so. Absent explicit legislative action, the
default will be a lack of U.S. supervision of foreign transactions, whatever their
effect on U.S. interests.20 But in the field of antitrust, a different baseline applies.
Its dimensions and the reasons for the difference remain murky. Doubtlessly the
Justices do not agree among themselves as to these matters.
Looking back at the emerging doctrine, one can detect two competing
impulses framed by a structural problem. The structural problem is the cryptic
International Law and Competition Policy 125
language of the Sherman Act, which forbids collusive actions "in restraint of
trade or commerce" but provides no clear guidance as to what this means.
faced with this challenge, the U.S. courts have taken it upon themselves to de
velop a common law of fair trade that changes with time and fashion. 21 Unlike
(perhaps) other regulatory fields, Congress already has taken the initiative in
delegating to the courts the responsibility for devising the substantive standards
in antitrust.
In developing this common law, the Court has tried to accommodate two
competing insights. On the one hand, in a world of international commerce,
foreign conspiracies can impose significant harm on U.S. consumers and pre
sumptively should face regulation. On the other hand, judicial assaults on the
choices that foreign states make about the organization of their own markets
seem quixotic as well as dangerous. The Court plausibly could insist on further
direction from Congress before taking on other countries.
A focus not on the location of conduct but rather on the place of harm, to
some extent, balances these impulses. If foreign states choose to submit people
on their territory to monopoly rents, the case for U.S. courts coming to the
rescue of these victims seems especially weak. Thus, territoriality comes back
in as a constraint on national regulation, only more loosely than other areas.
The "place of harm" standard is necessarily more indefinite, and therefore more
debatable, than the "place of sale" rule imposed in Morrison.
To be clear, the cases do not explicitly invoke a territorial "place of harm"
limit on the Sherman Act. Rather, the courts' behavior and the somewhat con
fused accounts they give of their conduct seems to fit with such a rule. Thus,
one can used territoriality to predict judicial behavior, even if the courts them
selves talk about the concept obliquely when they do so at all.22
But this modified use of territoriality does not help with one important
problem. In many instances, the foreign producers seeking monopoly rents in
the United States are arms of a foreign state or otherwise act under state con
trol. Here the economic injury to U.S. consumers results from a direct inter
national conflict based upon opposing state policies. For a court to do nothing
would leave the supposed beneficiaries of the Sherman Act without a cause of
action. But to allow litigation would put the courts in the position of attacking
foreign governments without the clear backing of Congress. If territoriality
were the only limit on the Sherman Act, then these suits should proceed. Yet,
courts understandably have been queasy about taking on other states directly.
Because territoriality offers no help here, the courts have looked to other
doctrines to limit litigation against foreign states and their competition policies.
126 Legal Framework in Domestic and International Competition Law
International law offers two more doctrines of possible relevance-namely, sovereign immunity and the act of state doctrine. Each is relevant, even if only the first reflects a clear obligation imposed by international law.23
II. Sovereign Immunity as a Limit on Regulation Historically international law has blended the concepts of exclusive sovereign control over its territory and of sovereign consent by presupposing that sovereign acts performed on another state's territory rest on the host state's permission and that a promise not to hold the acting state responsible in the host state's courts accompanies this permission. Under traditional doctrines of international law, a state that invades another's territory without consent commits an international wrong, for which retaliation up to and including armed attack was permissible. If the state's presence came with consent, by contrast it would be assumed that the host state's consent embraced a promise not to interfere with the acting state's conduct to any greater degree than the acting state had agreed to at the outset. Out of these implied promises arose a doctrine of sovereign immunity, which instructed domestic courts not to exert their authority against a foreign sovereign without the consent of that sovereign or a command of its own state. 24
During the twentieth century, this doctrine evolved. After World War II, the United States took the lead in arguing for an exception to a general rule of immunity in cases where a sovereign mimicked a private actor (acta Jure gestionis), such as by engaging in commercial activity. Congress in 197 6 replaced, as to sovereigns but not government officials, the common law of immunity with the Foreign Sovereign Immunities Act (FSIA).25 This statute constitutes U.S. law, but it does not reflect international practice in all respects, and in a few instances, it may even violate international law.26
Under the FSIA, a foreign sovereign, or a legal entity controlled by a foreign sovereign, enjoys immunity from suit only if it satisfies several requirements. First, in the case of a sovereign-owned legal entity, the firm must not be formed under U.S. law. 27 Second, it must be directly owned by a foreign state at the time of the suit. 28 Third, the sovereign or entity must not have consented to the suit. 29 Fourth, the suit must not be based on commercial activity that is either carried on in the United States or has a direct effect in the United States. 30
The recent OPEC litigation illustrates how these rules apply to a foreign price-fixing cartel aimed at the U.S. market.31 U.S. subsidiaries of foreign na-
International Law and Competition Policy 127
tional oil companies (NOCs) enjoy no immunity because they are formed
under U.S. law. The NOCs also are subject to suit to the extent that they
are responsible for the sale of products in the United States, because this ac
tivity fits within the statutory exception for commercial activity. Neither the
states that make up OPEC nor the organization itself was a named defendant,
even though the organization and its state members made up the heart of the
conspiracy.
From a rational plaintiff's perspective,joining OPEC and the member states
to the litigation would have been pointless. Both the U.S. subsidiaries and the
NOCs were likely to have significant attachable assets in the United States.
