Further illustrating the increased difficulty in pleading potentially burdensome civil claims after Twombly and Iqbal, the Seventh Circuit reversed on interlocutory appeal a plaintiff’s claim that a conspiracy to fix potash prices outside the United States violated federal antitrust law because it influenced the price of potash sold inside the United States. Minn-Chem, Inc. v. Agrium Inc., slip op., No. 10-1712 (Sept. 23, 2011). At issue was whether the claim was barred by the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. §6a, which in general bars the application of U.S. antitrust laws to agreements affecting only foreign commerce, but exempts from the bar foreign anticompetitive conduct that either affects U.S. import commerce or “has a direct, substantial, and reasonably foreseeable effect” on U.S. domestic or import commerce.
The plaintiffs alleged that defendants conspired to fix potash prices abroad, adversely affecting domestic potash prices, and that defendants were engaged in importing potash into the U.S. But there were no specific facts pleaded that would support a plausible inference that the defendants entered into price or output agreements for sales in the U.S. And none of plaintiffs’ allegations of foreign-cartel conduct described conduct aimed at the U.S. import market. Absent allegations of anticompetitive conduct that actually targets the U.S. import market, the court reasoned, a plaintiff alleging foreign anticompetitive conduct must allege facts that, if proved, demonstrate a direct, substantial, and reasonably foreseeable effect on U.S. domestic or import commerce. Allegations that defendants collusively set sale prices in other countries, thus providing a benchmark for prices in the U.S., would not suffice, for they lacked a description of how this benchmarking in fact occurred and affected U.S. prices.
Minn-Chem also suggests that the holding in United Phosphorus, Ltd. v. Angus Chemical Co., 322 F.3d 942 (7th Cir. 2003) — namely, that FTAIA’s limitations are jurisdictional instead of elements of a Sherman Act claim — “may be ripe for reconsideration” in light of the approach the Supreme Court took in Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869 (2010) (§10-b of the Securities Exchange Act), and Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (Title VII). Yet the court left that issue for another day, because the defendants were entitled to dismissal either on jurisdictional grounds or on the ground that the plaintiff failed to state a claim.