Center for Law and Economic Studies
Center for Contract and Economic Organization
Before it was uncovered and prosecuted, the international vitamin cartel, known as "Vitamins, Inc." by its perpetrators, was extraordinarily successful. Estimates of cartel profits run as high as $18 billion (in 2003 dollars). In addition to substantial criminal sanctions, cartel members paid over $2 billion to American plaintiffs. When foreign plaintiffs tried to sue the foreign defendants in American courts, however, they encountered resistance. A trial court read the Foreign Trade Antitrust Improvements Act ("FTAIA") to restrict the reach of the Sherman Act and preclude foreign purchasers from suing the foreign defendants. The D.C. Circuit reversed, holding that the facts brought the case within FTAIA's exceptions. There already being a circuit split, the Supreme Court granted certiorari. In its unanimous decision, the Court ruled that the FTAIA exception did not apply where a claim rested solely on foreign harm that was independent of any adverse domestic effect.
Victor P. Goldberg,
The Empagran Exception: Between Illinois Brick and a Hard Place,
Colum. Bus. L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/2148