OPEC has no U.S. presence, and foreign states normally do not own outright
attachable assets in foreign states. 32 To the extent that the plaintiffs wanted to
make money from the litigation, the available exceptions to foreign sovereign
immunity gave them everything they could have wanted.
The U.S. stance on sovereign immunity is not the. only one, of course. Some
states, including China, still take the position once embraced by the United
States that all state acts have a sovereign character and thus enjoy immunity.33
The International Court of Justice expressly refused to decide whether cus
tomary international law still embraces this rule.34 Even if the old position no
longer reflects the international consensus, those states that adhere to it may
implement this all-encompassing immunity within their own legal systems.
The practical consequence of broader sovereign immunity outside the
United States is limits on enforcement of any judicial awards obtained do
mestically. A beneficiary of a U.S. judgment would have no ability to reach
state-owned assets (including the assets of state-owned companies) located in
jurisdictions that embrace the traditional approach. This adds to the already
considerable difficulty of enforcing judgments against foreign sovereigns.
At the end of the day, however, sovereign immunity is not a significant con
straint on the use of competition law to attack state-organized export cartels.
As a general rule, the territoriality principle allows states to impose their own
rules on assets invested in, as well as transactions taking place on, that state's
territory. This means that retaliation against foreign cartels works only to the
extent that the foreign actor has put its people or property at risk in the retali
ating state. This fundamental characteristic of the international system is as true
for private cartels as those organized by states. 35 But where foreign actors do
enter the U.S. market, sovereign immunity does nothing to prevent the full
throated application of U.S. competition rules.
128 Legal Framework in Domestic and International Competition Law
Ill. The Puzzling Persistence of the Act of State Doctrine
Sovereign immunity is not, however, the end of the story. Other doctrines,
emanating from, if not strictly required by, international law also allow courts
to manage conflicts between cartel-promoting and consumer-protecting states.
In the United States, three overlapping doctrines provide some latitude to
courts seeking to avoid confrontations with foreign governments: the act of
state doctrine, the foreign sovereign compulsion defense, and the political ques
tion doctrine.
The act of state doctrine is, in the United States, one of the more com
plex and confused bodies of judicially constructed law. It is not a product of
international law as such but rather an independent response by some states to
problems raised by the territoriality principle. The leading U.S. decision Banco
Nacional de Cuba v. Sabbatino took great pains to state that neither interna
tional law nor the Constitution compels the doctrine. 36 Rather, courts apply
the doctrine to avoid judicial interference in decisions best made by the politi
cal branches. But unlike the political question doctrine, the matters covered by
the doctrine are not inherently incapable of judicial resolution. Thus, the courts
accept that Congress can override the doctrine and require them to address
particular disputes involving foreign sovereign acts.37
Where the act of state doctrine applies, it requires a court to accept the va
lidity of an act of foreign state. Acts by a sovereign of a sovereign nature within
its own territory trigger the doctrine. What suffices to override the doctrine,
as well as a precise demarcation of its boundaries, remains controversial. But
the Supreme Court has passed up at least one opportunity to denounce the
doctrine altogether, and the lower courts continue to apply it in a variety of
contexts, including antitrust cases.38
At first blush, the role of the doctrine in antitrust is puzzling. It is, after all,
only a default rule that courts may apply in the absence of any clear instruction
from the legislature. Act of state issues typically arise in disputes over property
rights, including mining and drilling concessions. Lacking constitutional stature,
the doctrine cannot survive a contradictory statutory command. The Sherman
Act is just such a command, instructing the courts to address anticompeti
tive behavior affecting U.S. commerce. One might think that the mandate of
Congress would supplant whatever discretionary considerations that motivate
the doctrine. And the antitrust laws make no distinction between private and
foreign-sovereign acts.
An explanation for the persistence of act of state in this field can be found
in a feature noted above: The U.S. courts have understood the antitrust laws as
International Law and Competition Policy 129
effecting a delegation of common-law powers to the judiciary. 39 The legislative
instruction in essence is no instruction, leaving the judiciary vested with the
responsibility to grapple with anticompetitive conduct but otherwise without
legislative guidance. Congress has neither overridden common-law doctrines,
of which act of state is an example, nor expressly endorsed departures from in
ternational practice, the territoriality principle in particular. The nature of the
statutory delegation thus invites reference to a doctrine that, while not apply
ing of its own force, remains useful as an interpretive template.40
By way of comparison, the Supreme Court has found the act of state doc
trine and its converse, the revenue rule, irrelevant in two cases involving the
scope of criminal fraud. In WS. Kirkpatrick & Co. v. Environmental Tectonics Corp.,
International, the Court allowed a firm to bring a civil suit against a competitor
under the Racketeering Influenced and Corrupt Organizations Act (RICO)
for obtaining a government contract through bribery.41 The Court deemed the
relevant question to be whether the payment of a bribe to obtain a govern
mental favor constituted fraud under federal law, not whether the bribe invali
dated the contract under Nigerian law.42 Accordingly, the act of state doctrine
did not apply.
The revenue rule is the logical counterpart of the act of state doctrine.
