What goes around comes around - maybe

At least since the invasion of Panama and seizure of Manuel Noriega in December 1989, the US has in effect taken the position that our law is universal, that anyone who breaks a US law is subject to being arrested by US agents, forcibly brought to the US, and tried under US law - even if the actions at issue took place entirely outside the borders of the US. As I noted in the print version of "Lotus" that existed at the time,

[n]othing [Noriega] was accused of doing was done within US jurisdiction. But that didn't matter. Indeed, Richard Gregorie, who supervised the framing of the indictment, said after the trial "we aren't going to be able to limit our law enforcement to within our borders.... The message is, we will come get you."

Well, guess what. The law of unintended consequences just may have bit some companies on the butt, and they don't like it one bit.

Washington, Dec. 15 - The Supreme Court, accepting a closely watched international price-fixing case for review, agreed on Monday to decide how United States antitrust law applies to transactions that take place entirely overseas.

Although the issue has only lately gained prominence in the lower courts, recent rulings opening federal courts to antitrust claims by foreign plaintiffs with only remote connections to domestic commerce have engendered enormous interest and concern among companies fearful of newly defined antitrust liability for their overseas operations.

It seems several manufacturers and distributors of vitamins for humans and animals had pleaded guilty to criminal antitrust charges in the United States, paying federal fines of $900 million. They also had paid civil penalties to the European Union and individual foreign countries and settled other lawsuits. All these penalties related to the same issue: price fixing.

In 2000, a class action suit was filed on behalf of all foreign purchasers of the defendants' vitamins, seeking triple damages based on the Sherman Antitrust Act.

The Federal District Court here dismissed the suit on the grounds that "persons injured abroad in transactions otherwise unconnected with the United States" could not invoke the Sherman Antitrust Act. The United States Court of Appeals for the District of Columbia Circuit, in a ruling last January, reinstated the suit. It held that as long as "someone, even if not the foreign plaintiff who is before the court" can claim injury from a defendant's antitrust violation in the United States, foreign plaintiffs can also sue that defendant for the purely foreign effects of its conduct as well.

In other words, the Appeals Court found that if anyone can make a claim for damages under Sherman for actions involving domestic commerce, anyone else can make a claim based on the same conduct, even if those transactions took place entirely outside the US. The effect is to allow the suit to go to trial. The Supreme Court has now agreed to consider an appeal to that ruling.

The thing is, even though the Appeal Court's reasoning was based on its reading of a 1982 amendment to the Sherman Act, which broadened its reach, the philosophical basis seems absolutely in line with post-Noriega thinking. I mean, "we aren't going to be able to limit our law enforcement to within our borders," are we? Even if the transactions in question here took place entirely outside the US, they still violated US law, didn't they? And our law is universal, isn't it?

Well, isn't it?

The administration is almost certain to weigh in on the defendants' side now that the Supreme Court has agreed to hear their appeal.

Duh.