Why Antitrust Suits Should be Subject to Forum Non Conveniens Dismissal

Introduction

The Sixth Circuit recently joined the First[1] and Second[2] Circuits in holding that antitrust actions can be dismissed under forum non conveniens.[3] The Fifth Circuit remains the only jurisdiction to consider the question and hold that antitrust actions cannot be dismissed under forum non conveniens.[4]

            Antitrust laws ensure a competitive economy.[5] Congress designed antitrust laws to maximize efficiency, prevent companies from charging monopoly prices, and generally encourage competition.[6] There are primarily two federal statutes that regulate monopolies: the Sherman Act[7] and the Clayton Act.[8] The Sherman Act broadly regulates trade,[9] monopolies, attempted monopolization, and conspiracies to monopolize.[10] The Clayton Act deals with several types of anticompetitive practices: price discrimination,[11] exclusive dealing,[12] requirements contracts,[13] tying arrangements,[14] mergers and acquisitions,[15] and interlocking directorates.[16]

Due to the nature of our global economy, many antitrust defendants are international corporations.[17] Forum non conveniens allows American courts to dismiss a transnational lawsuit in favor of a more appropriate foreign court.[18] This blog will analyze whether forum non conveniens should be applied in antitrust lawsuits.

Background

            Prevent USA (hereinafter, “Prevent”) supplied Volkswagen, a German company, with automotive parts.[19] Prevent sued Volkswagen in the United States when Volkswagen cancelled its contracts with Prevent.[20] Prevent acquired other automotive manufacturer buyers, which increased the demand for Prevent’s products.[21] Prevent’s theory was that Volkswagen cancelled the contracts because Prevent sold automotive parts to Volkswagen’s competitors.[22] Prevent also claimed that Volkswagen’s cancelling of the contracts “frustrated its plans to acquire struggling suppliers in the United States.”[23] Ultimately, Volkswagen moved to dismiss on forum non conveniens grounds, asserting that Germany is a more appropriate venue.[24] The trial court agreed with Volkswagen, and the Sixth Circuit upheld the decision.[25]

Forum Non Conveniens and Antitrust Suits

            Convenience is the primary policy behind the forum non conveniens doctrine.[26] Forum non conveniens tests analyze whether there is an adequate foreign forum, public and private interest factors, and broad considerations about the plaintiff’s forum choice.[27]

            The Fifth Circuit offered two reasons for refusing to dismiss antitrust suits for forum non conveniens: (1) precedent and (2) independent policy reasons.[28] First, the Mitsui Court uniquely interprets Supreme Court precedent to mean that U.S. antitrust laws eliminated “judicial discretion concerning where [a] case should be tried.”[29] That is, the Fifth Circuit holds that a trial court does not have the power to dismiss antitrust actions on forum non conveniens grounds.[30] Second, the Mitsui Court claimed that there are significant enough policy reasons to refuse the application of forum non conveniens to antitrust suits.[31] The Court reasoned that applying forum non conveniens “would be the functional equivalent of a decision that defendants’ acts are beyond the scope of the Sherman Act.”[32] In other words, the Fifth Circuit noted that the foreign court would not consider the plaintiff’s U.S. antitrust allegations.[33] Thus, a foreign corporation could simply assert forum non conveniens to bypass U.S. antitrust laws.[34]

            The Fifth Circuit’s (1) precedential and (2) policy justifications are unconvincing. First, its reasoning is on shaky precedential grounds. The Supreme Court holds that whether a foreign court will apply less favorable laws to the plaintiff’s claim is irrelevant in a forum non conveniens analysis.[35] Likewise, a district court generally should not consider the effects of a forum non conveniens dismissal on the plaintiff’s cause of action.[36]

            Second, the Fifth Circuit’s independent policy reasons are equally unpersuasive. Forum non conveniens tests already adequately safeguard the Supreme Court’s policy considerations of convenience and fairness.[37]  Forum non conveniens applies only in limited circumstances because courts prefer to give the plaintiff his choice of forum.[38] The doctrine turns on whether the American forum court imposes a “heavy burden on the defendant or the court, and [. . .] the plaintiff is unable to offer any specific reasons of convenience supporting his choice.”[39]

The Sixth Circuit’s test is representative of the doctrine.[40] In the Sixth Circuit, courts examine (1) whether there is an adequate alternative forum; (2) whether the private and public interest factors favor the American or foreign court; and (3) whether there are legitimate interests in denying the plaintiff’s choice of forum.[41] Forum non conveniens ensures that the lawsuit is sufficiently connected to the United States and that the parties have access to evidence.[42] The doctrine also avoids unnecessary and complicated conflicts of law issues.[43]

            Antitrust laws are enforced across the globe. More than 120 countries have adopted antitrust laws.[44] Countries with antitrust laws contributed 95.4 percent of the world gross domestic product.[45] Therefore, there is little risk that an anticompetitive defendant cannot be held accountable in a court of law.