Just as the doctrine requires a court to accept the validity of a sovereign act
undertaken with the sovereign's territory, the rule requires a court to give no
extraterritorial effect to a sovereign's revenue impost.43 In Pasquantino v. United
States, the Court rejected the argument that this common-law rule should illu
minate the interpretation of"property" for purposes of wire fraud liability. 44 It
accordingly held that an attempt to evade Canadian customs duties constituted
criminal fraud because Canada's right to duties is a property interest within the
meaning of the statute. The Court asserted that the United States had a legiti
mate interest in criminalizing fraud carried out on its own territory, even if the
prosecution had the collateral effect of strengthening the sanctions for evasion
of a foreign revenue law.
Although the concepts of fraud and property both have their roots in the
common law, the Court has not understood the criminalization of fraud un
der federal law as constituting a delegation of general lawmaking power to
the judiciary. As a result, common-law doctrines derived from the principle
of territoriality do not have the same role to play in illuminating the scope
and meaning of the statutes. The Court instead focuses on the purpose of the
statute and the reprehensibility of the conduct involved, not on the effect of
criminalization on foreign sovereign acts.Antitrust is different precisely because
130 Legal Framework in Domestic and International Competition Law
the fact of the delegation of judicial lawmaking power is so clear, while the extent of this power is so undefined.
Even though antitrust in the United States rests on legislation, the courts legitimately may use the act of state doctrine as an interpretive tool. This basic point, however, does not resolve how the doctrine may function in specific cases. In particular, it leaves open the question of what limitations may constrain it. The Supreme Court has identified three possible exceptions, although it has embraced only two. 45 First, an act of positive law can override the doctrine, including rules of international law based on a high degree of codification or consensus.46 Second, the Court in Alfred Dunhill of London, Inc. v. Republic of Cuba held that state entities acting entirely within their civil law competence may do things that do not rise to the level of sovereign acts, and thus fall outside the doctrine. 47 Third, a plurality of the Dunhill Court endorsed a commercial exception to the doctrine. 48 In addition, the Court in WS. Kirkpatrick & Co. indicated more generally that the doctrine did not apply when the object of a lawsuit is not to treat a foreign act as a legal nullity but rather to attach adverse consequences to it.49
Unless and until international law embraces a norm condemning export cartels, either by treaty or by broad consensus constituting a binding customary norm, the first exception cannot apply. The only body of international law that comes close to creating such a norm is the Uruguay Round Agreements, which regulate trade law and arguably address anticompetitive refusals to export. But both U.S. and EU law expressly bar domestic courts from applying these agreements, instead relegating enforcement exclusively to state-to-state dispute resolution. so
The Dunhill exceptions, however, have considerably greater purchase. In antitrust cases, courts without exception have rejected the argument that all acts of state-owned entities constitute sovereign acts for purposes of the act of state doctrine. Were the rule otherwise, all activities carried out within the foreign state's territory would enjoy immunity from judicial review, contrary to the clear implication ofFSIA's commercial activity exception. The challenge instead is distinguishing sovereign acts from other behavior. 51
One line of argument focuses on the role of sovereign compulsion. As a formal matter, litigants and courts have treated foreign sovereign compulsion as an analytically distinct issue. 52 As an analytical matter, however, these cases are better seen as applying Dunhill.Actions by foreign firms, whether state-owned or not, that comply with a mandatory rule on the territory of the state that issues the mandate are themselves extensions of the state's sovereign authority.
International Law and Competition Policy 131
Attacks on those acts are simply assaults on the exercise of sovereign power. The
compulsion cases thus distinguish the exercise of civil law rights, to which the
doctrine does not apply, from the exercise of sovereign authority.
Another line of cases struggles with Dunhill's commercial exception. In the
most recent OPEC litigation, the Fifth Circuit ruled that a majority of the
Supreme Court had not excluded commercial conduct from the doctrine and
therefore refused to consider the issue.53 The Ninth Circuit reached the same
outcome by treating limits on exports of natural resources as inherently non
commercial. 54 Both decisions have the effect of giving conclusive effect to sov
ereign mandates carried out within the state's territory, even when the mandate
involves commercial transactions and results in direct harm to U.S. consumers.
Finally, there remains the general question of whether the act of state doc
trine has any relevance to suits that seek compensation for the harm caused by
a sovereign act, rather than nullifying the act outright. Read broadly, WS. Kirk
patrick & Co. seems to limit the doctrine only to suits falling into the second
category. If so, few if any antitrust suits ever would raise an act of state issue.
But the WS. Kirkpatrick opinion is deeply enigmatic, indicating at one point
that imposing tort liability for a wrongful detention would constitute the in
validation of the official act of detention. 55 Until the Court revisits the issue,
it may be best to treat that case as resting on a narrower ground-namely, the
inconsistency between the doctrine and the legislative purpose of regulating
the payment of bribes to foreign officials.
As noted above, the Supreme Court has yet to consider whether foreign
sovereign compulsion constitutes a valid excuse for conduct that otherwise
would be actionable under the antitrust laws.56 A number oflower courts have
applied the defense in instances where the compulsion is transparent and ema
nates from government policy makers, as opposed to the managers of state
owned enterprises. The prevalence of the defense may indicate that it will
endure and ultimately gain the endorsement of the Supreme Court.
Simply as a matter of analytic clarity, however, it does not appear that the
foreign sovereign compulsion defense does any useful work. 57 Compulsion re
quires a credible threat, which as a practical matter involves proposed action
or inaction with respect to people or assets on the territory of the threatening
sovereign. Anything that should count as foreign sovereign compulsion, accord
ingly, also would meet the territorial and sovereign-act components of the act
of state doctrine as limited by the Dunhill majority.
