MOFCOM Asks Second Circuit to Reverse Judgment Against Chinese Vitamin Manufacturers

By on April 18, 2014

On April 14, 2014, China’s Ministry of Commerce (MOFCOM) filed an amicus brief asking the Second Circuit to overturn a ruling by the Eastern District of New York against Chinese vitamin manufacturers.  See Brief for Amicus Curiae Ministry of Commerce of the People’s Republic of China in Support of Defendants-Appellants, In re Vitamin C Antitrust Litigation, No. 13-4781 (2d Cir. filed Apr. 14, 2014).  The lower court rejected the defendants’ argument that the challenged conduct was required by Chinese law and refused to dismiss the case.  The case was later tried by a jury and ultimately resulted in a $157 million judgment against the defendants.

As MOFCOM recounted in its brief, the Chinese agency has been involved in the litigation since 2006, when it filed its first amicus brief in support of defendants’ motion to dismiss.  MOFCOM explained that beginning in 1997, it required the defendants to participate in a Vitamin C Subcommittee in order to obtain export licenses, which “could be revised or revoked if a licensee failed to comply with mandatory export price and quantity constraints.”  Brief at 5.  The lower court characterized MOFCOM’s involvement in the case as “a post-hoc attempt to shield defendants’ conduct from antitrust scrutiny.”  Id. at 2.  In its April 14 filing, MOFCOM fired back, calling the court’s statement “profoundly disrespectful, and wholly unfounded.”  Id.

MOFCOM’s central legal argument is that under United States v. Pink, 315 U.S. 203, 220 (1942), American courts must accept a foreign government’s official interpretation of its own law as conclusive.  The district court, however, “ignored these fundamental precepts” and “instead invented its own mode of analysis that yielded a strikingly incorrect conclusion of Chinese law.”  Brief at 14.  The case has raised thorny international relations issues, and the appeal will no doubt be closely watched by the Chinese government.  In MOFCOM’s words, “[t]he district court’s approach and result have deeply troubled the Chinese government, which has sent a diplomatic note concerning this case to the U.S. State Department.”  Id. at 13.  A reversal by the Second Circuit would “reaffirm that principles of international comity require district courts to treat official statements of a foreign government with a high degree of deference and respect, and with due caution about the court’s ability to determine accurately the law of an unfamiliar legal system.”  Id.

STAY CONNECTED

TOPICS

ARCHIVES