In January 2018, the U.S. Supreme Court granted certiorari in In re vitamin C Antitrust Litigation, the first lawsuit in U.S. history where the Chinese government has intervened to take a position in a case. The request for Supreme Court review followed a September 2016 decision by the Second Circuit that set aside a US$147 million treble damages verdict for the U.S.-purchaser plaintiffs. In setting aside the verdict, the Second Circuit held that the district court had failed to follow the reasoning in a submission by the Chinese Ministry of Commerce about the meaning and effect of Chinese competition law.

The sole question on review for the Supreme Court was whether U.S. courts must defer to a foreign government’s reasonable construction of its own laws. On June 14, 2018, the Supreme Court unanimously reversed the Second Circuit’s ruling, holding that a foreign sovereign’s interpretation of its own law is not “conclusive” for U.S. courts, and that courts need only give “respectful consideration” to foreign sovereign submissions.


Plaintiffs were purchasers of vitamin C in the United States who alleged that the defendants, Chinese vitamin manufacturers, formed an agreement to sell vitamin C in the U.S. at artificially high prices in violation of U.S. antitrust law. The defendants did not contest that they agreed to fix prices; instead, they filed a motion to dismiss on the basis that applicable Chinese regulations required them to do so.

In a historic move, the Ministry of Commerce of the People’s Republic of China filed an amicus curiae brief with the district court in support of dismissal, explaining that the defendants, as members of a chamber of commerce in China, were required to implement the Ministry’s regulations regarding the vitamin C trade, which compelled manufacturers to set prices “at or above the minimum acceptable price set by coordination through the Chamber.” 

Despite the Ministry’s intervention, the U.S. District Court for the Eastern District of New York denied the motion to dismiss and instead ordered the parties to engage in discovery on the issue of whether the defendants were indeed compelled by Chinese law to fix prices. Following discovery, the defendants once again asked the Court to dismiss the lawsuit on summary judgment, and the Court again denied the defendants’ motion, expressly “declining to defer to the Ministry’s interpretation of Chinese law” in light of certain provisions in the Chinese regulations that appeared to undermine the Ministry’s interpretation. In other words, the District Court refused to credit the Chinese government’s explanation of its own law.

The case went to trial and in March 2013, a federal jury found the Chinese vitamin manufacturers (those who had not yet settled with plaintiffs) liable for violating Sherman Act Section 1, and awarded the plaintiffs nearly US$147 million in treble damages. The Chinese manufacturers appealed.


On appeal, the Second Circuit considered whether the District Court abused its discretion by improperly asserting jurisdiction on international comity grounds. Finding in the affirmative, the Second Circuit vacated the District Court’s order denying the defendants’ motion to dismiss and returned the case to the lower court with instructions to dismiss with prejudice. 

The Second Circuit’s analysis hinged on the first factor of a multi-factor balancing test that courts use to determine whether a ‘true conflict’ exists between U.S. law and Chinese law. The first factor is the appropriate level of deference to afford the Chinese government’s submission about its own laws. The Second Circuit explained that “[i]f deference by any measure is to mean anything, it must mean that a US court not embark on a challenge to a foreign government’s official representation to the court regarding its laws or regulations, even if that representation is inconsistent with how those laws might be interpreted under the principles of our legal system.” 

Because the Chinese government submitted a “sworn evidentiary proffer regarding the construction and effect of its laws and regulations,” and such interpretation demonstrated a true conflict between U.S. and Chinese competition law, the Second Circuit held that a U.S. court is duty-bound to defer to the Chinese and abstain. The Second Circuit also held, in contrast to the District Court, that a true conflict does not require evidence of government compulsion to follow the law in question, proof that the laws in question were actually enforced, or proof that the defendants sought approval from the government for their actions. Instead, “[i]t is enough that Chinese law actually mandated such action, regardless of whether Defendants benefited from, complied with, or orchestrated the mandate.” The Court further concluded that China’s interests outweighed any U.S. antitrust enforcement interests.


In evaluating the Second Circuit’s ruling, the Supreme Court first addressed whether the Chinese Ministry’s submission should be treated as an issue of fact or an issue of law. Writing on behalf of the Court, Justice Ginsburg held that the Federal Rules of Civil Procedure require that a determination by a federal court of foreign law “‘must be treated as a ruling on a question of law,’ rather than as a finding of fact,” and thus the Court “may consider any relevant material or source…whether or not submitted by a party.” Because the Ministry’s submission was but one of many relevant sources in the record, the Court concluded that the District Court was correct in ruling that it was not bound by the submission. The Court held that federal courts should “accord respectful consideration to a foreign government’s submission, but [they are] not bound to accord conclusive effect to the foreign government’s statements.” 

While the Court did not set forth a bright-line rule, Justice Ginsburg’s opinion listed several factors that courts should consider in determining whether to defer to a foreign government’s position on its own law, including: the plain language of the foreign statute, its clarity, support for the sovereign’s characterization of its law, the foreign sovereign’s prior interpretations of the law, the transparency of the foreign legal system, and expert testimony about how the law is applied in the foreign country. Here, Justice Ginsburg held that the Second Circuit failed to consider the  inconsistencies that the District Court identified in the Ministry’s position and vacated the decision. On remand, the District Court will give “substantial but not conclusive weight” to the Ministry’s submission, and may consider other evidence, which tends to undermine the Ministry’s submission. 


The Supreme Court’s decision to grant certiorari in this case demonstrates that there was a lack of clarity for cases involving issues of international comity. While the decision still leaves some uncertainty, it is clear that foreign companies cannot outright rely on their sovereign’s interpretation of its own law to avoid liability under U.S. antitrust laws. Instead, foreign defendants must be prepared to present expert evidence on how the law in question is understood and applied. In this process, courts will be on the lookout for inconsistencies or shortcomings in the government’s position.

The decision could also have ramifications for U.S.-China relations. Because China has never previously intervened in a U.S. lawsuit, and the Supreme Court unanimously chose not to follow the Ministry’s submission, it’s unlikely that China will intervene again anytime soon. The decision also came amid already strained relations with China under the Trump administration, which had imposed sweeping tariffs on Chinese imports earlier in 2018, sparking what many have deemed a trade war with China.