In the recent OPEC lawsuit, the Fifth Circuit invoked an alternative ground
for dismissing the complaint, holding that consideration by a court of a claim
132 Legal Framework in Domestic and International Competition Law
that maintenance of the OPEC cartel violated the Sherman Act would violate the political question doctrine. In doing this, the Fifth Circuit embraced the position of the Department of Justice in its amicus brief. On its face, however, the holding seems nonsensical.
The political question doctrine, however murky in detail, rests on a bedrock constitutional principle. Due either to an express constitutional assignment of responsibility or the inherent nature of the judicial process, some issues as a constitutional matter may not be resolved by the courts.58 The doctrine thus delineates an area where courts lack the capacity to adjudicate. But what does an attack on a government-organized cartel have to do with judicial incapacity? Is it plausible that, were Congress to adopt a law that expressly extends the Sherman Act to cartels managed by foreign states, the judiciary would refuse on constitutional grounds to carry out this mandate? If the answer is no, then surely the judiciary has the constitutional capacity to do the same under the currently vague standards of that statute. 59 Accordingly, talk about the doctrine seems more of a distraction than useful in international antitrust litigation, notwithstanding the arguments of the government and the occasional inclination of the lower courts to embrace them.
* * * In a world where optimal global consumer welfare dominated all other policy objectives, competition authorities probably would not distinguish between private and governmental conspiracies in restraint of trade. But in a world where states pursue other objectives and embrace strategic trade objectives, unilateral pursuit of aggressive proconsumer competition objectives invites trade wars rather than cooperation. In some instances, the risk is worth it, because a risk of sanctions may produce market liberalization. In such conflicts, the court may become useful instruments. But rarely do states regard their judiciary as the best place to locate the decision as to when to go to war.
One can imagine a world where the U.S. judiciary, out of an abundance of caution, fully embraced the territoriality principle and insisted that Congress mandate expressly any imposition of antitrust liability on conduct taking place outside the United States. Instead the courts have taken the riskier course of presumptively allowing lawsuits wherever the harm, rather than the conduct, occurs in the United States. But to ameliorate that risk, the courts, not always with a clear doctrinal basis, have withheld action when anticompetitive acts result directly from a transparent command of a foreign state. In such instances,
International Law and Competition Policy 133
the willingness of the foreign state to take responsibility for the anticompeti
tive conduct relocates the dispute to the sphere of state-to-state negotiations.
Where negotiations break down, the legislature still may enlist the courts in
the battle, but the courts will not start hostilities on their own. This outcome
is conservative in the sense that judicial inaction removes pressure that could
goad the government to negotiate international agreements that more closely
embrace global consumer welfare. But such conservatism is not necessarily a
bad thing.
Notes to Chapter 7 257
13. Daron Acemoglu & Ufuk Akcigit, State-Dependent Intellectual Property Rights Policy Nat'!
Bureau of Econ. Res., Working Paper No. 12775, Dec. 2006).
14. Michele Boldrin & David Levine, Growth and Intellectual Property (NBER Working Paper
Series No. 12769, 2006). 15. First, supra note 8, at 367. 16. Brunswick Corp. v. Pueblo Bowl-0-Mat, Inc., 429 U.S. 477, 488 (1977) (quoting Brown Shoe
Co. v. United States, 370 U.S. 294, 320 (1962)). 17. Lemley, supra note 12. 18. Robert Z. Lawrence, Brookings Trade Forum (1998).
19. Robert D. Willig, Economic Effects of Antidumping Policy, in Brookings Trade Forum (Robert Z.
Lawrence ed., 1998). 20. Such a thorough analysis should be required for so-called actionable subsidies that, according to
the WTO rules, can be prohibited when the complaining country shows that the subsidy has an adverse
effect on its interests. Actionable subsidies can be prohibited when they seriously injure the importing
country's domestic industry, rival exporters in a third country trying to compete with a subsidized ex
porter, or exporters trying to compete with subsidized domestic firms.
21. Michael Hahn & Kirtikumar Mehta, It's a Bird, It's a Plane: Some Remarks on the Airbus Appel
late Body Report (EC and Certain Member States-Large Civi!Aircraft,WT/DS316/AB/R), 12World
Trade Rev. 139 (2013). 22. In the interpretation of the rules, economic analysis should play a much more prominent role
than in the EU. 23. Carsten Fink & Keith E. Maskus, Intellectual Property and Development: Lessons from Recent
Economic Research (2004). 24. Verizon Communications Inc. v. Law Offices ofCurtisVTrinko 124 S. Ct. 872 (2004), rev'.g 305,
F.3d 89 (2d Cir. 2002). 25. In the Court of First Instance (CFI),judgrnent on the validity of the Commission decision that
found that Deutsche Telekom had abused its dominant position by making it impossible for competitors
to enter in the competitive segment of the market, the CF! claimed that there is an abuse "if the differ
ence between the retail prices charged by a dominant undertaking and the wholesale prices it charges
its competitors for comparable services is negative, or insufficient to cover the product-specific costs to
the dominant operator of providing its own retail services on the downstream market." The fact that
Deutsche Telekom was subject to a price cap regulation would have made a difference only insofar as
the regulation would have imposed on Deutsche Telekom the contested behavior. Alberto Heirnler, Is
Margin Squeeze an Antitrust or a Regulatory Violation?, 6]. Competition L. & Econ. 879 (2011).
