by Nicole Castle

On December 2, 2011, the Seventh Circuit Court of Appeals granted plaintiffs’ petition for rehearing en banc and vacated the opinion issued by a Seventh Circuit panel in Minn-Chem, Inc. v. Agrium Inc., No. 10-1712.  The Seventh Circuit panel had issued an order on September 23, 2011, directing the district court to dismiss a class-action price-fixing complaint against global producers of potash, a mineral used primarily in agricultural fertilizer. 

The plaintiffs alleged a global price-fixing cartel among Canadian, Russian and Belarusian producers of potash, alleging that they fixed potash prices in Brazil, China and India, and the inflated prices in these overseas markets in turn influenced the price of potash sold in the United States.  The defendants moved to dismiss the complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, arguing first that the district court lacked subject-matter jurisdiction under the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. § 6a, and alternatively, that the complaint did not satisfy the pleading requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009).  The district court denied the motion to dismiss and the defendants appealed. 

On September 23, 2011, the Seventh Circuit panel reversed the district court and remanded with instruction that the district court dismiss the complaint.  The Seventh Circuit panel held that the complaint failed to satisfy either of the import-related exceptions to the FTAIA.  According to the panel, defendants’ anticompetitive conduct did not “involve” U.S. imports and did not “directly affect” the price of U.S. imports.  The panel used the “plausibility” standard of Twombly and Iqbal to determine whether plaintiffs had adequately pled that the anticompetitive conduct fell within one of the FTAIA’s exceptions.  However, the Seventh Circuit panel did not reach the question of broader sufficiency of the complaint under Twombly and Iqbal.

Plaintiffs then filed the current petition for rehearing en banc.  In their petition, plaintiffs argued that the panel’s opinion conflicted with the Seventh Circuit’s decision in In re Text Messaging Antitrust Litigation, 630 F.3d 622 (7th Cir. 2010).  Plaintiffs also argued that the panel misinterpreted the import-commerce exception in determining whether plaintiffs alleged sufficient anticompetitive conduct that “involved” U.S. import commerce.  According to plaintiffs, the panel’s decision regarding the import-commerce exception conflicted with the Third Circuit’s decision in Animal Sci. Prods., Inc. v. China Minmetals Corp., No. 10-2288, 2011 WL 3606995 (3d Cir. Aug. 17, 2011).