Forced to choose between the competing concerns of international comity and United States antitrust law in In re: Vitamin C Antitrust Litigation, a unanimous panel of the Court of Appeals for the Second Circuit decided this week in favor of the former. It held that the District Court should have abstained from asserting jurisdiction over the case on comity grounds, given that the Chinese government filed an amicus brief explaining that Defendants’ alleged anticompetitive conduct was required by Chinese law. By deferring to China’s laws that compel Defendants to “to set prices and reduce quantities of vitamin C sold abroad,” in the face of conflicting U.S. law that forbids precisely such conduct, the court set a provocative precedent for circumstances wherein U.S. antitrust law clashes with foreign laws that explicitly set “export controls” to maintain “a competitive edge” in the world market.

In this multi-district class action, Plaintiffs-Appellees are U.S. companies that purchase vitamin C. They alleged that Defendants-Appellants, a Chinese vitamin C manufacturer that sold to Plaintiffs-Appellees, violated Section 1 of the Sherman Act and Sections 4 and 16 of the Clayton Act by establishing a cartel with co-conspirators that illegally sought to fix the supply of vitamin C exported worldwide, and to inflate the price of vitamin C sold in the United States and elsewhere.

In proceedings below, the District Court denied Defendants’ motions to dismiss and for summary judgment. At trial, the jury awarded $147 million in damages and enjoined Defendants from future anticompetitive conduct.

On appeal, the Second Circuit panel vacated the judgment, reversed the order denying Defendants’ motion to dismiss, and remanded so that the District Court can dismiss the complaint with prejudice.

Underscoring China’s large share of the world vitamin C market, the panel cited in detail the amicus curiae brief filed below by China’s Ministry of Commerce in support of Defendants’ motion to dismiss. The brief explained that the China Chamber of Commerce of Medicines & Health Products Importers & Exporters, which Plaintiffs identified as the entity with which Defendants illegally colluded, was in fact a “Ministry-supervised entity authorized . . . to regulate vitamin C export prices and output levels”—not a trade association as Plaintiffs described it.

Characterizing that brief as “an historic act,” the Court of Appeals explained that no entity of the Chinese Government had ever before appeared as amicus in a U.S. court. The Court went on to consider whether the District Court should have abstained from asserting jurisdiction, applying the following factors defined in the balancing test set out in Timberlane Lumber Co. v. Bank of Am., N.T. & S.A., 549 F.2d 597 (9th Cir. 1976) and Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287 (3d Cir. 1979):

• Degree of conflict with foreign law or policy;

• Nationality of the parties, locations or principal places of business of corporations;

• Relative importance of the alleged violation of conduct here as compared with conduct abroad;

• The extent to which enforcement by either state can be expected to achieve compliance, the availability of a remedy abroad and the pendency of litigation


• Existence of intent to harm or affect American commerce and its


• Possible effect upon foreign relations if the court exercises jurisdiction and grants relief;

• If relief is granted, whether a party will be placed in the position of being forced to perform an act illegal in either country or be under conflicting requirements by both countries;

• Whether the court can make its order effective;

• Whether an order for relief would be acceptable in this country if made by the foreign nation under similar circumstances; and

• Whether a treaty with the affected nations has addressed the issue.

As to the first factor, the panel found a conflict between U.S. and Chinese law because Defendants-Appellants could not simultaneously comply with both. It held that deference to the latter “in this case is particularly important because of the unique and complex nature of the Chinese legal- and economic-regulatory system and the stark differences between the Chinese system and ours.” The court went on to consider the nine remaining factors, and determined that these also weigh against the exercise of jurisdiction in this case.

In ordering that the case be dismissed, the Court of Appeals placed a high premium on principles of international comity and assigned great weight to the Chinese Ministry’s amicus brief. Given the success of the Ministry’s intervention, it remains to be seen whether such briefs will become more routine in antitrust cases, even as the Second Circuit emphasized the “historic” nature of China’s decision to speak up in this case.