26. Damien Geradin & Miguel Rato, FRAND Commitments and EC Competition Law, (2010),
available at http://ssrn.com/abstract=1527407.
27. SeeCaseT-167108. 28. European Commission Case No. COMP/37.792 Microsoft of24.3.2004. See Robert D.An
derson & Alberto Heimler, What Has Competition Done for Europe? An Inter-Disciplinary Answer, 4 Aus
senwirtschaft (2007). 29. Another aspect of the case that involves the bundling of Microsoft's Media Player software with
its operating system is not discussed in the paper.
30. See First, supra note 8. 31. Christos Genakos et al., The European Commission vs. Microsoft: Competition Policy in
High-Tech Industries (2007) (LSE working paper).
32. See also on this Ravi Mehta, Imprecise Legal Concepts Are No Excuse, Competition Law View
from Blackstone Chambers, available at http:/ I competitionbulletin.com/.
33. See the Justice Department press release, available at http://www.justice.gov/atr/public/press
_releases/2011 /266149 .htm. 34. See Chapter 2.
Chapter 7 1. See generally Paul B. Stephan, Global Governance, Antitrust, and the Limits of International Cooperation,
38 Cornell Int'! L.J. 173 (2005); Edward Iacobucci, The Interdependence ofTrade and Competition Policies,
21 World Competition L. & Econ. Rev. 5 (1997).
258 Notes to Chapter 7
2. In theory the Uruguay Round Agreements allow one state to challenge another's competition policy as inconsistent with the General Agreement on Tariffs and Trade or the Agreement on Technical Barriers to Trade. A few cases have arisen, including one under the General Agreement on Trade in Services (which applies only when a government agrees to open up a particular industry to discipline under that Agreement) and a rather idiosyncratic attack on a little used U.S. antidumping statute. For proposals to bring export cartels under WTO regulation, see Marek Martyniszyn, Export Cartels: Is It Legal to Target Your Neighbor? Analysis in Light ef Recent Case Law, 15 J. Int'] Econ. L. 181 (2012); Florian Becker, The Case ef Export Cartel Exemptions: Between Competition and Protectionism, 3 J. Competition L. & Econ. 97 (2007); D. Daniel Sokol, What Do We Really Know About Export Cartels and What Is the Appropriate Solution?, 4 J. Competition L. & Econ. 967 (2008);AndrewT. Guzman, International Antitrust and the WTO--The Lessons from Intellectual Property, 43 Va.J. Int'! L. 933 (2003); Eleanor M. Fox, International Antitrust and the Doha Round, 43 Va. J. Int'! L. 911 (2003); H. C. Claus-Dieter Ehlermann & Lothar Ehring, WTO Dispute and Competition.Law: Views from the Perspective of the Appellate Body's Experience, 26 Ford. Int'! LJ. 1505 (2002); Ernst-Ulrich Petersmann, International Competition Rules for Governments and for Private Business: A "Trade LawApproach"for Linking Trade and Competition Rules in the WTO, 72 Chi.-Kent L. Rev. 545 (1996).After originally embracing increased linkage between trade and competition law in the Doha Round, the WTO members subsequently rejected the idea. See DOHA Work Program-Decision Adopted by the General Council on August 1, 2004,WT/L/579, ~ l(g), available at http:/ /www.wto.org/ english/ tratop_e/ dda_e/ ddadraft_3 ljul04_e. pdf.
3. Schooner Exchange v. M'Faddon, 11 U.S. (7 Cranch) 116, 136 (1812). 4. Jurisdictional Immunities of the State (Germany v. Italy: Greece Intervening), [2012] I.CJ.
143 ~ 57. 5. See, e.g., Marko Milanovic, Extraterritorial Application of Human Rights Treaties-Law, Prin
ciples, and Policy (2011); Kai Raustila, Does the Constitution Follow the Flag? (2009). 6. See Paul B. Stephan, Privatizing International Law, 97Va. L. Rev. 1573 (2011). 7. Louis B. Sohn, The New International Law: Protection of the Rights of Individuals RatherThan States,
32 Am. U. L. Rev. 1 (1982). 8. See supra note 4. 9. The one dissent in the case did advance a theory of international law that marginalized state
consent in favor of ethical values.Jurisdictional Immunities of the State (Germany v. Italy: Greece Intervening), supra note 4 (Canyado Trindade,J., dissenting). The most noteworthy thing about that dissent, however, is that no other member of the Court joined it.
10. American Banana Co. v. United Fruit Co., 213 U.S. 347 (1909). 11. United States v. Sisal Sales Corp., 274 U.S. 268 (1927). 12. United States v.Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945). Because the Supreme
Court lacked a quorum to consider this case, the court of appeals decision accepting the government's contention remained the final word for nearly half a century.
13. Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993). The Court expressly disavowed relying on the 1982 Foreign Trade Antitrust Improvements Act, which at least by negative inference might have supported the outcome. 509 U.S. at 796 n.23, 798. Evidence of the hostility of other states includes both clawback regimes that allowed defendants in U.S. courts to sue for restitution of the punitive component of antitrust damages and blocking statutes that forbade cooperation with civil or criminal cases brought in the United States. For a review of this legislation, see Gary B. Born & Peter B. Rutledge, International Civil Litigation in United States Courts 680-83, 972-77 (5th ed. 2011).