Conclusion

            Forum non conveniens law adequately protects antitrust plaintiffs. Courts rarely apply forum non conveniens.[46] When a court does apply the doctrine, courts consider public interest factors, private interest factors, and give significant weight to the plaintiff’s choice in forum.[47] Application of the doctrine merely prevents an antitrust plaintiff from bringing a lawsuit in America when the underlying facts have little connection to this country. While federal antitrust laws were made with an eye toward regulating the global economy,[48] the possibility of a less favorable ruling in a foreign country is an inadequate justification for keeping the lawsuit in the United States.[49] America is not the only country with antitrust laws; most other countries have them, too.[50] Therefore, Supreme Court precedent and independent policy justifications weigh in favor of forum non conveniens dismissal in antitrust actions. 

[1] Howe v. Goldcorp. Invs., 946 F.2d 944 (1st Cir. 1991).

[2] Cap. Currency Exch., N.V. v. Nat’l. Westminster Bank PLC, 155 F.3d 603 (2d Cir. 1998).

[3] Prevent USA Corp. v. Volkswagen AG, 17 F.4th 653 (6th Cir. 2021).

[4] Indus. Inv. Dev. Corp. v. Mitsui & Co., 671 F.2d 876 (5th Cir. 1982), cert. granted, vacated, 460 U.S. 1007 (1983).

[5] United States v. South-Eastern Underwriters Ass’n, 322 U.S. 553, 559 (1944).

[6] Ramsi A. Woodcock, Inconsistency in Antitrust, 68 U. Mia. L. Rev. 105, 106-107 (2013).

[7] 15 U.S.C. §§ 1-7.

[8] 15 U.S.C. §§ 12-27.

[9] 15 U.S.C. § 1.

[10] 15 U.S.C. § 2.

[11] 15 U.S.C. § 13. Price discrimination occurs when a single supplier charges customers different prices depending on what the supplier thinks a particular customer can pay. See Corn Prods. Refin. Co. v. FTC, 324 U.S. 726, 734 (1945).

[12] 15 U.S.C. § 14. Exclusive dealing generally occurs when “the practical effect” of the contract lessens competition. Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 325-26 (1961).

[13]15 U.S.C. § 14. A requirements contract is one where the buyer agrees to purchase all of its requirements through a particular seller. E.g., Mid-American Salt, LLC v. Morris Cty. Coop. Pricing Council, 964 F.3d 218, 226 (3d Cir. 2020).  

[14] 15 U.S.C. § 14. A tying arrangement conditions the purchase of one product to the purchase of another, unrelated product. E.g., Davis. v. Marathon Oil Co., 528 F.2d 395 (6th Cir. 1975). 

[15] 15 U.S.C. § 18. Mergers and acquisitions occur generally when one company purchases the stock of another. Id.

[16] 15 U.S.C. § 19. There are interlocking directorates when a person simultaneously serves as a director or officer in any two corporations.

[17] A Most Private Remedy: Foreign Party Suits and the U.S. Antitrust Laws, 114 Harv. L. Rev. 2122, 2128-29 (2001).

[18] See, e.g., Sinochem Int’l Co. v. Malay. Int’l Shipping Corp., 549 U.S. 422, 425 (2007).

[19] Prevent USA Corp. v. Volkswagen AG, 17 F.4th 653, 656-57 (6th Cir. 2021).

[20] Id.

[21] Id.

[22] Id.

[23] Id. at 657.

[24] Id.

[25] Prevent USA Corp. v. Volkswagen AG, 17 F.4th 653, 663-64 (6th Cir. 2021).

[26] Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249 (1981).

[27] E.g., Prevent USA Corp. v. Volkswagen AG, 17 F.4th 653, 656-57 (6th Cir. 2021).

[28] Jeremy C. Bates, Home is Where the Hurt Is: Forum Non Conveniens and Antitrust, 2000 U. Chi. Legal F. 281, 291-92 (2000).

[29] Indus. Inv. Dev. Corp. v. Mitsui & Co., 671 F.2d 876, 890 (5th Cir. 1982) (citing United States v. Nat’l City Lines, Inc., 334 U.S. 573 (1948)).

[30] Id.

[31] Id. at 981.

[32] Id.

[33] Id.

[34] Id.

[35] Piper Aircraft Co. v. Reyno, 454 U.S. 235, 247 (1981).

[36] Id.

[37] Id. at 248-49.  

[38] Id.

[39] Id.

[40] See, e.g., Joel H. Samuels, When Is an Alternative Forum Available? Rethinking the Forum Non Conveniens Analysis, 85 Ind. L.J. 1059, 1060-61 (2010) (summarizing the general forum non conveniens test).

[41] Prevent USA Corp v. Volkswagen AG, 17 F.4th 653, 658-59 (6th Cir. 2021).

[42] See Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981).

[43] Id.  

[44] Anu Bradford & Adam S. Chilton, Trade Openness and Antitrust Law, 62 J. L. & Econ. 29, 36 (2019).

[45] Id.

[46] Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981).

[47] See id.

[48] Jeremy C. Bates, Home is Where the Hurt Is: Forum Non Conveniens and Antitrust, 2000 U. Chi. Legal F. 281, 317-18 (2000).

[49] Piper Aircraft Co. v. Reyno, 454 U.S. 235, 247 (1981).

[50] Anu Bradford & Adam S. Chilton, Trade Openness and Antitrust Law, 62 J. L. & Econ. 29, 36 (2019).