14. In re Wood Pulp Cartel: A Ahlstrom Osakeytio v. EC Commission (Joined Cases 89, 104, 116, 117, & 125-129/85), [1988] E.C.R. 5193. See also Gencor Ltd. v. Comm'n (Case T-102/96), [1999] E.C.R. II-753, ~ 90.
15. 475 U.S. 574, 582 (1986). In a footnote, the Court clarified that "the Sherman Act does reach conduct outside our borders, but only when the conduct has an effect on American commerce." Id. at 582 n.6. It then cited Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962), a case where foreign and domestic producers colluded in a price-fixing cartel directed at the U.S. market. Nowhere in the opinion did the Court refer to the 1982 Foreign Trade Antitrust Improvements Act, which seemed to mandate an exclusion from Sherman Act coverage for foreign economic injuries. In a leading case decided not long after Matsushita, a court of appeals ignored this language altogether when considering a challenge to a state policy of limiting the carriage of bulk imported cargo to national
Notes to Chapter 7 259
carriers. O.N.E. Shipping Ltd. v. Flota Mercante Grancolombiana, S.A., 830 F.2d 449 (2d Cir. 1987). It
instead based its decision on the act of state doctrine, discussed below.
16. 542 U.S. 155 (2004).The Court did recognize an exception to this rule in cases where a price
fixing conspiracy targeted at the U.S. market "gives rise to" a foreign injury. The reach of this exception
depends on what standard one employs for causation. At least so far, the courts have understood the
standard to be demanding. On remand, the lower court ruled that foreign consumers did not have a
claim under the Sherman Act when the price-fixing conspiracy as to the U.S. market merely facilitated
their injury. Empagran S.A. v. F. Hoffmann-La Roche, Ltd., 417 F.2d 1267 (D.C. Cir. 2005), cert. denied,
546 U.S. 1092 (2006). 17. 542 U.S. at 164-65.
18. 561 U.S. 247 (2010). The repudiated cases include !IT, Int'! Inv. Trust v. Cornfeld, 619 F.2d
909 (2d Cir.1980); Bersch v. Drexel Firestone, Inc., 519 F.2d 974 (2d Cir.1975); !IT v.Vencap, Ltd., 519
F.2d 1001 (2d Cir.1975); Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326 (2d Cir.1972);
Schoenbaum v. Firstbrook, 405 F.2d 200 (2d Cir.), reheard en bane, 405 F.2d 215 (2d Cir. 1968).
19. Id. at 258 note 11 (citing Continental Ore, supra note 15).The footnote then explains that some
earlier cases involved "conspiracies to restrain trade in the United States," but did not indicate that this
was an essential element of a Sherman Act violation. Id. In particular, the Court made no mention of the
1982 amendments to the antitrust statutes as perhaps providing an independent basis for extraterritorial
application. 20. In addition to Morrison v. National Australia Bank, Ltd., the leading cases are Kiobel v. Royal
Dutch Petroleum Co., 133 S. Ct. 1659 (2013), and Equal Employment Opportunity Comm'n v. Ara
bian American Oil Co (Aramco), 499 U.S. 244 (1991). Congress responded to Aramco by adopting
Section 109 of the Civil Rights Act of 1991, Pub. L. 102-166, 105 Stat. 1071 (1991), which imposes
limited nondiscrimination obligations on U.S. employers operating overseas. It reacted to Morrison
through Section 929P(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L.
No. 111-203, 124 Stat. 1376 (2010), which attempts to restore the SEC'sjurisdiction over some foreign
sales of securities but does not apply to private suits. It has not yet reacted to Kiobel. See Paul B. Stephan,
The Political Economy of Extraterritoriality, 1 Pol. & Gov. 92 (2013).
21. National Society of Professional Engineers v. United States, 435 U.S. 679, 688 (1977); North
ern Securities Co. v. United States, 193 U.S. 197, 361-62 (1904) (Brewer,]., concurring). For examples
of shifts in doctrine in the face of changed perceptions of optimal market structure, see, e.g., Leegin
Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007).
22. The Court also can avoid international conflicts by treating foreign state-managed conduct
as not harmful and thus outside the scope of regulation altogether. In Matsushita, the Court ruled that
U.S. law did not apply to a scheme, allegedly managed by the Japanese government, to capture market
share in the United States through low prices absent credible evidence that the scheme, once successful,
would create a durable barrier to entry. This ruling made unnecessary an inquiry into the availability of
a foreign sovereign compulsion defense, the question on which the Court originally had granted certio
rari. I discuss this defense and its relationship to the act of state doctrine below. European case law is less
clear on this point and might allow government regulation of underpricing even in the absence of clear
evidence of a stable barrier to entry. One complicating factor, however, is that many of the cases impli
cate the separate doctrine under European law disallowing improper government subsidies (state aids).
For a review of the cases, see D. Daniel Sokol, Competition Policy and Comparative Corporate Governance of
State-Owned Enterprises, 2009 BYU L. Rev. 1713, 1788-92.
23. See also Marek Martyniszyn, Avoidance Techniques: State Related Defences in International
Antitrust Cases (UCD Working Papers in Law, Criminology & Socio-Legal Studies Research Paper
No. 46/2011, 2012) (reviewing U.S., British, and EC use of sovereign immunity; act of state doctrine;
political question doctrine; and foreign state compulsion in antitrust cases).
24. Schooner Exchange v. M'Faddon, 11 U.S. (7 Cranch) 116 (1812).
25. 28 U.S.C. §§ 1602-11; Samantar v.Yousuf, 560 U.S. 305 (2010).
26. In particular, the refusal of the United States to recognize state immunity in certain cases in
volving torture seems inconsistent with the International Court of Justice's understanding of the present
state of customary international law.
27. 28 u.s.c. §§ 1603(b)(3).
28. Dole Food Co. v. Patrickson, 538 U.S. 468 (2003).
260 Notes to Chapter 7
29. 1605(a)(l). Consent can be implied by failure to object to jurisdiction at the first opportunity.
30. 28 U.S.C. § 1605(a)(2). I ignore for present purposes other statutory exceptions to state im
munity, which do not seem relevant to antitrust issues. 31. Spectrum Stores, Inc. v. Citgo Petroleum Corp., 632 F.3d 938 (5th Cir. 2011).
32. Earlier litigation established that OPEC cannot be subjected to service of process in the United
States. Prewitt Enterprises, Inc. v. OPEC, 353 F.3d 916 (11th Cir. 2003). Under FSIA, immunity from
attachment is broader than immunity from litigation. 28 U.S.C. §§ 1609-11. 33. See Simon N.M.Young, Immunity in Hong Kong for Kleptocrats and Human Rights Violators, 41
Hong Kong L.J. 421 (2011). 34. See Jurisdictional Immunities of the State (Germany v. Italy: Greece Intervening), supra note 4,
at '1! 59. 35. See Joel I. Klein, The Internationalization of Antitrust: Bilateral and Multilateral Responses.
Presented atThe European University Institute Conference on Competition,June 13, 1997, available at
http:/ /www.justice.gov/atr/public/speeches/1580.htm. 36. 376 U.S. 398, 427-28 (1964). 37. Immediately after the Supreme Court decided Sabbatino, Congress overruled the case as to
expropriations of the property of foreign investors. 22 U.S.C. s 2370(e)(2). The Supreme Court has not
found an opportunity to consider a case where that statute applied, but the lower courts have accepted
the congressional mandate. 38. W. S. Kirkpatrick & Co., Inc. v. Environmental Tectonics Corp., International, 493 U.S. 400
(1990). For lower federal court resort to the doctrine in antitrust cases, see Spectrum Stores, Inc. v. Citgo
Petroleum Corp., 632 F.3d 938 (5th Cir. 2011); O.N.E. Shipping Ltd. v. Flota Mercante Grancolom
biana, S.A., 830 F.2d 449 (2d Cir. 1987); Clayco Petroleum Gorp. v. Occidental Petroleum Corp., 712
F.2d 404 (9th Cir. 1983); !AM v. OPEC, 649 F.2d 1354 (9th Cir. 1980); Hunt v. Mobil Oil Corp., 550
F.2d 68 (2d Cir. 1977). 39. See supra note 21. 40. The U.S. government accepts that the doctrine applies in antitrust cases, "if the facts and cir
cumstances indicate that: (1) the specific conduct complained of is a public act of the sovereign, (2) the
act was taken within the territorial jurisdiction of the sovereign, and (3) the matter is governmental,
rather than commercial." U.S. Department of Justice & Federal Trade Commission, Antitrust Enforce
ment Guidelines for International Operations, Antitrust Enforcement Guidelines for International
Operations, Antitrust Enforcement Guidelines for International Operations § 3.33 (1995) [hereinafter
Antitrust Enforcement Guidelines]. 41. 493 U.S. 400 (1990). 42. RICO does not independently criminalize conduct but rather enhances penalties and pro
vides for civil treble damages suits for specific crimes, if carried out in an organized fashion within the
meaning of the statute. The predicate offenses in W. S. Kirkpatrick were mail and wire fraud under 18
U.S.C. §§ 1341, 1343. Environmental Tectonics Corp. v. W. S. Kirkpatrick & Co., 659 F. Supp. 1381,
1391(D.N.J.1987). 43. The United States recognized the revenue rule in The Antelope, 23 U.S. (10 Wheat.) 66, 123
(1825). 44. 544 U.S. 349 (2005). 45. The existence of a fourth exception, where the Executive Branch seeks to override the doc
trine without relying on a statute or treaty, is not clear. In First National City Bank v. Banco Nacional
de Cuba, 406 U.S. 759 (1972), a three-justice plurality asserted that the Executive Branch had this
discretion. Five members of that Court rejected the claim. In W. S. Kirkpatrick & Co., Inc. v. Environ
mental Tectonics Corp., International, 493 U.S. 400 (1990), the Court suggested that factors such as the
views of the Executive might justify constriction of the doctrine but in no event could justify expansion
of its scope. 46. 376 U.S. at 428. At least one lower court has expanded this point by treating all so-called jus
cogens norms of international law as overriding the doctrine. Sarei v. Rio Tinto PLC, 671 F.3d 736, 757
(9th Cir. 2011), vacated and remanded, 133 S. Ct. 1995 (2013), reversed on other grounds, 722 F.3d 1109
(9th Cir. 2013). For criticism of such a use of the jus cogens concept, see Paul B. Stephan, The Political
Economy ofJus Cogens, 44 Vand.J. Transnat'l L. 1073 (2011). In essence, this supposed exception rests
on confusion about the doctrine's role as an interstitial rule, rather than as an independent source of
legal authority.
Notes to Chapter 8 261
47. Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 693 (1976).The government
does not seem to recognize Dunhill's distinction between a civil law act and a commercial act. Antitrust
Enforcement Guidelines, supra note 40. 48. Id. at 695-96 (plurality opinion). 49. 493 U.S. at 405-06. 50. Portuguese Republic v. Council (Case C-149/96), [1999] E.C.R. I-8395; Uruguay Round
Agreements Act. At least two lower court cases have intimated that a violation of the Uruguay Round
Agreements might negate a sovereign compulsion defense to an antitrust claim. Resco Products, Inc. v.
Bosai Mineral Group Co., Ltd., 2010-1 Trade Cas. 'IJ 77.061 (WD. Pa. 201 l);Animal Science Products,
Inc. v. China National Metals & Minerals Import & Export Corp., 702 F. Supp. 320 (E.N.J. 2010), rev'd
on other grounds, 654 F.3d 462 (3d Cir. 2011). Neither case explored whether such an approach would
be consistent with the statutory command not to incorporate the Uruguay Round Agreements into
domestic law. 51. See Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 707-08 (1962)
(involvement of government agent in anticompetitive conspiracy does not insulate other participants
from antitrust liability); Williams v. Curtiss-Wright Corporation, 694 F.2d 300, 304 (3d Cir. 1982) (al
legation that defendant induced foreign governments not to deal with plaintiff does not trigger act of
state doctrine); Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287, 1293-94 (3d Cir. 1979)
(allegation that defendant induced the grant of foreign patents for anticompetitive reasons does not trig
ger act of state doctrine); Industrial Investment Development Corp. v. Mitsui & Co., Ltd., 594 F.2d 48,
53 (5th Cir. 1979) (allegation that defendant induced government agency to withhold license does not
trigger act of state doctrine); Sage International, Ltd. v. Cadillac Gage Co., 534 F. Supp. 896 (E.D. Mich.
1981) (allegation that defendant induced foreign governments not to buy plaintiff's product does not
trigger act of state doctrine). 52. In re Japanese Electronic Products Antitrust Litigation, 723 F.3d 238, 315 (3d Cir. 1983), rev'd on
other grounds, 475 U.S. 574 (1986); In re Vitamin C Litigation, 810 F. Supp. 2d 522 (E.D.N.Y. 201 l);Ani
mal Science Products, Inc. v. China National Metals & Minerals Import & Export Corp., 702 F. Supp. 320
(E.N.J. 2010), rev'd on other grounds, 654 F.3d 462 (3d Cir. 2011). See Marek Martyniszyn, supra note 23.
53. 632 F.3d at 955 n.16. 54. MOL, Inc. v. People's Republic of Bangladesh, 736 F.2d 1326 (9th Cir. 1984). MOL involved
the commercial exception to FSIA, not the act of state doctrine, and probably no longer is good law as
to that statute. See Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992). But the broad scope of
the statutory exception need not be read into the common-law act of state doctrine.
55. 493 U.S. at 405-06 (distinguishing Underhill v. Hernandez, 168 U.S. 250 (1897). See Paul B.
Stephan, International Law in the Supreme Court, 1990 Sup. Ct. Rev. 133, 149-50.
56. The Justice Department's Antitrust Guidelines also recognized this defense. Antitrust Enforce
ment Guidelines, supra note 40, at § 3.32. 57. In several recent cases, district courts have addressed the defense, one holding that it did not
apply and the other that it might apply to some but not all of the defendants' conduct. In each instance,
the court just as easily could have held that the government acts in question did or did not come within
Dunhill's civil law exception to the act of state doctrine. In re Vitamin C Litigation, 810 F. Supp. 2d 522
(E.D.N.Y. 2011); Animal Science Products, Inc. v. China National Metals & Minerals Import & Export
Corp., 702 F. Supp. 320 (E.N.J. 2010), rev'd on other grounds, 654 F.3d 462 (3d Cir. 2011).
58. For the Court's most recent pronouncements, see ZivotofSky v. Clinton, 132 S. Ct. 1421 (2012).
59. The Spectrum court recognized that Congress had considered legislation that would have ap
plied criminal and civil sanctions to the OPEC cartel. The court did not see the prospect of such legisla
tion as undermining an argument based on constitutional capacity of the judiciary, however, because
the envisioned statute would not authorize private civil litigation. 632 F.3d at 653-54 n.15.Why a claim
would become justiciable if the government were to bring it if it were not as long as a private person
asserted it was not explained (and does not seem to have a valid explanation).
Chapter 8 I wish to thank Erin Orndorff, Notre Dame Law class of2013, for her assistance with this chapter.An
expanded version of this chapter is available in the Maine Law Review (65) 1, 2012.
1. Among the "highlights" of this litany of cases is Leegin Creative Leather Prods., Inc. v. PSKS,
Inc., 551 U.S. 877 (2007) (overruling Dr. Miles Med. Co. v.John D. Park & Sons Co., 220 U.S. 373